International Marketing Plan for Australian Dairy Product (China)

This report outlines an international marketing plan for the Australian dairy product "Icelandic Yoghurt" aiming to enter the Chinese market. The plan begins with an executive summary highlighting opportunities like high GDP and population, and challenges such as cultural differences and government regulations. It includes a situational analysis using PESTEL and SWOT frameworks to assess the business environment, market dynamics, and competitive landscape. The marketing plan details entry modes (direct and indirect exporting, followed by franchisee and joint ventures), STP (segmentation, targeting youth, and positioning as a healthy product), and the 4Ps (product, promotion, price, and place). The analysis considers competitors like Yili and Mengniu, and recommends differentiation strategies. The report concludes with recommendations on entry strategies to successfully launch the product in China, along with references to support the research and findings.

International marketing plan for Australian Dairy product
Name
(Affiliation Institutions)

Executive summary
The aim of the paper was to develop an international market plan of Australian dairy
product known as “Icelandic Yoghurt” that is intended to venture in to China market. Icelandic
yoghurt is a fermented dairy product that is obtained from milk fermentation by two bacteria
cultures. The key opportunities that existed in china included the high Gross domestic product
(GDP), high population leading to high product consumptions, and high economic growth. The
key challenges included high context cultures, government policies and regulatory framework.
Yogurtland Company has a high number of direct and indirect competitors across China. The
main competitors included Yili group with a market share of 27%, Mengniu (21%), Bright diary
(15), Tianrun (3%). To survive in the market, Yoghurt Land company uses differentiation
products. Yili Group, Mengniu and bright diary being the market leaders use cost-leadership
competitive strategy to sustain the competing environment. The entry mode appropriate by the
nature of Icelandic yoghurt to succeed in the market include direct and indirect exporting. Upon
the establishment of the brand into the Chinese market, the company will use franchisee and a
joint venture to expand. The Icelandic yoghurt market segmentation was based on the benefits of
the product to diverse consumers and the rate of consumption. The main target of business was
youths between 2-35 years as they have a higher consumption of the yogurt products in China as
compared to others. The product was positioned as a fat-free or low-fat product with high
calcium and mixed up with nuts and fruits in order to regulate body weight, strengthening bones
and at the same time increasing the fat bun metabolism. Distribution channels of the product
were the use of agents and wholesalers. The pricing strategy was promotional and psychological.
The paper concluded that the use of entry models and strategies will easily process of launching
the product.

Table of Contents
1.0 Introduction...........................................................................................................................................4
2.0 Country/ product brief...........................................................................................................................5
2.1 Situational analysis............................................................................................................................5
2.2.1 Business environment.................................................................................................................5
2.2.2 Pestle analysis.............................................................................................................................5
2.2.3 Market analysis...........................................................................................................................7
2.2.4 Competitive analysis...................................................................................................................7
2.2.5 Organizational analysis...............................................................................................................8
2.2.6 SWOT Analysis..........................................................................................................................8
3.0 Marketing plan......................................................................................................................................8
3.1 Mode of Entry....................................................................................................................................8
3.2 Segmentation, Targeting and Positioning (STP)..............................................................................10
3.2.1 Segmentation............................................................................................................................10
3.2.2 Targeting...................................................................................................................................10
3.2.3 Positioning................................................................................................................................10
3.3 Marketing Mix (4ps)........................................................................................................................11
3.3.1 Product......................................................................................................................................11
3.3.2 Promotion.................................................................................................................................11
3.3.3 Price..........................................................................................................................................12
3.3.4 Place.........................................................................................................................................12
4.0 Conclusion...........................................................................................................................................13
5.0 References...........................................................................................................................................13

1.0 Introduction
A marketing plan is a business document that is used by a company or an organization to
outline its marketing tactics and strategy. A marketing plan usually focuses on a particular period
of time (approximately) over one year and covers diverse details related to marketing such as
action steps, goals and costs (Kusumaningrum, I., & Hidayat, 2016). A market plan is a very
helpful tool in a business perspective as it helps an organization to differentiate its products,
control business through a budget, resource allocation and managing efforts. Therefore, the paper
seeks to develop an international marketing plan for an Australian dairy product known as
“Icelandic Yoghurt” that is intended to venture in to China market. The name of businesses
which manufactures yoghurt is called Yoghurtland and it is suited at Melbourne, Australia.
Through the development of international marketing, the Yoghurt homeland company will be
able to assess China’s environment of doing business and provide a recommendation on which
marketing strategy is appropriate for the Icelandic product to venture successfully into China.
2.0 Country/ product brief
Icelandic Yoghurt is an Australian daily product that will be marketed in the Republic of
China. Generally, Icelandic yoghurt is a fermented dairy product that is obtained from milk
fermentation by two bacteria cultures. Icelandic Yogurt differs from gelato and ice cream in
health benefits, texture and taste. Furthermore, the Icelandic Yogurt has different flavours such
as blueberry, raspberry, pomegranate, peach, mango, chocolate, vanilla, strawberry and original
tart.
Image of the Icelandic Yoghurt product

