International Marketing Management: Woolworths in the Chinese Market

This report analyzes Woolworths' potential expansion into the Chinese market, focusing on international marketing management. It begins with an abstract outlining the paper's objective: to assess Woolworths' marketing strategy for entering China. The report addresses various crucial aspects, including challenges faced by companies in international business, a PEST analysis of China's political, economic, social, and technological environments, and the impact of government intervention and economic integration on the retail sector. It also examines strategy-related reasons for expansion, entry strategy choices (with a focus on Foreign Direct Investment), and the marketing mix (product, price, promotion, and place) tailored for the Chinese market. The report concludes with recommendations for Woolworths' successful entry into China, emphasizing e-commerce strategies, technological advancements, and cultural sensitivity. This comprehensive analysis provides a detailed overview of the factors influencing Woolworths' potential success in the competitive Chinese retail landscape.

Running head: INTERNATIONAL MARKETING MANAGEMENT
International Marketing Management
Name of the Student
Name of the University
Author Note

1INTERNATIONAL MARKETING MANAGEMENT
Abstract
The purpose of the following paper is to discover the marketing strategy analysis of Woolworths
if they expand into China. The importance of the foreign market entry is very important for the
expansion of their business. Woolworths will look to enter the Chinese market. The different
components for entering the Chinese market have been discussed. The different approaches have
been used here like the external environment of China. The religious and cultural issues have
been discussed as well. The market entry strategies are analyzed and the effects of economic
integration and its influence have been described in this paper. The marketing mix of the
company for Woolworths has been highlighted.

2INTERNATIONAL MARKETING MANAGEMENT
Table of Contents
Introduction......................................................................................................................................3
Challenges for the companies in doing business in another country...............................................3
PEST analysis..................................................................................................................................4
Government intervention in the economy in retail industry............................................................5
Economic integration and its influence on retail industry...............................................................6
Strategy related reasons for expanding to specific country.............................................................6
Choice of entry strategy...................................................................................................................7
Marketing mix.................................................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

3INTERNATIONAL MARKETING MANAGEMENT
Introduction
The following report will focus on the various factors like the international expansion of
the Australian companies. The chosen company for this organization will be Woolworths
(Woolworths.com.au 2018) In this report, the most important things will be discussed for the
international expansion of the company. The basic ideas for expanding the business into another
country will be discussed in this section. The report will be presented by assuming the company
will be expanding their business into the Asian market through China. This will be a huge boost
for the company to expand into China because of the endless possibilities for capturing the Asian
market. The various issues will be discussed here like the external environment of China, the
foreign market entry strategy, the intervention of the Government into the economic
perspectives, the marketing mix of the company and many other things. These things should be
assessed and analyzed properly for gaining an idea about the ways they could diversify their
products according to the needs of the Chinese people.
Challenges for the companies in doing business in another country
The companies in Australia face several difficulties in expanding into the new countries,
especially in Asian ones. It is because of the cross cultural differences and the differences in the
mindsets of the people. The managers eye for global extension but generally they fail in their
objectives if they do not analyze the external environment of the country they will be looking to
expand into (Woolworths.com.au 2018). The organization Woolworths has a very strong brand
reputation and they will need to overcome the challenges in front of them. The different issues
like the incapability of running the marketing campaigns in the target markets will be very
important for the organization to focus on. The human resource plans are very important for the

4INTERNATIONAL MARKETING MANAGEMENT
organization as well. The employees in China differ on the background of the mindset for they
believe in the collectivism rather than individualism (Triandis 2018).
PEST analysis
Political
As a part of the external environment, it is very important for the organization to review
the external environment of China. China is a socialist communist country run by the believers of
Marxism. The firms that expand into China must abide by all the formal and informal rules of the
country. All these rules shed a great impact on the country. However, the government has been
able to focus on encouraging the e-commerce procedures (Turban et al. 2017). The individual
properties and taxation processes are very strict in China. Woolworths might have to focus on the
e-commerce strategies more. It is because the organization has to set a proper target audience.
They have to make an influence over the vast population of China indeed (Johnson 2016).
Economic
It has been seen that China has been able to increase their GDP over the past few years.
This is why it will be highly beneficial for Woolworths to expand into the country for monetary
benefits (Gupta 2013). The socio-economic class of China is quite stable for the strategies by the
communist party of China. The labor force in China is very much abundant in number. The labor
cost in the country is very low so it will be important for Woolworths. The inflation rate is very
high in this country and the prices of the property are also very high indeed.
Social

