Strategic Marketing Report: Marshfield Bakery's Expansion into China

This report provides a strategic marketing analysis for Marshfield Bakery Ltd (MBL) as it plans to expand its operations into China, focusing on offering sugar-free cakes to health-conscious consumers. The analysis includes a PESTLE framework to assess the macro-environmental factors, a SWOT analysis to identify internal strengths and weaknesses along with external opportunities and threats, and a discussion of various market entry modes such as licensing, franchising, partnering, foreign direct investment, and joint ventures, recommending partnering and strategic alliances for MBL. The report also touches upon market segmentation strategies for targeting Chinese consumers and Porter's generic strategies for competitive positioning, aiming to provide a comprehensive overview for strategic decision-making in the context of international market entry.

Strategic Marketing

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Explaining product, country and conducting macro environment analysis so that possible
opportunity can be identified......................................................................................................3
Market entry modes for international business...........................................................................6
Market segmentation...................................................................................................................8
Porter Generic strategy................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Strategic marketing refers to utilization of practices that can help in achieving
organizational objectives by developing distinct characteristics & sustainability. In the current
era, it is essential for company to pay attention on developing strategic marketing techniques so
that higher profitability and sustainability can be attained. The current report is based on
Marshfield Bakery Ltd (MBL) which is one of small organization operating in manufacturing
industry & offers products like rusks, biscuits, cake, etc. The main aim of firm is to expand its
operational practices in China by offering cakes with speciality of sugar free aspects so that
targeting customer like health conscious people can become possible. Present case study will
involve PESTLE & SWOT analysis so that depth of prevailing circumstances can be identified.
Current case study will include market entry options & apply SATPO model so that significant
aspect regarding offering products & targeted audience can be identified. Present case will
include porter’s generic strategic in turn details of prevailing of industry can be obtained to make
strategic decision.
MAIN BODY
Explaining product, country and conducting macro environment analysis so that possible
opportunity can be identified
Marshfield Bakery Ltd is one of the small enterprise that operates in manufacturing
industry. It is looking forward to expand its operational practices in China as related industry is
growing at CAGR of 9.2% which is beneficial for the organization. Rapid growing factor can
largely contribute MBL have higher market share in sector so that continuous profitability can be
derived. China market of cakes, pastries, etc. is mainly driving change in lifestyle and
increasing consumer preferences for health that can allow specified organization to have
competitive advantages (Perera, 2017). On the basis of faster growing rate it can be identified
that expanding in Chinese market can be good option. In addition to this, more information in
respects to macro environment can be identified by applying PESTLE analysis so that all
opportunities and threats can be recognized.
PESTLE Analysis
Political factor

In china, political condition is one of the significant factor which need to be highlighted
while taking decision regarding expansion & diversification. There is larger impact of political
relation in smooth functioning of business which decides sustainability of company in China. In
addition to this, there are few factors which need to be taken into consideration which includes
government regulations, legal issue, etc. Tariff, tax, policy, trade restrictions, political stability
play important role in influencing business practices in both positive and adverse manner (Zahari
and Romli, 2019). In order to get sustainability by Marshfield Bakery Ltd while conducting its
business activities in china requires firm to largely adopt proper compliance with the political
stability, tax, etc. related policies in turn higher relationship can be maintained.
Economic Factor
It includes aspects like GDP, unemployment, saving, interest, etc. highly share in
deciding movement of business practices. In addition to this, Marshfield Bakery Ltd as being
cake manufacturing firm largely need to understand economic factors of China so that significant
evaluation of taking decision regarding expansion can become possible. The growth rate of
specified industry is 9.2% which is positive sign for MBL so that various benefits can be
attained. It is possible to achieve cheap labour, raw materials, etc. so that smooth functioning can
be exerted (Casañ, Alier and Llorens, 2021). Supply chain, trade policy, etc. are good factors
which need to be taken into practice as positively influence business activities,
Social factor
It largely helps in assessing existing consumer trend as this element largely pay attention
on identifying attitude, belief, market trend, etc. so that accurate & suitable decision formulation
can become possible. Chines customers’ lifestyle, preferences, taste, etc. has been changed as
compared to previous. The social trend of China in respect to cake has changed which can have
enabled customer to largely concentrate on having healthy products so that their objectives can
be accomplished. Marshfield Bakery Ltd can favourably get affected from this prevailing social
trend of China that can enhance productivity and profitability of business.
Technological factor
This sis crucial for organization to ascertain that its firm has enough capacity to cope up
with current technological requirement of industry. This highly share in making operational
activities in effective by optimum consumption of factors of production in turn better processing
can be done. In China, technologies keep on changing as it is highly advanced in innovations