The main aim of marketing the product in China is to increase the sales, create awareness
of the product, open opportunities for expansion and generate more income for the company.
Currently, the product has done well in Australia and therefore through effective businesses
strategies, the product is also expected to do well in China. However, with consideration of
opportunities and challenges that exist in China, it is clear that if the product is marketed and
implemented in the country, it can reach the SMART objectives.
2.1 Situational analysis
2.2.1 Business environment
Currently, China has an attractive market for marketing and promoting Icelandic
Yoghurt. Some of the key opportunities that exist in China and which will make the product to
successfully venture in the country include the high Gross domestic product (GDP), high
population leading to high product consumptions, and high economic growth. The key
challenges for developing the product in China include high context cultures, government

policies and regulatory framework. PESTEL model is used to provide an analysis of External
opportunities and challenges that the product is likely to encounter in China. PESTEL model is
abbreviated from Political, economic, social-cultural, environmental, legal and ecological factors
of the external environment.
2.2.2 Pestle analysis
Political factors Economic factors
Opportunities
-political stability in China is creating an opportunity
for Icelandic product to successfully venture in the
country.
Challenges
-high taxation of foreign products being deployed by
the government in an effort to promote internal
products.
Opportunities
-high GDP rates encouraging high consumption of the
Icelandic product. Currently, China has a GDP of 11.3%
which is rapid growth as compared to 2009 when it was
8.0% (Fan, Ma & Wang, 2019). There is also a trend that
the GDP is expected to increase in future and it might
surpass that of the USA.
-labour rates are extremely low with the country having
abundant skilled and unskilled labour.
Challenges
-increased interest rates
-The trend that the country is likely to experience high
inflation rates and high property rates. Furthermore, the
people Bank of China has increased interest rates and there
is trend that central bank is negotiating with banks to lend
less in a governmental strategy of limiting home purchases
(Liu, 2019).

Social-cultural factors Technological factors
Opportunities
-high growth rate. Currently, China has a population of
4.3 billion creating an opportunity for the milk product
to be marketed to the country (Sun, Zou, & Liu, 2013).
Challenges
-high collectivism, uncertainty and long oriented
cultural levels according to Hofstede.
-growth of health concerns such as obesity leading to
dietary restrictions.
Opportunities
- High distribution materials such as internet
- Growth of the internet in the country (high number
of internet users)
Challenges
-China does not offer safe and online payments
system. Furthermore, according to research
conducted by Yao, Di, Zheng, & Xu (2018), the
most used online payment method around the world
has low usage in China
- Lack of safe, online credit card system.
Environmental factors Legal factors
Opportunities
-sustainable environment for doing business as a result
of China’s government efforts of reducing pollution.
Currently, China has closed down thousands of
factories which were not compliant with recent
environmental policies (Mah & Wang, 2019).
Challenges
- Floods
Opportunities
-safe standards of doing business in regard to preparation,
storage and transportation
Challenges
-long procedures of getting a permit to do the business in
the country.

2.2.3 Market analysis
Yogurtland Company launches its Icelandic yogurt brand in receptive and steady growing
market segments. Through launching of Icelandic product to China’s market, the company will
able to maximize the potential for the success as a result of high number of special local events
across China’s major cities, year-round tourism activities, highly affluent local populations,
prime site location, ever changing-upscale student population and low media costs which makes
promotional and advertisement easier. Furthermore, there is a readily available market in china
which supports the product to successful easily.
2.2.4 Competitive analysis
Yogurtland Company will have a high number of direct and indirect competitors across
China. The high collectivism culture of China makes the market more competitive as Chinese
have a tendency to repetitive purchases on the already established products. The main key
competitors of Yourtland Company in china include Yili group with market share of 27%,
Mengniu (21%), Bright diary (15), Tianrun (3%), Junlebao (1%), Sanyuan (1%), Wei-Chuan
(1%) and other small companies having a market share of 29% (China AG, 2018)
The competitors of China yoghurt market
(image source China AG, 2018)