5INTERNATIONAL MARKETING MANAGEMENT
Two of the most important social factors are religion and racism. It has been observed
that the people from the Asian countries are often diminished by the racial abuses. The religious
factors will also be important for the organization (Gupta 2013) China is a communist country
and they generally do not believe in God. This is why the atheism pervades in this country. There
might be clashes between the race and ethnicity between the higher management and the
employees. Woolworths has to resolve these issues. As per the value dimensions by Hofstede,
China is considered to be a country following the collectivist nature. The population growth can
be taken as a beneficial factor for China as it will be easier for Woolworths to recruit more
people. The emigration factor can also be a vital issue in this matter (Ho 2014)
Technological
Woolworths have to look to innovate new products through the use of technology in a
better way (Li and Xie 2012). As China is focusing on strengthening the e-commerce strategy,
this will be very important for the organization as well (Gupta 2013) Asian countries like China
and Japan have developed a lot in the technological aspects. This is why Woolworths will
implement the new technologies for the product development in China. They can also use the
social media platforms for the marketing of their new products (Ho 2014).
Government intervention in the economy in retail industry
Woolworths operates in the retail industry. This is why the intervention of the Chinese
government should be analyzed properly in the retail industry. The government plays a very
major role in redirecting in the economy of the country. The Chinese government has been very
progressive about the development of the retail industry. They will be look to support the attempt
of Woolworths to expand into their market and get the profits. They might leverage the taxes on

6INTERNATIONAL MARKETING MANAGEMENT
Woolworths as well. The Chinese government will like to focus on the inventory management
that will help Woolworths to engage more people in their organization. The operations in the
retail industry are generally led by the human force (Duncan and Martínez-García 2015). This is
why the government will intervene in the economy to make it stronger. If the Government of
China puts the stress more on developing the e-commerce strategy and invest in it, this will
surely be helpful for Woolworths to get the proper benefits. The logistics operations can also be
improved if the government is very much interested in improving the supply chain and logistics
management within the country (Duncan and Martínez-García 2015).
Economic integration and its influence on retail industry
The retail sector is considered to be one of the most powerful industries with a very
common ground. The global recession might be a very important factor in the economic
integration for the retail sector (Armstrong et al. 2015). The ill effects of global financial crisis
have also impacted on the operations in the retail industry. The sales in the global retail sector
have faced major growth in the last few years. The costs have risen over the few years for
production. This is why Woolworths must have to increase the price of their products in China
reflecting on the socio-economic condition of the country. However, they have to keep the price
of some products down for the lower earning customers. They might use the price skimming
strategy to gain the hold of their target market. This will be very crucial for their competitive
advantage.
Strategy related reasons for expanding to specific country
Woolworths will be focusing on several things for setting the strategies. They will look to
get the competitive advantage over their competitors. The retail industry in China is already very

7INTERNATIONAL MARKETING MANAGEMENT
competitive. This is why they will look to appoint some strategies by which they will be able to
capture the markets. Woolworths must set a proper target market based on the preference of the
consumers. The demand of the Chinese consumers is huge. This is why they must segment their
target markets according to the age of the customers (Armstrong et al. 2015). They must
innovate new products for the health of the children. They can also prepare some gluten free
products that will be very important for the health of people of all ages (Frankenberger, Badke-
Schaub, and Birkhofer 2012) They can also provide the products like Woolworths Select and
Woolworths Gold milk powder, Devondale milk powder and Swisse vitamins. The market
penetration strategy should be followed by Woolworths so they can get the grab on the Chinese
market. They must sell the environment friendly products. They can select the social media
marketing strategy to raise the awareness among the customers about the importance of their
products (Camisón and Villar-López 2014).
Choice of entry strategy
The most important market entry strategy for Woolworths to entry to China is Foreign
direct investment policy (Alfaro and Johnson 2012). They must be able to explore the
possibilities of the new markets. They should also be able increase the rate of profits. It is a fact
that Woolworths has to focus more on the international operations. This is why they will need to
apply the High Control strategy for the operations in India. The strong rivals of Woolworths in
the retail sector are Walmart and tesco who are very strongly present in the Asian market as well.
This is why they can use the foreign direct investment strategy to enter the Chinese market
(Frankenberger, Badke-Schaub, and Birkhofer 2012).

