OZ Sports: Marketing in China and Ethical Considerations

The case study analyzes the challenges faced by OZ Sports in its international marketing endeavors, particularly focusing on the Chinese market. It highlights the importance of understanding consumer behavior, cultural differences, and ethical considerations when entering a new market. The analysis emphasizes the need for OZ Sports to address environmental ethics, especially concerning the use of animal products and responsible outsourcing practices. The study also explores effective marketing strategies, including e-commerce, promotion, and the significance of government regulations. Furthermore, it examines the influence of cultural values, such as collectivism, and the importance of adapting marketing approaches to resonate with Chinese consumers. Finally, the case underscores the significance of conducting thorough market research, understanding consumer preferences, and incorporating ethical considerations into all aspects of international marketing to achieve success in the competitive global market.

Running Head: CASE ANALYSIS 1
Case Analysis

Running Head: CASE ANALYSIS 2
Section 1:
There are several issues and challenges in the outsourcing process of a business organization.
OZ sports have chosen to outsource due to the increase in demand which cannot be met
domestically. However, it had to face various environmental related issues. Consumers are
becoming socially responsible and are accepting only those products and services which align
with their environmental principles. Many times, organisations perform unethical practices
and do not follow the ethical principles in their working. OZ sports should pay attention to
the working conditions, safety of the products and safety of the workers when they are
outsourcing their business operations. It is evident that although the companies pay attention
to these regulations while operating in the domestic country they do not follow the regulatory
practices of the outsourced country (Serkan, 2007).
Global outsourcing may cause environmental pollution and many big companies which
outsource their business negatively impact and degrade the environment. However, due to
Environmental Protection Department, a check has been created on the outsourcing
companies. It has been formed to look into the ethical matter related to environment and also
companies who violate it are penalised heavily. In the case of OZ sports, it is evident that the
company should consider the above issues before doing outsourcing. Another environmental
ethics is related to the discharge of waste into water which includes metals and other inputs
used in the production process (Chan, 2014).
It is high time for the organisation to act as a socially responsible organization. At the time of
outsourcing this is more evident as environment consideration and its ethics should be the
first priority of OZ sports. It is also clear that nowadays people are getting more conscious
towards consumerism and will not accept goods that violate the ethics. OZ sports products
are made of kangaroo skin which is not correct ethically. Moreover, while outsourcing its
production in Indonesia it should be kept in mind that the production process does not
degrade the environment (Patra, 2014)
Using animal skin or any other animal parts will not be considered as an ethical activity and
will also affect the CSR activities of the company. It is advisable for the company to carry out
CSR activities as it would help it to increase their sales and brand image. Educating people
about protecting environment and about reusing and recycling products is a part of CSR
activities (Mathivanan and Pazhanivelu, 2013).

Running Head: CASE ANALYSIS 3
While involved in outsourcing, it is evident for OZ sports to look forward towards reducing
the operating cost and should teach employees towards saving energy, water and should focus
towards respecting the culture of the country in which they are operating. Issues associated
with environmental ethics are related to culture and heritage. The environmentalist concern is
to focus towards protecting animals because they are a part of the environment and its
welfare is relevant. Rights and interest of animals should be taken into consideration while
outsourcing (Khalid., Moorthy and Saad, 2012). However, there is certain devastating and
fundamental problem associated with environmental ethics and those are individualistic in
nature. There are different international protocols that deal with these issues. Kyoto Protocol
is something which deals with the global issue of reducing green house gas effect. These are
certain environmental ethics that should be followed by the organisation.
Section 2
Social cultural values influence the consumer behaviour to a great extent and in this case,
Chinese consumer market has been chosen because the population growth of the country is a
mark towards increasing demands of the consumer. Before entering any international market
it is important to study the consumer behaviour of the place and, in the context of China, it is
important to study their buying pattern. In China people first, shortlist the product to be
purchased then make the purchasing decision. It is important to get the name of OZ sports in
that list and moreover Chinese people prefer to spend only 2.5% of their income on the
branded products and they do not prefer to buy unfamiliar products easily.
It has also been observed that preference for domestic brand has dropped drastically in the
past years making it favourable for the foreign brand to establish them in foreign market.
It is also important to understand the cultural level in marketing. There are four type of
culture namely super culture, macro culture, Meso culture and micro level and purchasing
decision is made on the basis of this cultural difference. In China, people take buying
decision on a group basis. Duties and norms followed in the group influence their buying
behaviour. Another aspect of Chinese culture is that they follow the consumer buying process
before making purchases. They first try to recognise the need to purchase the product then
search relevant information associated with the product, then they evaluate different
alternatives and then makes purchases. However, with the changes in the technology and
changing social norms China is getting more inclined towards Hi-tech products (Luo, 2009).