The substitutes products that exist in China market include nestle, Danone, chocolate and
other types of beverages in China. Yili Group, Mengniu and bright diary being the China’s
leaders of the yoghurt industry in terms of market share in all the group segments, the company
uses cost-leadership competitive strategy to sustain the competing environment. Through cost-
leadership competitive strategy, the companies survive in the competitive market by keeping the
cost as low as possible in order to have a large market share with average prices (Kharub, Mor &
Sharma, 2018). To launch the Icelandic product successfully into the china market, Yoghurtland
Company will use differentiation focus competition strategy. The strategy will involve
introducing Icelandic yoghurt which is a unique product with added features like flavours and
further lowering the costs significantly to capture large segments of markets including people
under low and middle income.
2.2.5 Organizational analysis
Currently, Icelandic yoghurt operates in a flooded yoghurt industry of Australia. The
industry is intense in terms of competition. However, the established brand of the company gives
it a competitive advantage over its competitors. In addition, with an established profile, good
reputation and after-sale services, the company has been able to survive the competitive edge.
2.2.6 SWOT Analysis
Strengths
-The established brand name.
- Wide range of frozen yogurt flavours which meets the
demands of wide customer range.
Weakness
- Weak presence in terms of the health segment
- High price as compared to distribution brands.

-offering consultancies services
Opportunities Threats
-Growth of internet facilitating effective marketing on
social media platforms such as We chat.
-the high consumption rate of yogurt in the market.
-growth of technology facilitating the growth of the online
payment system.
-high of competition from similar companies leading to
low profits
-change of consumer patterns as a result of increased
health concerns
-new strategies from competitors
3.0 Marketing plan
3.1 Mode of Entry
Yogurtland Company will penetrate into Chinese market using various market entry
strategies. The most appropriated market entry strategy will include indirect exporting, joint
venture and direct exporting. Furthermore, upon the product gaining a strong customer base, the
company will expand its operations to various regions across China through franchisee strategy.
Direct exporting refers to a method by which companies ship their products, services or transfer
technologies from one nation to another till it reaches end customers (Cieślik & Michałek, 2018).
Exporting the Icelandic product to China will include Yoghurtland Company engaging a
company which operates in the country and that has a license for exporting or importing in
accordance with Chinese laws. The use of the strategy will be economically beneficial to the
company as it cut high costs which are associated with agents and intermediaries in China. In
addition, the company will also be able to have a great degree over all aspects of the transactions,
there will be direct feedback of the product, the product will be shipped fast and the copyright
patterns and trademark of yoghurtland Company will be protected.

Alternately, the company will penetrate the china market using indirect exporting that
involves the use of Agents. In a marketing context, an agent is a company’s representative being
paid a commission or a monthly fee to assist an organization to sell products (Sinkovics, Kurt &
Sinkovics (2018). The agents will work closely to Yoghurt Company whereas distributors with
work closely with customers to ensure timely deliveries of the product. With localized agents
possessing knowledge, experience and contacts to promote foreign products, they will be able to
overcome social barriers such as long term orientation cultures, high uncertainty avoidance and
collectivist cultures. In addition, apart from breaking barriers of cultures, the entry mode will
also break down language barriers which are among the key barrier that has led to unsuccessfully
penetration of major multinational companies like Walmart and Starbucks in the market
(Purkayastha, Sahu, Seshaiah & Tripathy, 2019). In addition, apart from language and cultural
barriers, agents and distributors will keep the track of regulation updates at both international and
locally, change in policies, conduct market research to collect data and respond effectively to
change. With this type of support from agents, Yogurtland Company will be able to penetrate
successfully into China markets.
3.2 Segmentation, Targeting and Positioning (STP)
3.2.1 Segmentation
In order for the Yogurtland Company to maximize its ability to satisfy customers, the
market will be segmented in accordance with diverse consumer preferences and needs.
According to Tuma, Decker & Scholz (2011), segmentation involves dividing the market which
contained potential customers into homogenous groups and subgroups that are distinguishable in
terms of demographic characteristics, attitudes, behavioural patterns and psychographic profile.
The Icelandic yoghurt market segmentation will be based on the benefits of the product to
diverse consumers and the rate of consumption.

3.2.2 Targeting
Icelandic yogurt will target a wide range of customers available. The main target of
business with be youth between 2-35 years as they have a higher consumption of the yogurt
products in China as compared to others. However, With Yogurtland business focusing on
wholesale distribution and retailing, other target customers will include students, tourists,
business people, children, households, military men and women, celebrities, corporate
executives, government officials and sportspeople.
3.2.3 Positioning
Product positioning refers to the intended or specific meaning of a product in the minds
of consumers. Precisely, a product positioning articular goals that a consumer will gain after
using the brand and further explaining to others the importance of the product. To enhance the
effective positioning of Icelandic yoghurt, first, the category membership in which segment it
will compete will be identified. Icelandic yoghurt will be classified under the segment of Healthy
low-fat yoghurt. Furthermore, Icelandic yoghurt will be differentiated for its competitors through
its innovative health proposition that was never explored by other competitors. The product will
be positioned as a fat-free or low-fat product with high calcium and mixed up with nuts and
fruits in order to regulate body weight, strengthening bones and at the same time increasing the
fat bun metabolism. The positioning strategy is further presented with a positioning statement.
According to the business plan situational analysis, the positioning statement will be “To provide
healthy yoghurt product to adults and children from 1-80 years, Icelandic yoghurt offers a brand
new health fat free drinkable yoghurt which has an ability of preventing obesity, cancer, weight
gain and its richness in calcium and vitamin D ensures bones are strengthened and blood flow in
the body increased.

