Global Marketing Report: Zheng Food's Entry into Indonesia Market

This report analyzes the global marketing strategy of Zheng Food, a Malaysian halal food manufacturer, focusing on its potential expansion into the Indonesian market. It begins with an executive summary and introduction outlining the importance of global business operations and the rationale for selecting Indonesia as a target market. The report provides an overview of Zheng Food, its strengths, weaknesses, opportunities, and threats (SWOT analysis), and a competitor analysis, comparing Zheng Food with Indofood and Wings Group. The report then delves into the customer profile, including market segmentation, and the population of the target market. It explores marketing channels and applies Hofstede's Cultural Dimension theory to Malaysia and Indonesia to understand cultural nuances. The report recommends a market entry mode, marketing mix strategies (product, price, place, promotion), and identifies possible pitfalls in the Indonesian market, along with preventative actions. The conclusion summarizes the key findings and recommendations for Zheng Food's successful entry into the Indonesian market.

Running head: GLOBAL MARKETING
Halal food Industry
Global Marketing Ethics and Culture
11/27/2018

GLOBAL MARKETING 1
Executive Summary
Gone are the days when companies would restrict their processes to regional or local markets.
With the quick advancement in technology and expanding international trade, businesses are
encouraged to sell services and products in international markets. As such, running a business
at international level support companies to increase their market share, become competitive,
and reduce costs. Through global business operations, companies can enter into new markets
and offers services to the new target market. The aim of this report is to provide a clear
understanding of the procedures of the global business. The report has highlighted different
strategies and approaches required to consider while entering a new market. From the
analysis, it has been identified that Zheng Food possess can expand its business in the
Indonesia market because it has plenty of agricultural resources that can support in offering
different food items in the host country.

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Table of Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................4
Overview of Zheng Food (Halal Food Industry)...................................................................4
SWOT Analysis of Zheng Food.............................................................................................5
The strength of Zheng Food...............................................................................................5
Weaknesses of Zheng Food...............................................................................................5
Opportunities for Zheng Food............................................................................................5
Threats for Zheng Food......................................................................................................6
Competitor Analysis...............................................................................................................6
Analysis..............................................................................................................................7
Customer Profile....................................................................................................................8
The population of the Target Market.................................................................................8
Marketing Channel.................................................................................................................9
Hofstede’s Cultural Dimension theory for Malaysia and Indonesia....................................10
Power Distance.................................................................................................................10
Individualism....................................................................................................................11
Masculinity.......................................................................................................................11
Uncertainty Avoidance.....................................................................................................12
Long-Term Orientation....................................................................................................12
Indulgence........................................................................................................................12
Market Entry Mode..............................................................................................................13
Exporting..........................................................................................................................13
Recommendations....................................................................................................................13
Marketing Mix.....................................................................................................................13
Product.............................................................................................................................13
Price..................................................................................................................................13
Place.................................................................................................................................14
Promotion.........................................................................................................................14
Possible Pitfalls in the Indonesia Market and Prevention Actions......................................14
Corruption, transparency, and ease of business...............................................................14
Conclusion................................................................................................................................14

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References................................................................................................................................16

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Introduction
In today’s global economy, businesses of every size and scope are executing operations in
international markets. This kind of expansion can offer numerous advantages, along with
greater opportunities for growth and diversification (Baldwin, 2016). The purpose of the
report is to present the importance of going global and expanding business operations. In
order to explain this Zheng Food of Malaysia has been selected for expansion in Indonesia
market. The report will be comprised of a deep analysis of the Indonesia market to identify
the factors that can affect the operations of the business in Indonesia market. Besides this, it
will recommend the market entry strategy to enter the Indonesia market. Most importantly,
the marketing strategies will be discussed that can help Zheng Food to flourish and target
customers in the new market.
Overview of Zheng Food (Halal Food Industry)
Zheng Food Restaurant is part of Halal Food Industry Malaysia. In 2016, the market size of
global halal food and beverages was measured at USD 436.8 billion (Grand View Research,
2018). In current time, Halal has become a worldwide conception that comprises the
complete notion of healthier, clean, and clean production of food along with food services.
This is contrary to the traditional concept, which was limited to only serving animals in food
as per the Islamic law or purely unrestricted from alcohol and swine. Today, it is not
restricted to religious obligations but has come forward to be a product standard choice for
both Non-Muslims and Muslims.
Zheng Food is a Chinese Food Manufacturer placed in Selangor, Malaysia. Zheng supply
food products to convention centers, restaurants, hotels, café, golf clubs, etc. (Global Islamic
Economic Gateway, 2018).The specialty of the food manufacturer includes Pastry products,

