Analyzing Market Expansion of Gluten Free Food Co. in China: Report

This report provides a detailed analysis of the market expansion opportunities for The Gluten Free Food Co., a gluten-free food product company, in China. It begins with an executive summary and company background, highlighting the company's focus on health standards and its established presence in the Australian market. The report then delves into the background of the gluten-free food market, discussing the increasing demand driven by health concerns and gluten-related disorders. An organizational analysis outlines the company's strengths, such as its online presence and focus on quality, and weaknesses, including a limited product range. The target market segment profile focuses on China's industrializing economy and rising literacy and wage rates. A micro-environmental factor analysis and PESTEL analysis (Political, Economic, Social, Technological, Environmental, Legal) examine the various influences on market entry. The report identifies opportunities and threats, analyzes competitors, and concludes with recommendations for a successful market entry, including a proposed marketing mix (product, place, price, packing, and promotion) tailored to the Chinese market. The analysis underscores the potential for the company to thrive in the Chinese market, given its size and the growing demand for gluten-free products.

Running head: MARKET EXPANSION
Marketing in an International Event
Name of the Student
Student Number
Name of the Course
Name of the University
Author Note

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Executive Summary:
The paper discusses the scope of the business expansion of a company, named as The Gluten
Free Food co. which generally deals with the gluten free products, in China. The paper
analyses the market with various analysing tools in order to accumulate the possibility of the
organization to conduct a fruitful business in the new country. The cultural and societal
differences between the base country of the organization and the destination country is also
analysed so that the effect of these factors in buying the products gets properly
acknowledged. The paper also recommends some suitable strategies for the given
organization in smooth conduction of their business in the new market.

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Table of Contents
Introduction:...............................................................................................................................4
Company Background:...............................................................................................................4
Background:...............................................................................................................................5
Target Market Segment Profile..................................................................................................6
Institutional:...........................................................................................................................6
Micro-environmental factor analysis.....................................................................................6
PESTEL Analysis:.................................................................................................................7
Political..............................................................................................................................7
Economic:..........................................................................................................................7
Social:.................................................................................................................................7
Technological:....................................................................................................................9
Environmental:...................................................................................................................9
Legal:..................................................................................................................................9
Opportunities:...........................................................................................................................10
Threats:.....................................................................................................................................10
Competitors:.............................................................................................................................10
Conclusion:..............................................................................................................................11
Recommendation:....................................................................................................................11
Marketing Mix:....................................................................................................................11
Product:............................................................................................................................11
Place:................................................................................................................................12

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Price:................................................................................................................................12
Packing:............................................................................................................................12
Promotion:........................................................................................................................12
References:...............................................................................................................................14

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Introduction:
The food trend all over the world is subjected to a rapid change in regard of the health
concerns. People of this generation are significantly conscious about taking their food and
with their choices of the food, it is evident that they want limited but sufficient amount of the
food (Pilcher 2017). The concern about their health in their immense busy life is forcing them
to compromise and to be significantly choosy regarding their food selection (Liu, Pieniak and
Verbeke 2013). This gives them the assurance about their healthy living and eradicates their
concern of food related issues along with improving the gastrointestinal system (Ghalichi et
al. 2016). These significant benefits are focus of the entire world as the people would get
significantly benefitted from the gluten free foods and the current trend of the people in the
consumption of the foods is largely following the benefits. The benefits are visible for the
large population of China as well as there are significant number of people suffering from the
gluten disorders. The wide range of benefits coming out of it provides enough space for The
Gluten Free Food Co. to enter the Chinese market with a possible assurance of profitable
business looking at the size and impact of it in the Asia Pacific market. The purpose of the
paper is to analyse the scope of the organization to enter into the Chinese market.
Company Background:
The organization is an established body in the Australian market of gluten free
products and manages their business keeping a keen focus on the health standards of their
customers. The organization had a massive share in the total market share of 26% in the
Australian gluten free food industry (Australia.gov.au, 2018). The prime focus of the
organization is to serve products which will not result in gluten related disorders and will be
able to protect the customers from the adverse impact of Celiac disease. The key advantage of
the organization was that the organization had Monica Topliss in their top level management

