Strategic Marketing: Somer Dale International's China Market Expansion

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Added on 2024/07/03

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This report analyzes Somer Dale International's strategy for expanding its cheese business into the Chinese market, focusing on the 5Ps of marketing: product, price, place, promotion, and people. It examines the suitability of cheese products for the Chinese market, considering factors like consumption trends, population growth, and demand. The report suggests adapting product taste to align with local preferences, particularly Nuburi, Rubing, and Rushan cheese types. A competitive pricing strategy, sensitive to the Chinese market's price and brand consciousness, is recommended, along with diverse distribution channels including wholesale, supermarkets, local shops, and online sales. Promotional strategies should leverage brochures, events, television, radio, newspapers, and social media. The report also emphasizes the importance of understanding Chinese culture through the Hofstede model, focusing on teamwork and cultural integrity in employee recruitment and training. Ultimately, the report provides a comprehensive framework for Somer Dale International to successfully launch and establish its cheese products in China.

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Contents
INTRODUCTION...................................................................................................................2
REPORT................................................................................................................................. 3
1.1........................................................................................................................................ 3
1.2........................................................................................................................................ 5
1.3........................................................................................................................................ 6
1.4........................................................................................................................................ 7
1.5........................................................................................................................................ 8
CONCLUSION....................................................................................................................... 9
REFERENCES.................................................................................................................... 10

INTRODUCTION
The report is based on the company “Somer Dale International”, the company is a
Cheese company and wish to expand its operations in China. The report is based on
the 5 P analysis of marketing that are product, place, prices, promotion and people
and undertakes the aspects of Chinese market conditions. The report highlights the
main factors such as the cultural model, promotion, distribution channels and the
study of product and pricing strategy. The report also helps to understand the
methods that must be adopted by the company for optimum outputs.

REPORT
1.1
Product
The main product that the company needs to launch in the Chinese Market is a
range of cheese. The product is appropriate according to the Chinese market
because of the following factors:
Consumption of Cheese in China
The consumption of the cheese in China is forecast to rise in the next five years and
this will act as an advantage for the company.
Forecast of Cheese in retail in China
Source: Bordbia, 2014
Population Growth and population diversification
The population in China is likely to grow in the next years and the diversification in
the population is favourable for the cheese company (Australia, 2014). In addition to
this, the company will get an opportunity to expand because of existing population
density (Jobber and Ellis-Chadwick, 2012).

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Growth in demand
The Demand for the cheese products in China has been constantly growing and this
is reflected in the import of the cheese products in China. The Data shows that the
growth in the Cheese consumption has increased up to 58% since 2010 (Hoogwegt,
2018).
Figure 02: Cheese Exports to China
Source: Hoogwegt, 2018
DIVERSIFICATION AND CHANGE REQUIRED ACCORDING TO THE CHINA
MARKET
The main diversification this will be required for the China Market will be a change in
the product taste according to the common use and interest of China. The
diversification that will be required in the product will be based upon Nuburi, Rubing
and the Rushan Cheese as this is the most famous cheese types in China (Powell et
al. 2011). In addition to this, the other diversification that will be required will be
based upon the packing and presentation of the products.

1.2
PRICING STRATEGY
The pricing strategy of the company must be based on the most suitable approach
according to the condition in China.
Price
As the company is going to launch the product in China and the company is also
new for the Chines population, the price of the product must be less than the
competition. This will help the company to cut the competition and also support
growth (Hair Jr and Lukas, 2014).
Price Sensitivity of Chinese Market
The Chinese market is price sensitive and the Chinese society can be structured
similarly to a Pyramid (Australia, 2014). In which the number of the rich class is less
and the number of the poor class is high. In addition to this, the Chinese are also
likely to be brand and quality sensitive. Looking at these perspectives the pricing
must not be straight but the company must offer a variety of product with different
pricing. The company must also provide the discounts and the offers on the
products.
Market Entry Strategy
The market entry strategy must be based upon four factors that are brand, prices,
promotions and the quality.
 The company must ensure that the brand reputation is high in the market
before the launch of the product, this will support the sales in the Chinese
market
 The price of the product must be lower than the competition and the company
must offer a variety of products at different price.
 The promotion of the product must be carried out by various media such as
social media, newspapers and the radios
 The company must ensure that the quality of the products is high its
information is delivered to the customer (Hair Jr and Lukas, 2014).