3.3 Marketing Mix (4ps)
3.3.1 Product
Icelandic Yogurt is the product to be launched in China market by YoghurtLand
Company. Yogurtland the manufacture of the product will use a differentiation strategy for the
product to be more appealing to the market as compared those of global and international
competitors. In addition, the Company will customize the product by adding features such as
different flavours and colours in order to capture the attention of each segment. In terms of the
packaging, Icelandic yoghurt will be packed in accordance with the size in millimetres which
have different prices. For example, 50 millimetres to target people with low income and 1000ml
for middle and higher incomes. The difference in the sizes of the Icelandic product will make
sure the product is affordable to every segment of customers. Furthermore, the product will be
processed by the company in a way that it looks smoother, tangy and noticeable thicker when
compared to other popular yogurts in china such as Nai lao or Beijing yogurt.
3.3.2 Promotion
Various methods will be sued to promote Icelandic product to the China market. With
Facebook and twitter being restricted in China since 2009 (Yang & Mueller, 2014), promotions
of Iceland yogurt will be done through the most successful e-commerce platforms in China such
as Alibaba and Amazon. The current research conducted by Shao, Zheng, Wang, Liu, Chen &
Yao (2018) shows that China is among the countries around the world with the highest number
of users online and most of the people in the country purchase diverse products through online.
Therefore, promoting and sponsoring the product on the e-commerce platforms will capture wide
segmentation of the targeted customers. In addition, the product will also be promoted through
the dominant social media platforms in china such as Wechat.

The direct promotion will also be conducted through the major cities of China where the
rate of consumption of the product is very high. Due to the high context culture of China,
Yogurtland Company will hire skilled and experienced local marketers from China who will
assist to promote the product to the targeted audiences. In addition, apart from marketing through
social media platform, the product will also be advertised through print media and mass media
which also has a wide reach. The advertisement through mass media will be a target before the
news at 1900 to 2100 hours when most Chinese are watching their televisions or listening to their
radios. The advertisement will involve a Chinese celebrity in an effort to break the existing
collectivism cultural norms (Chan, Leung Ng & Luk, 2013).
3.3.3 Price
To penetrate successfully in the competitive China market, Yogurtland will use diverse
pricing strategies. Pricing to gain market share strategy will be the first one to be considered. The
strategy will involve Yogurtland giving free samples to targeted audiences or keeping the prices
of Icelandic yogurt low for a limited period of time so as to gain market share or set up a strong
customer base in China. Upon creating a strong customer base, the Yogurtland will also use
psychological pricing strategy to promote its Icelandic product to China. The strategy will
involve gaining emotional respond of consumers instead of their national respond. For example,
Icelandic product will be priced at $99 instead of $100 which will make the target consumers
feel that the product is not very expensive as compared to those of competitors. Finally, the
pricing promotion strategy will also be used by the company. The strategy will involve
Yogurtland Company giving out promotional offers such as vouchers, discounts, coupons, gifts,
buy two get one and money to customers who buy Icelandic yogurt.

3.3.4 Place
Yogurtland will have its headquarters based in Shanghai, China as the city has major
avenues of doing business and is highly populated when compared to other cities. In addition, the
climate of the city is appealing to Icelandic drink as most customers are likely to purchase a cold
Icelandic drink during the hot season. Furthermore, the company will also establish its
subsidiaries on other major cities around the country such as Beijing, Tianjin, Guangzhou and
Dongdu. With the company selling its product as a wholesale, Yogurtland will also consider
hiring local employees to distribute Icelandic yogurt to other small cities and rural areas in
China. The available distribution channels in the China market include use of brokers or agents,
wholesalers and retail or direct selling and distribution. However, the main distribution channels
to be used to facilitate sells of Icelandic Yogurt product into China will include the use of agents
and whole sellers. The use of agents and wholesaler distribution channels will break down the
language barriers and negative cultures that may result in product rejection. The use of
distribution channels will make it easy for YogurtLand Company to distribute Icelandic product
as it will be cost-effective, time-saving and convenient to customers.
4.0 Conclusion
In conclusion, the business plan will be implemented effectively into the china market if
all the procedures and steps are keenly followed. The use of direct and indirect exporting
strategies will ease the market penetration of the product as it facilitates a low shipping fee from
Australia to China. Upon, the establishment of the customer base, the company will use
franchisees and joint venture (partnership) to expand its operations to most of the regions across
China.

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