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as one of the prime decision maker for the recipes and menu of the organization (Gluten Free
Food Co, 2018). A person who herself experienced the adverse condition of Celiac disease,
was absolutely impeccable in deciding the ingredients for the food products of the
organization.
Background:
The gluten free food products are much needed choice for a broader section of the
world as considerable number of people are facing diseases like celiac disease, gluten ataxia,
wheat allergy, non-celiac gluten sensitivity and dermatitis herpetiformis (Lamacchia et al.
2014). These are all gluten related disorders which affecting the health of the people in a
significant manner. People are not only taking it for celiac diseases as the gluten free diet has
a much widespread list of benefits connected with it. The gluten free diet is instrumental in
providing an alternative treatment for the people with autism (Buie 2013). Hence with the
influential impact on the people, gluten free products are the necessity of some markets like
China.
Organizational analysis:
Strength:
The organization largely deals in online mode via their website which is significantly
advantageous for the organization to enter a tech-savvy nation like China (Brierley et al.
2014). The website provides the customers with the much needed ease in finding their
choices without any sort of issue. The good quality food products with precise focus on the
health standards of the customers makes the organization one of the most trustworthy and
preferred destination for the gluten free food products. Another factor which can be
considered as the strength of the organization is that the excellence of Monica Topliss in

6MARKET EXPANSION
managing the new products quickly but having said that the organization still is unable to
produce significant number of different products in the market.
Weakness:
As the Chinese gluten free food market is significantly congested with large number
of market dominators, the organization will find it difficult at the initial stages and the lack of
their qualified workforce can be a critical issue in this case well. The lack of the innumerable
number of gluten free food products available in the organization’s menu is a major concern
for the organization in developing their business in china as well (Gluten Free Food Co,
2018). The general capacity of the organization regarding the number of their employees is a
significant barrier for the organization in producing large number of food products as the
scope of producing according to the significant demand of the Chinese market with the
existing employee strength is considerably limited.
Target Market Segment Profile:
Institutional:
The organization is approaching a business expansion in the new market in form of
China. China as a country incorporated the industrialisation in a significant manner. The
country is termed as industrialising giant in the world and falls in the section of upper-middle
regarding the income (Wong 2013). The country is significantly approaching towards a rapid
rise in the literacy and the wage rates and that makes an important justification for
considering the Chinese market as a booming industry for the gluten free food products.
Micro-environmental factor analysis:

7MARKET EXPANSION
The increment in the literacy rates is a notable proof in considering that the people of
the country will be aware of the negatives of the gluten related diseases. The country has
large number of people suffering from these gluten disorders (Yuan et al. 2013). The
increment of the wage rates makes sure their concrete connection with their professions and
being a responsible professional, the individuals cannot afford to compromise with their diets
in order to stay fit and fine.
PESTEL Analysis:
Political:
The Chinese market is strongly influenced by their political views as the trade in that
market is strongly dependent on the political assumptions (Wong 2013). The people of china
is significantly tech-savvy and busy in their daily operation. The political influences from the
leaders of the society is immense in making sure that the people consume healthy products
and services. The reason behind the monitoring of the food qualities from the political sectors
of the country is controversial to state, however the attempt of capturing the preference of the
people in the country from different political houses can be considered as the reason of
concrete observation of the food standards. The political influence in the region plays a
pivotal role in making sure that the market offers sufficient amount of gluten free food
products (Wong 2013).
Economic:
The Chinese market is one of the biggest food market in the Asia Pacific region. The
market is full of various competitors as well. In 2016, the Chinese market was recognized
with the tag of the largest market for gluten free foods and beverages in the Asia-Pacific
region with an estimated share of 35% (English.mofcom.gov.cn, 2018). This provides the
assurance to the concerned organization of getting a profitable business in the new market.