8INTERNATIONAL MARKETING MANAGEMENT
Marketing mix
Product
Woolworths is a very strong brand in the world retail market. They must develop the
quality of products and services in China. They can start to sell various types of items like
DVDs, magazines and stationary items (Gordon 2012). This will attract the interest of the
customers in a better way. They should maintain the quality of the products thoroughly as well.
Price
Woolworths is interested in maintain higher prices than the ordinary rates in the market.
They offer several brands in the food chain and set the prices according to the quality of their
products only. They are very flexible in setting their prices because they serve the customers
ranging from high income people to the low income people as well. They can also offer the
Chinese customers with several reward coupons by which they can earn more points (Armstrong
et al. 2015).
Promotion
Woolworths should use several innovative strategies in order to promote the products
properly. They can offere many Loyalty Schemes for their Chinese consumers. They can use the
social online media as well. The extensive promotion through the social media will help
Woolworths to reach the Chinese consumers as well (Gordon 2012)
Place
Woolworths might set up their stores all over the most populous cities in china. They can
open more than one retail stores in Beijing. They can opt for operating through the mobile media

9INTERNATIONAL MARKETING MANAGEMENT
platforms as well (Gordon 2012). Thus both their physical and retail online stores will help
Woolworths to set up their business in a better way in China.
Recommendations
Woolworths will look to try some ways by which they can enter the Chinese market
properly.
 They must use the e-commerce strategies to get a hold in the Chinese market.
 They should focus on improvement of the technological factors so they can cater to the
needs of the customer in the best ways.
 The managers should take into consideration the cultural differences between the Chinese
and Australian employees. They should give their employees training of how to behave
properly in the workplace.
 The products of Woolworths should be localized and launched in the market after doing
important market research within China.
 The feedback from the Chinese customers should be sought through the social media
platforms and their websites.
 Woolworths should focus on bringing the herbal products in the market as the Chinese
customers like that.
 Woolworths should also look for the local partners who will supply them with the raw
materials.
Conclusion
This paper can be concluded by saying that Woolworths has been looking forward to
expand to china for financial and marketing. They will look to capture the Asian market through

10INTERNATIONAL MARKETING MANAGEMENT
China. They will also look to expand into India after their venture into China. The Asian market
is very much profitable and they will be able to increase their profits in this way. The marketing
mix is a very critical factor for their future success. They must use the foreign direct investment
policy for entering into the Chinese market and gain the market share extensively.

11INTERNATIONAL MARKETING MANAGEMENT
References
Alfaro, L. and Johnson, M.S., 2012. Foreign direct investment and growth. In The evidence and
impact of financial globalization (pp. 299-309).
Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction.
Pearson Education.
Camisón, C. and Villar-López, A., 2014. Organizational innovation as an enabler of
technological innovation capabilities and firm performance. Journal of business research, 67(1),
pp.2891-2902.
Duncan, R. and Martínez-García, E., 2015. Forecasting local inflation with global inflation:
when economic theory meets the facts.
Frankenberger, E., Badke-Schaub, P. and Birkhofer, H. eds., 2012. Designers: the key to
successful product development. Springer Science & Business Media..
Gordon, R., 2012. Re-thinking and re-tooling the social marketing mix. Australasian Marketing
Journal (AMJ), 20(2), pp.122-126.
Gupta, A., 2013. Environmental and pest analysis: An approach to external business
environment. Merit Research Journal of Art, Social Science and Humanities, 1(2), pp.13-17.
Ho, J.K.K., 2014. Formulation of a systemic PEST analysis for strategic analysis. European
academic research, 2(5), pp.6478-6492.
Johnson, G., 2016. Exploring strategy: text and cases. Pearson Education.