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Dim Sum, Vegetarian Products, Four Seasons, etc. The restaurant was established in 1992 as
a private business. The food manufacturer is comprised of 11-50 employees (Job Street,
2018).
SWOT Analysis of Zheng Food
SWOT Analysis is one of the well-known frameworks utilized to access the competitive
position of the company by recognizing its strength, weaknesses, opportunities, and threats.
Precisely, SWOT analysis is an initial valuation model that evaluates what a business can and
cannot do, and its probable opportunities and threats (McGrath and Bates, 2017).
The strength of Zheng Food
 One of the strengths of Zheng Food is that it does not follow the old tradition of
Islamic law, which is restricted towards offering non-vegetarian food. Today the
whole food industry is changing, so as Zheng Food, which is focused on offering both
vegetarians as well as non-vegetarian food in the market.
 The strength of Zheng Food manufacturer in the Malaysian market is tasty and
healthy food products that help business in attracting customers.
Weaknesses of Zheng Food
 One of the biggest weaknesses of Zheng Food manufacturer in the Malaysian market
is the lack of professionalism. The manufacturer is known for its sluggish follow-up
reactions representing the absence of seriousness in their attitude and a short-term
business viewpoint. The food products of the manufacturer lack attractiveness
imitating absence of specialized understanding and training in the development of the
product (Bohari, Hin and Fuad, 2013).

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Opportunities for Zheng Food
 Zheng Food manufacturer has significant export opportunities because of the varied
agricultural products accessible in Malaysia. This reflects that the company has
adequate capacity to fulfill the Muslim importing country's demand (Bohari, Hin and
Fuad, 2013).
Threats for Zheng Food
 One of the major threats is that business deals with tough competition from food
restaurants such as Kuala Lumpur Restaurants, Penang Island Restaurants, George
Town restaurants, etc. (Trip Advisor, 2018).
 New International producers are creating food high-quality products at low prices,
which is a disadvantage for Zheng because of its higher costs of production (Bohari,
Hin and Fuad, 2013).
Competitor Analysis
Competitor Analysis in strategic and marketing management is a valuation of the strengths
and weaknesses of present and possible rivals. This analysis offers both a defensive and
offensive strategic background to recognize threats and opportunities in the international
market. Competitor analysis is said to be a significant element of corporate strategy (Fleisher
and Bensoussan, 2015).
Competitor Analysis
Basis Indofood Wings Group
Overview Indofood is one of the
leading companies of
Indonesia involved in the
food industry.
Wings is recognized as a
well-established Indonesian
business group (Wings,
2018).

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Processes Indofood is involved in all
the food-processing stages
from the raw material
production to the consumer
products production
(Indonesia, 2017).
In the initial stage of the
business Wings group use to
produce detergent and soaps
in East Java, but presently it
is involved in the exporting
of the food products all
around the world.
Products The business offers a wide
range of products such as
dairy, food seasonings,
special foods and beverages,
noodles, and snack foods.
Wings offer sauces, instant
noodles, and three types of
beverages i.e. Ready to drink,
coffee, and power drinks
(Indonesia, 2017).
Unique Selling Point The Unique selling point of
Indofood is its different tasty
and attractive dishes.
The unique selling point of
Wings food is the marketing
strategies that have supported
it in achieving one of the top
positions in the market.
Focus Indofood focuses on offering
quality products to the
customers.
Wings Groups gives priority
to its market strategies such
that it can represent its
offerings in the market.
Analysis
From the above comparison, it could be said that Indofood is one of the key players as well as
a big competitor for Zheng Food in the Indonesia Market. Indofood is a leader in the market

