Global Marketing Report: Nerada Tea's Market Entry Strategy in China

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MRKT20057 GLOBAL
MARKETING ASSESSMENT 2:
WRITTEN

Table of Contents
Executive Summary....................................................................................................................................3
Introduction................................................................................................................................................4
Environmental Factors that Affect International Marketing Campaign....................................................5
Conclusion.................................................................................................................................................10
Recommendation.....................................................................................................................................10
Reference..................................................................................................................................................12

Executive Summary
This assessment is an individual report analysis of country in reference with the context of
Nerada Tea decision to expand in international marketing through China and its domestic
market. The report generally developed to investigate market opportunities for potential
international promotion and sale of Nerada Tea products in China market. This report includes a
demonstration of environmental factors of China which reflects the factors that affect
international marketing campaign along with evaluation of potential opportunities and threats
that influence Nerada Tea to enter in China market. Moreover, the report consist a strategic
analysis of environmental factors such as political, economic, social, technological,
environmental and legal factor which marketing concept of Nerada Tea. Apart from this, the
report also consist a brief recommendation for moving towards export opportunities or threats
prevailing for Nerada Tea in China market.

Introduction
This assessment is developed in the form of individual country analysis report in reference with
global marketing topic. This assessment is developed in contrast with Nerada Tea company of
Australia which is famous for its black tea and the company mission to produce Australia’s
finest, freshest and most sustainable tea which would be free from pesticide. The Nerada Tea
company is committed to Australia as the whole process of tea from producing, packaging and
delivering are undertaken by Australian farmers and employers and is also committed to
sustainable farming practices for tea production. The company Nerada Tea offers tea products
such as black tea, green tea and herbal tea to the customers all over the world along with
description of reason to drink tea and its benefits. Moreover, the country chooses in the
assessment for the analyzing marketing opportunities for international promotion and sales of
products of Nerada Tea is China as China provides as efficient market opportunities for
expansion of products and boosting internal business. Apart from this China also consist a wide
market share of global market and has efficient and appropriate growth potential which is
suitable for Nerada Tea for its international expansion. The consumption of tea in China is also
high which is most suitable market opportunity for Nerada Tea and it also plays an important
role in boosting global economic growth which supports international trade between Australia
and China.

Environmental Factors that Affect International
Marketing Campaign
The potential opportunities and threats that consist the ability to influence market entry of
Nerada Tea in to China generally reflected with strategic analysis of environmental factors. The
analysis of environmental factors enables Nerada Tea to identify the factors which affect its
international marketing campaign in the China market. Moreover, the environmental factors
include a demonstration of PESTEL analysis of China market as it is an essential management
tool which reflect an analysis of macro- environmental factors of China market and it further
helps in decision making for effective international campaign of Nerada Tea in China market.
The environmental factor of China market is stated below:
Political Factors: China consist a stable political environment with improved infrastructure
which is most suitable factor for Nerada Tea to expand efficiently in international market.
Moreover, China consist effective policy for foreign investors to invest in the domestic market of
China. The government of China also support the flourishment of international trade and import
within the China market to grow its business export and import path. While the factor which
affect international marketing campaign of Nerada Tea in China domestic market is recent
unstable condition in domestic market of China for foreign investment companies due to disputes
emerge due to international unrest. However, the government of China has taken appropriate and
strict measures to prevent the foreign investors and to stop the situation for impacting the market
environment (Guo, et. al., 2013). The legal issues related with e-commerce in China also act as a
threat to Nerada Tea to enter in China market as most of the company’s operation and delivery
work depends on e-commerce while China does nor consist any regulation for supporting
privacy and security in e-commerce sector and consumer rights of electronic contracts yet.
Moreover, another political threat to the marketing campaign of Nerada Tea is the prevailing
ethnic violence as it impacts security control and international communication cut off. Apart
from this, the stable political environment and government support attracts and support
international marketing of Nerada Tea (Haentscha, et. al., 2016).
Economic Factors: China is generally known as second largest economy of world and the
country is also famous for its rapid economic growth which is a major attraction for Nerada Tea
to invest in its market as it provides opportunity to Nerada to boost its economic growth.