Running Head: CASE ANALYSIS 4
China is also expanding rapidly in terms of market. They are welcoming new products and
technology. However, differences in the Chinese culture and western culture are a hurdle for
the international firm like OZ sports to market in China. A successful manager should first try
to understand the cross cultural differences that could occur in marketing process. Chinese
culture of Confucianism put forward the principles of the consciousness of an individual and
its ability to take right decisions.
It also throws light on collectivism and is a strict opposition to individualism (Boontanapibu,
2010). It is so because they refer collectivism as something which is important for the well
being of the society. Their buying behaviour is focused more on the principle of guanxi
which means to have a good connection and do something for each other (Khairullah and
Khairullah, 2013).
In the present global economy, the lifestyle and income of Chinese people is increasing
which has increased the local demand for expensive product. OZ sports products have
competitive advantage because of the product made of kangaroo skin which also makes it
expensive. It is another reason which has encouraged the company to focus on Chinese
market. They focus on quality and making purchases through e-marketing; therefore, OZ
sports should focus on marketing through e-commerce portal. It has already been said that
China is getting technology savvy which has created a large market base for the company to
sell its products (Yuan and Kuamh, 2013).
Scene 3
As an international marketing manager, it is essential to first understand the buying pattern of
the consumers. In China, people prefer to buy product through e-commerce portal; therefore,
marketers should launch their product through online portal. Moreover, it is also important to
understand the cultural norms of the country and as Chinese prefer collectivism; marketers
should focus on this aspect while marketing their product. (Ahmed.,Ullah and Alam, 2014)
It is important to focus on certain strategies before entering international market which is
developing product strategy. Quality, price and features of the product is something which is
valued by the consumers. Next is promotion strategy (Adewale., Adesola and Oyewale,
2013). In China, the traditional way of entering the market is through television followed by
sponsorship and advertisement. It is also advisable to involve local advisor who is familiar
with the market condition of the country. Furthermore, Chinese government is not too open

Running Head: CASE ANALYSIS 5
towards foreign investment; therefore, it is important to understand the government
regulations, policies and understand its implications. Sports products are mainly used by the
young people; therefore, it becomes important for the manager to understand the young
Chinese consumers, their perception, and demand. For this, it is important to conduct survey
regarding their mind-set and mannerism and their attitude towards viral marketing. The
survey could be conducted with the help of structural model testing as it will help the
marketer to know about the norms of viral marketing attitude (Yang, 2013).
Along with this, it is also important to take environmental ethics into consideration.
Destroying the natural resources and harming the environment is a punishable offense;
therefore; it is evident for the marketers to see that their product do not degrade the
environment. Rules and regulations for an international firm are strict in China; therefore,
consideration of environmental ethics is important (Palich., Neubert And Mckinney, 2016)
For Western countries, it is a challenging task to conduct business in China successfully. The
problem is related to the culture as China is a socialist economy and Australia is a capitalist
economy. The market should understand the socialist pattern of the country and should focus
on distribution of these products which promote socialism (Clair and Norris, n.d)
It is advisable for the OZ sports to conduct dynamic cluster analysis to get an idea about the
attribute of the product and the firm. It also gives an insight into the international strategy and
performance of firm. A positive relation between the elements will give a positive outlook to
the marketer for conducting its business in China. One of the positive aspects of Chinese
market is that the existing companies are very familiar with the international firm and the
market should focus on developing and nurturing their relationship with the Chinese
companies. In the recent past, the government has developed open door policy which
encourages foreign investment and it is essential for the market to understand these policies
and procedure as it would help them with their product establishment (Huo and Hung, 2015).

Running Head: CASE ANALYSIS 6
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