that permit business to increase their revenue. There is larger emergence of e-commerce
activities so that higher sales can be achieved and allow customer to get ease in fulfilling their
requirement. Marshfield Bakery Ltd can get positively influenced from this factor as needs good
amount of fund in turn adaptation can become possible.
Legal factor
There are few major legal policies that are amended & imposed for business so that
compliance with prevailing circumstances can become possible. There is restriction of social
media usage in China which is biggest threat (Phan, 2021). Foreign investment, strict regulation,
etc. are imposed and need to be followed by Marshfield Bakery Ltd so that smooth processing
can be done. In order to be successful an organization is required to largely concentrate on
developing ability to cope up with legal legislation & laws so that higher sustainability can be
derived.
Environmental factor
China majorly concentrate on optimum utilization of resources so that preservation of
resources can become. There is need to be follow all responsibilities regarding consumption &
protection of environmental resources by Marshfield Bakery Ltd so that appropriate processing
can be done.
SWOT analysis
Strengths
 It follows data driven strategy as has
good capital structure & workforce with
diverse skills.
 There is much emphasis on adopting
innovative practices by adopting
technologies.
Weaknesses
 There is lack of effective marketing
practices.
 There is ongoing conflict with investor
that can affect smooth functioning and
have lack attention on getting diverse
supply chain management.
Opportunities
 The one of the biggest opportunity that
can achieved by Marshfield Bakery Ltd is
ability to expand market share in turn
inclines sales revenue can be derived.
Threats
The biggest threat for Mark shield Bakery is
the entry of new competitors in the market.
The competitors may low down the profit of
the bakery as the competitors will bring

 The cited bakery can do good
marketing and advertising with celebrity
for the expansion of market share.
Customers can be attracted with the
attractive and eye-catching advertising.
The choice of location of the bakery must
be good and products made by them
should be hygienic.
substitutes of the products. This will create a
tough competition between them and will lead
to cause loss for the bakery.
The another threat for the cited bakery is the
favourable changes in the taste of consumers.
The taste and preferences of the customer’s
changes on regular basis. The continues
changes in taste and needs of the customers
may decline the profitability of the bakery. It
may create recession time for the bakery and
creates difficulty in surviving in the market.
Market entry modes for international business
Licensing and Franchising: An entity that want to enter into the international market with
lowering the risk related to finance and legal risk, may make an agreement related to licensing
with the outside companies (Blackburne and Buckley, 2019). The agreement related to licensing
helps the parent country i.e. the licensee for selling their products manufactured by them to the
host country i.e. the licensor. This agreement also helps in using the patents, trademarks and
copyrights of the company. It is basically a permission that is given to licensee to use licensor's
property. The licensor pays the charges to the licensee for using its intellectual property.
There is another best way of market entry mode is franchising. In this an agreement is made
between the companies that are called franchise agreement. In this entry mode, company sell its
brand name to the outside company for selling its products as well as services.
Partnering and Strategic Alliances: This entry mode is based on contractual agreement
which basically means the agreements or partnerships made for some particular contract and for
definite period of time. It is an agreement between two or more companies that have common
aim for a certain period of time. This entry mode is becoming popular from the last years. This
helps the company to divide the risk and capital that is required for the company to enter into the
foreign markets (Lin and Ho, 2019). It helps the companies to maintain their wealth in the
competitive market. The strategic alliances help the small companies related to cost reduction

and less risk. The alliances can be given for various purpose like sharing of the innovations,
improving the products, increasing the sales and share of the market etc. The company must
always choose the right partners with having some qualities like the company must be
compatible, should have efficient resources and skilled labours and the company must be
financially capable in exploring the foreign market.
Foreign Direct Investments and Subsidiaries: Foreign Direct Investments means the home
country is investing in the foreign country. By this, it takes the ownership of the foreign
company. It includes the equity capital and short and long term capital. The company has control
over the subsidiary company. It is an expensive entry mode to enter into the outside market but it
is one of the best way to enter into the foreign market. The company investing in the foreign
company can be termed as foreign subsidiary of that company. It helps to maintain the control on
the operations of the company. Sometimes, people don't invest if they are not developing good
investment conditions.
Joint Venture: It is a venture made foot the specific purpose for a specific period of time.
Two or more companies make a venture on the specific project by becoming partners for that
definite period of time which helps them in sharing of risk and rewards, sharing of new
innovation etc. for the development of the venture (Hollender, Zapkau and Schwens, 2017). The
agreed companies can increase their capital through by dividing the capital of each company.
This venture does not create any ownership on the other company because it is a contract based
agreement i.e. contract done and partnership ended.
Recommendation for new entry model suitable for the Marshfield bakery Ltd:
From the above mentioned new entry modes the best suitable modes for the Marshfield
Bakery Ltd. is Partnering and Strategic Alliance. The reason for this suitable mode is that the
company can raise the capital by partnering with other companies and make alliances like
improving the technology and manufacturing of products. By this, it increases the sales and
market share of the company. The best thing is that for the bakery is that it can increase its cost
by doing the less investment, it also decreases the risk area for the bakery. The bakery must
choose right and compatible partners which could be beneficial for them in the course of their
business.