Moreover, the reforms of China market are on based increase productivity, technological quality
and living standard which is most suitable for Nerada Tea. While the other factors such as
inflation and unemployment are stated as those factors which affect the international marketing
of Neruda Tea as inflation and unemployment leads to decrease in economic potential and fall in
sales revenue of Neruda Tea in China domestic market and these factor also consist the ability to
decrease the purchasing capacity and power of local people of China. Apart from this high
property prices and interest rate in China also act as threat for the entry of Nerada Tea in China
market as these also affect the economic status of Nerada Tea. Along with threat the economic
factor of China also consist opportunities such as economic development of the country and
potential trends towards sustainable tea influence Nerada Tea to enter in China market (Hull, et.
al., 2017).
Social Factors: As China is known as most populous country in the world it generally consist a
massive market for consumer products which is act as an opportunity for Nerada Tea to expand
itself with its finest and sustainable tea products in the market and efficiently promotes itself in
international market. The customer spending of China is high and the citizen of China also seeks
status symbols which is appropriate for Nerada Tea to target efficient customers in China market
and to boost its economic position in international market. Moreover, the citizen of China largely
concerns with sustainable products which emerge as effective opportunity for Nerada Tea to
enter in China market as tea products of China are produced through sustainable methods and the
company also supports plastic free which is relevant with China socio cultural which further
influence Nerada Tea to enter in China market (Juan, et. al., 2017). The literacy rate, customer
lifestyles, religion and emigration of China also support the foreign investment which further
supports Nerada Tea to invest in China domestic market and to enter in international and global
market contrast. Apart from the positive impact, the social factors of China also consist certain
limitation which affect international marketing campaign of Nerada Tea and it usually includes
customer preference to physical shopping rather than online shopping which limits the company
online business operation and the other factor is rapid change in social and cultural trends which
threats Nerada Tea to expand its self in China market as the company would not be able to
predict the rapid change and the company might also lose its value in both China and
international market. Moreover, the social factor to increase the wage rate of labour and

employee in China also affect Nerada Tea marketing in China market as it decreases business
profit of Nerada Tea in China (Liu, 2013).
Technological Factors: China has better cooperation with science and technological factor and
the country also has develops itself with advanced technological innovation. The technological
factor of China hugely supported in the development of its market along with market
infrastructure and China also consist world’s largest online population users which is an
appropriate opportunity for Nerada Tea to efficiently enter and expand its business operation in
China. Moreover, China is also known as innovation driven country which provides great
opportunity to Nerada Tea to online operating its business in China domestic market. However,
the technological factor of China also consist certain limitation as China faces certain problems
related with online payment systems which creates higher level of uncertainty among Chinese
buyers regarding online shopping which further act as a threat to online operation of Nerada Tea
in China. Moreover, Chinese market also consist low credit card penetration which is widely
used for fast payment which reflects the lack of proper payment procedure in China which
further affect international marketing campaign of Nerada Tea in this country (Luxton, et. al.,
2015). Though China has undertaken various step to enhance the country’s technological base
which includes technological programs to improve IT level at rural areas and technological
innovation. But these steps of China would require a lot of time for its proper setup which further
threats efficient development of Nerada Tea business operation in China market and to seek an
efficient position in international or global market. Apart from this China good relationship with
Japan, Europe and US in science and technology cooperation generally supports improvement
and development of technological factors of China efficiently which further act as an opportunity
for Nerada Tea to enter in China market as it would further enables Nerada Tea to seek
opportunity to expand its business operation in other countries through China market. Thus, the
technological factor of China consist both effective opportunities for foreign investment and
threat to the business operation of foreign companies such as Nerada Tea with its positive and
negative aspects (Yeu, et. al., 2012).
Environmental Factors: Recently China majorly focuses on its environmental aspects and has
also been actively participating in activities related with climate change and environment
management. China also engaged in several environmental negotiations and agreement for