1.3
DISTRIBUTION CHANNEL FOR THE PRODUCTS
The distribution channels that can be used by the “Somer Dale International” is with
the help of the wholesale distribution to reach the higher number of customers. The
other method that can be used is distribution with the help of supermarkets and the
local shops (Australia, 2014). Additionally, the company can also sell its products
online for improving the volume.
Figure 03: Distribution Channel for the Products
Source: Author’s Work, 2018
ONLINE
SUPER
MARKETS
WHOLE SALE
DISTRIBUTION
LOCAl SHOPS

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1.4
MARKETING STRATEGY
Promotion
The promotion of the products must be conducted with the help of the broacher
distribution, events and the shows on television and the radio. This will help to
improve the research the product and the brand awareness.
Advertisement
The advertising of the products can be done with the help of newspapers and the
social media. As this are likely to be the most suitable medium of the Chinese
conditions (Baker, 2014).
Market Entry Strategy
The market entry strategy that can be used by the company is launching an "Joint
venture" with a supermarket or the existing dairy company in the China (Baker,
2014). This will help the company to get market development support, it will also help
to reduce the amount of investment and the get appropriate suggestion related to the
legislation and the culture of China.

1.5
RECRUITMENT AND TRAINING OF EMPLOYEES
The Hofstede cultural model of China helps us to understand the culture of the
country. It highlights that the Chinese people like to do activates in the group and
there is a strong sense of success and the development (Hofseted Insights, 2018).
This model also suggests that the society is adaptable to changes and likely to be
leisure oriented.
Figure 04: Hofstede Culture Model of China
Source: Hofstede Insights, 2018
With the help of the conclusion for the Model, we can understand we will take the
employees who can work in teams. In addition to this, the employees must have a
storage sense of connection with the company (Hofstede, 2011). During the process
of training of the employees, care must be taken that cultural integrity is maintained
and the skills required for the job are taught and the employees given information
related to product quality and brand in detail.

CONCLUSION
The outcomes of the report help us to understand the 5 P of the marketing. The
report also helps us to perceive the best possible methods that can be adapted for
the product launch and establishment in China. The study that is conducted in report
is used to perceive the concepts of distribution, promotion, advertisement and the
culture models. The knowledge and the information that is gained in the report are
useful for future perspective.

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REFERENCES
 Australia, T., 2014. China market profile. Retrieved Jan, 26, p.2015.
 Baker, M.J., 2014. Marketing strategy and management. Macmillan
International Higher Education.
 Bordbia, Growing consumption of processed cheeses in China, 2014
(https://www.bordbia.ie/industry/manufacturers/insight/alerts/pages/
growingconsumptionofprocessedcheesesinchinasurbancentres.aspx last
accessed on July 2018)
 Hair Jr, J.F. and Lukas, B., 2014. Marketing research (Vol. 2). McGraw-Hill
Education Australia.
 Hofseted Insights, China, 2018 (Online available at https://www.hofstede-
insights.com/country/china/ last accessed on July 2018)
 Hofstede, G., 2011. Dimensionalizing Cultures: The Hofstede model in
context. Online readings in psychology and culture, 2(1), p.8.
 Hoogwegt, Cheese Demand Grows Steadily in China, 2018 (Online available
at https://www.hoogwegt.com/media/1589/horizons-July-2015.pdf last
accessed on July 2018)
 Jobber, D. and Ellis-Chadwick, F., 2012. Principles and practice of marketing
(No. 7th). McGraw-Hill Higher Education.
 Powell, I.B., Broome, M.C. and Limsowtin, G.K.Y., 2011. Cheese| starter
cultures: general aspects.