Market segmentation
For Marshfield Bakery to enter in Chinese market it is very essential that they properly
segment and target the consumers for the product and service. The reason underlying this fact is
that when the consumer of company will be evaluated correctly then this will provide a better
base to grow and develop (Camilleri, 2018). The focus on consumer segment is essential as the
company will know the preference of consumer then they will be in position to market their new
product of sugar free bakery products effectively in Chinese market.
 Market segmentation- the segmentation is being defined as grouping the consumers on
basis of some common characteristics. This is essential for the company to segment the
consumer in some common group as it will make it easier for the company to attract the
particular consumer. Also, when the consumers are grouped in some common basis then
the marketing strategies are also similar for every group. There is different basis on
which bakery can segment consumers like demographic, behavioural, geographic and
psychographic. Thus, in the present case of Marshfield Bakery the major segment
selected is demographic and psychographic segment. The reason for the selection of these
two is that it will provide more good set of consumer who will like the sugar free cakes
and pastries.
 Market targeting- targeting is referred to as selection of some of the key targets from
the segment chosen by the company. this simply means focusing on some of the major
target so that company can increase the sales of the company. Here in case of targeting,
Marshfield Bakery first evaluates the different segment and on the basis of their
characteristic decides that which segment need to be targeted. This is essential for the
reason that when there will be a specific target then Marshfield Bakery will be able to
focus on attracting that target only (Paruchuri, 2019). The major target on which
Marshfield Bakery will focus while entering in China is health conscious people and
people suffering from diabetes. The reason for selection of this target is that company is
coming up with sugar- free products and this target will be more profitable for the
company.
 Market positioning- the positioning refers to as creating a good image of the product
and services in the mind of consumers. This is essential for the success as in case the
company will not be having good position in mind of consumer then this will be affecting

the working of business. hence, it is essential for Marshfield Bakery that they must have a
good or distinct feature which creates a good position in minds of consumers. Thus, for
the creation of position within the mind of consumers the major focus will be on quality
of products (Kalam, 2020). The reason underlying this fact is that in case quality of cakes
and pastries will be good then this will position the product among consumers in good
and effective manner. Hence, when the ingredients will be of good quality then the
products will be good and will create a distinct position in mind of consumers.
The potential target of Marshfield Bakery will be a focus on young health conscious people and
people suffering from diabetes. The reason for this choice of consumer is that it will result in
increase in sales of company and as a result of this profit will increase.
Porter Generic strategy
Porter's generic strategies are the strategies developed by Michael Porter in 1980.
This model shows that how the company can survive in the competitive market (Islami, Mustafa
and Latkovikj, 2020). This model describes the relation between the lowering the cost,
differentiation in products and market focus. This is a good model which is assistive to
Marshfield Bakery in order to improve its strategies for entering in Chinese market. These
strategies involve the following-
 Cost leadership- In this strategy company reduces it costs for increasing the profits. The
company should low it cost as could be possible by them. The company should have high
market share for selling their products. The company should make itself a low cost
producer. This helps to increase the profitability of the company. this is a strategy
wherein the major focus of Marshfield Bakery will be on reducing the cost for the
company. this is essential for the reason that when the focus will be cost reduction then
this will result in increase in profits. Along with this, when the cost will be reducing then
prices charged to the consumer will also be low and as a result of this large market can be
captured.
 Differentiation strategy- The products manufactured by the company should be
different and unique from its competitors. Different products attract the consumers to
purchase that products. The company should do research in the market and make unique
products for their customers (Kabeyi, 2018). Sometimes is risk based because customers
may not prefer new products. The products should be more creative and attractive from

the previous products. here the major focus of Marshfield Bakery is on developing
innovation within product and service of company so that consumer gets attracted. Here
Marshfield Bakery focuses on developing some of the distinct feature so that consumers
are attracted towards company (Hales and Mclarney, 2017). So for this, Marshfield
Bakery is providing the distinct feature of sugar free cakes and pastries which will attract
majority of people.
 Focus strategy- This strategy focus on the features of the products that the products
should have some unique quality. It creates the brand loyalty for the customers. The
company must focus on the uniqueness of the products to maintain their position in the
market. this is the strategy which involves concentrating on a particular market in order
understand its dynamics and work accordingly. This strategy is also assistive of
Marshfield Bakery as it will outline the major focus of the company that is focus on sugar
free products.
The major strategy suggested to Marshfield Bakery for entering in China is to have a focus
strategy. This is because when company is having a focus area then this will motivate company
to develop various strategies to promote the product with a particular focus (Firoz Suleman,
Rashidirad and Firoz Suleman, 2019). This strategy is better in comparison to other generic
strategy like cost and differentiation as the focus will guide Marshfield Bakery to work in more
effective and efficient manner.
CONCLUSION
The above report concludes the fact that strategic marketing is defined as marketing
disciplines used by company for attainment of goals of business. without strategic marketing,
company cannot get successful and cannot attain any competitive advantage. The PESTLE
analysis summarised the fact that entering in China is beneficial for the company as it will
increase the profitability of company. Also, it was analysed that major segment of company is on
basis of demographic and psychographic. The target chosen was young health conscious people
and diabetic patient. In the end it was analysed that focus strategy under Porter generic strategy
is more beneficial as it will provide a clear focus for the company to work.

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Online
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