efficiently dealing with serious environmental issues and further treating hazardous waste
(Couce et. al., 2012). As the people of China recently generated their concern towards
environmental aspects and aims to recover environment which is as efficient opportunity for
Nerada Tea to enter in China market as Nerada Tea usually produce its tea products with
sustainable process and aims to support environment development which is suitable for China
market as per people demand. Moreover, the citizen of China generally favors products that are
environment friendly and sustainable in environment which efficiently influence Nerada Tea to
enter in the domestic market of China with its tea products as tea products of Nerada Tea are
usually grown by Australian farmers with sustainable farming methods and the tea products are
also pesticide free which provides further opportunity to Nerada Tea to effectively promote its
tea product in China market and attract citizen towards its products through its environment
supporting features (Leonidou, et. al., 2019). Apart from opportunities, the environmental factors
of China also consist certain threat to the entry of Nerada Tea in China marker as climate change
of China is usually known as systematic risks to companies operation and the products they
offer. The climate change of China usually impacts the business operation of Nerada Tea and
also impacts its product demand in market as it usually states Nerada Tea to change its product
offering in China market. Moreover, the increase concern of China government towards
environment aspects has limited the technology and infrastructure development which further
consist ability to impact Nerada Tea effective business operation in China market. Apart from
this the water scarcity in China also consist the ability to affect international marketing campaign
of Nerada Tea in China market as water scarcity is big issue and disadvantage for project
operation of foreign investors in China (Zhou, et. al., 2013).
Legal Factors: China consist various laws which regulate business operation and employment
practice in China and its domestic market. For encouraging foreign investment the China
government has undertaken the step to set up relative law system for establishment, termination,
operation and liquidation of foreign invested enterprises which further reflects as an opportunity
for Nerada Tea to enter in China market along with its tea products. Moreover, the laws on
Chinese-Foreign Contractual Joint Ventures, Chinese-Foreign Equity Joint Ventures and Law on
Wholly Foreign-Owned Enterprises provides legal basis for foreign companies as it guarantee
independent operation rights and interest of investors which influence Nerada Tea to enter its
business operation in China market (Weng, 2012). Moreover, the China government also

efficiently considers its existing laws and rules in reference with its WTO model for reviewing
and improving its laws and regulation that supports foreign investment which is further an
opportunity for Nerada Tea to enhance its business operation in China market. Apart from this,
the legal factors of China also threats Nerada Tea to enter in China market as China tax regime
demonstrates the tax implied on foreign companies and foreign companies also required to
undertake the consideration of labour standards, employee remuneration and labour contract law
for business operation in China market which threats to effective operation of Nerada Tea in
China market. Moreover, China also lacks effective legislation for e-commerce and for further
preventing online fraud, cheating and theft which is great concern for the business operation and
working capacity of Nerada Tea which affect Nerada Tea product promotion in China market
and international marketing campaign of Nerada Tea. Apart from this intellectual property rights
protection and tax of Nerada Tea is also threaten in China market as China does not consist
effective and significant laws and rules for intellectual rights protection and tax of Nerada Tea.
Moreover, Nerada Tea also require to consider China legal requirements, social values and social
responsibility for operating China market (Julian, et. al., 2015).

Conclusion
This assessment is an individual report on country analysis of China in reference of Nerada Tea
company of Australia which decides to enter in international market through China market in
contrast. This assessment aims to define market opportunities, international promotion and sales
of products of Nerada Tea in China market. This report elaborates and evaluates potential
opportunities and threats that consist the ability to influence market entry of Nerada Tea in China
along with efficient and strategic analysis of environmental factors of China that further
determines Nerada Tea business operation in China. This report firstly consist a brief
introduction of company’s background and products it offer along with the description of China
and its marketing concept that impact Nerada Tea business. Further this assessment includes a
brief discussion of environmental factors of China and its market which affect international
marketing campaign of Nerada Tea. This report mainly focuses on PESTEL analysis of China as
this analysis plays an important role in reflecting environmental factors of China and its domestic
market along with the description opportunities and threat that emerge for the business operation
of Nerada Tea in China. This assessment basically aims to reflect the concept of global
marketing along with the discussion of market, government and industry at international market
level and this assessment also includes the discussion of market potential for international
business operation.
Recommendation
Nerada Tea also recommended certain aspects for moving forward on export opportunities or
threats and for efficiently carrying out business operation in China and the recommendation are
stated below:
 Identification of market is efficient process which Nerada Tea is recommended to follow
as it enables the company to know consumption figure of tea product in the selected
country as to seek further economic growth and potential of new market.
 Developing a plan is recommended to Nerada Tea as for developing an export plan
including the consideration of people, capacity and knowledge to move forward in
marketing opportunities in China.

 Selection of proper route is an efficient recommendation for Nerada Tea to operate as it
enables Nerada Tea to ensure clarity of responsibility towards distributor, sales agent and
joint ventures.
 Legal consideration is also recommended to Nerada Tea in China as it enables the
company to understand legal and regulatory environment for moving forwards export
opportunities in China.
 Transport logistics also recommended to Nerada Tea to consider while operating its
business in China to develop sense of transportation for export opportunities in China.

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