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The CAGR report forecasted the rapid rise of China as one of the fastest growing gluten free
food market with a growth rate above 14% during the 2018-2023. This makes sure that the
new organization will not only be able to conduct fruitful business in the new market at
present but also contains the future scope of increasing the business as well.
Social:
The societal preference of the Chinese community is highly influential on the well-
being of the people. The cultural differences between the base country and China is
instrumental in terms of the business expansion of the chosen organization. The Chinese
country largely believes on the superior subordinate policy which does not have much impact
in Australia and in that case the organization needs to calibrate their visions and policy in the
suitable manner (Hofstede Insights, 2018). Unlike the Australian society, the Chinese country
largely focuses on the collectivist approach and the recruitment and promotional policies gets
highly influenced by this approach (Triandis 2018). The concerned organization need to
make sure that the policies regarding those sectors align well with the Chinese culture. The
Chinese society believes in the ultimate gain and they focuses on gaining the maximum at
every instant to be the best every time (Hofstede Insights, 2018). The Chinese Society
believes in the perfect method of adapting the adverse situations at every time to follow the
long term orientation policy and the organization will get benefit out of it in their survival in
the market along with creating the brand for their company. The prescribed diet information
in the amendments of the World Health Organization are significantly changing the
perspective of Chinese people in buying the gluten free products.

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(Chart
Courtesy: https://www.hofstede-insights.com/)
Technological:
With the strong rise in technological advancement, the country and the people of it is
highly technology oriented. China is a market leader of the technological applications and
gadgets which makes the country well aware of different technological aspects in promoting
a particular product in the market (Viitanen and Kingston 2014). The organization will get
sufficient amount scope of promoting its products in the new market by different mobile
applications and will be able to do the same in various social media platforms as well. This
will give the organization an added advantage in the competitive new market to provide some
limelight towards their own product. The maximum efforts of the organization to reach the
Chinese people must follow the path of the technology as the maximum amount of chance of
getting their attention will be subjected to that path only due to their friendliness with the
technology (Leeflang et al. 2014). The introduction of the technology into the production of
the gluten free food products in the organization will be largely appreciated by the new
market.
Power Distance Individualism Masculinity Uncertainty
Avoidance Long Term
Orientation Indulgence
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Value Dimensions
Australia China

10MARKET EXPANSION
Environmental:
The gluten is a mixture of proteins that is usually found in the wheat, barley, rye and
oat (do Nascimento et al. 2013). The processing of the gluten free products will generally
decrease the environmental balance as the product list of it relates to the fish, meat, eggs and
seafood and many more. The organization must consider the scope of reduction of any sort of
pollution resulting from the daily conduct of their business in order to provide the people of
the country the required amount of breathing space in experiencing a green environment.
Legal:
The legal support from the government organizations in china in establishing a gluten
free food list and sufficient number of organizations serving the need of the people regarding
the gluten free food products is highly appreciable. The increased amount of business from
the country in the global gluten free food industry is boosting statistics factor for the plan of
the expansion of the organization. Along with these, the increment in the population of the
country will serve the major current disadvantage of the organization which was the lack of
apt employees in the organization (Gov.cn, 2018).
Opportunities:
The general concern of the gluten products among the people of China is a major
scope for the organization in expanding their business in the new country. The increment in
the product chain by the organization keeping a focus on the gluten free food products will
enable the organization with the much needed scope of expanding their business by
countering the concern of limited amount of available gluten free food products in the
Chinese market and will enable the organization to eradicate their weakness as well (Lam et
al. 2013).

11MARKET EXPANSION
Threats:
As the Chinese market is highly competitive and the effect of it in the Asia pacific
region is significant, the industry will be approaching large number of market competitors
and the concerned organization will feel high competition due to that. The organizations like
General Mills, Heinz or Gruma are significantly dominating the world market and being one
of the significantly influential market for the Asia-Pacific region, the Chinese market is
feeling the competition of the mentioned organizations as well. As the mentioned
organizations are having worldwide reputation, the organizations are able to establish a
significant brand awareness among the people of China. The absence of significant brand
awareness is also a major reason of concern for the concerned organization in the new
market.
Competitors:
The Asia Pacific region including the Chinese market is significantly congested with
high number of market players but the significant ones are Heinz Company and General Mills
Inc. Heinz entered the market by the partnership with the Sanquan Food. The general food
products like soup, soy products or the food products from potato, rice or beans and corn are
highly appreciated by the customers and the excellence of the organizations in producing
them is major reason behind their customer retention (do Nascimento et al. 2013). The
growth of sales of General mills increased from 12% in 2014 to 18% in 2017 in Chinese
market and sharp increase in the sales of Sanquan Food is observed after the entry of Heinz
which is a significant concern to the organization in the new market (Generalmills.co.in,
2018).