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in terms of its strategies and offerings. In order to survive in the Indonesia market and give
strong competition to Indofood, Zheng Food has to come up with new and appealing dishes
that can gain the attention of the customers in the market.
Customer Profile
A consumer profile is said to be a manner of explaining a consumer definitely, such that they
can be grouped for advertising and marketing purposes. By advertising the selected target
market, businesses can identify more success in vending a specific product and enhance
profits (Gunter and Furnham, 2014). Zheng Food will target both Muslim and Non-Muslim
communities to sell their food products in the market. In addition, the business will target
personal and organizational consumers of both the communities in the Indonesia market.
Market Segmentation Target Market
Muslim Community and
Non-Muslim Community
Personal Consumer – These type of customers
purchase products for their own consumption or
use.
Muslim Community and
Non-Muslim Community
Organizational Consumer – These type of
customers purchase products to fulfill the needs
and operate the organization (Marbun and LKS,
2018).
The population of the Target Market
As per the Pew Forum graphic around 88% of the population is Muslim, and the country is
home to over 13% of the world's Muslims (Pew Research Center, 2010).

GLOBAL MARKETING 9
Source [(Pew Research Center, 2010)]
Marketing Channel
Marketing channels are the conducts through which services and products are provided to the
customers. All the products have to move towards customer through a channel of distribution,
and marketing will be based on the way products are distributed. There are different types of
marketing channels such as retail, franchising, wholesale, retail partner, value-added reseller,
wholesale, direct marketing, and brokers/agents (Rosenbloom, 2012). Zheng Food will
operate its business through retailing as the marketing channel to directly offer products to
the clients. In retailing, products are distributed through locations that are owned by the
business. This marketing channel will be beneficial for Zheng food in the Indonesia market,
as it will allow business to interact directly with its clients and understand their demand.

GLOBAL MARKETING 10
Besides this, it will support them in taking proper feedback from the customers about the
food.
Hofstede’s Cultural Dimension theory for Malaysia and Indonesia
Hofstede’s cultural dimensions theory is said to be a structure for cross-cultural
communication, established by Geert Hofstede. It defines the influence of the culture of the
society on the values of the people, and the way values are related to the behavior, by
utilizing a structure derived from the factor analysis (Munro, Schumaker and Carr, 2014).
The Hofstede’s Cultural dimension theory is comprised of six dimensions are as follows:
Source [(Hofstede Insights, 2018)]
Power Distance
This dimension of the theory discusses that not all the people in society are equal. Power
distance is distinct as the degree to which the fewer powerful followers of organizations and
institutions in a country
Malaysia covers a high score in this dimension i.e. 100, which reflects that people adopt a
hierarchical order in which everyone has a position and that requires no more justification
(Hofstede Insights, 2018).

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Indonesia also gained high score in this dimension i.e. 78, which reflects following
characterizes as the style of Indonesia: Relying on hierarchy, uneven rights distribution
between non-power holders and power holders, directors inaccessible, administration
delegates and control, and leaders are directive.
Individualism
The basic issue talked through this dimension is the level of interdependence maintained by a
society among its supporters. Malaysia has gained 26 scores in this dimension which makes it
a collectivistic society.
Indonesia score low in this dimension i.e. 14, which makes it a collectivist society (Hofstede
Insights, 2018).
Masculinity
A high score (masculine) in this dimension reflects that the community will be driven by
success, competition, and achievement. A low score (Feminine) in this dimension reflects
that the society's dominant values are quality of life and care for others. Malaysia has scored
50, which is an intermediate score; therefore, preference cannot be defined for this
dimension.
Indonesia has scored 46 in this dimension, therefore, it is considered as a low Masculine
(Hofstede Insights, 2018).
Uncertainty Avoidance
This dimension talks about the way a community faces the fact that the future can never be
known. Malaysia gained 36 as a score for this dimension and therefore has a low preference
for evading uncertainty. This reflects that people in Malaysia have a relaxed attitude.