International Marketing Analysis: A2 Milk Company Limited Assignment Answer
INTERNATIONAL MARKET ANALYSIS AND ENTRY STRATEGY
The report deals with international marketing analysis and marketing strategies. The company A2 Milk Company Limited is selected for the study. The report deals with the external marketing analysis are required as this helps in dealing with critical success factors. The report also deals with the procedure for entering the market is used as this helps in the successful expansion of business in better ways. The report also focuses on strength and weakness of company. The external marketing analysis is considered for expanding business in China. The products chosen in study are A2 Milk Light product of A2 Milk Company Limited for expanding business in China.
International marketing analysis helps in developing business in other countries. The marketing strategies help in expansion of business in Australia. A2 Milk limited company is the biggest provider of milk to Greater China. The company is focusing on expanding the market to an international level. The products are fresh milk and milk products such as powder, skim milk; full cream milk, smart nutrition and many more are internationally famous. For expanding the business, international marketing strategies are needed for successful expansion. The external marketing analysis is required as this helps in dealing with critical success factors. The procedure for entering the market is used as this helps in the successful expansion of business in better ways. The possibilities, advantages and disadvantages are considered which are required for dealing with the upcoming factors.
- Organisation history
A2 Milk Company is one of the successors of A2 Corporation Limited with New Zealand which was founded in 200 by Dr Corran McLachlan who was researching for health effects of and Howard Paterson and A1 beta-casein who is one of the New Zealand’s richest men. The main aim of the company is to focus over pleasure and nutritional goodness of natural milk (thea2milkcompany, 2019). The company has concentrated on dairy products by maintaining A2 beta-casein protein. The main products of the company are A2 full cream, A2 milk light, A2 Smart nutrition, A2 milk powder, A2 full cream milk powder, skim milk powder
- Key competition
A2 faces critical competitors in China as there are already existing companies who already have their hold in the market. Several more prominent companies such as Nestle SA are one of the primary competitors of A2 Milk in China. The company has come from by using unofficial as well as unpaid sales agents or daigou in Chinese, which helps in the established distribution network as well as Chinese partners. Nestle has covered the largest market in Chine, which is one of the biggest competition for A2 Milk to expanding business in China. The most significant advantages of Nestle are customers are aware of Nestle products.
- Strength and weakness
A2 Milk Company has the highest control as it provides various products. A2 Company has keen brand awareness as well as market position in China, which was launched in the year 2013. As stated by Tulung et al. (2017), a significant strength of the company is that the Chinese consumer can purchase the products. One of the most significant weaknesses is to develop trust over A2 Milk, as there are already existing brands in China. The premium quality purchase in a supermarket, as well as online of products, helps in delivering of product to customers' end in better ways.
- Organisation’s international operations
The organisation was originated in New Zealand in the year 2000. The organisation has firstly entered in the USA. Hence, from the USA Market, Company has got positive responses. With positive responses, the company has targeted China for expanding its business. In the USA the distribution has exceeded by 13000 stores (thea2milkcompany, 2019). It has been increasing by 118% with their prior, which are needed for driving national distribution within the Kroger supermarket chain. The successful addition is to Vons as well as other Safeway division and also focused over Wal-Mart distribution expansion.
Product and services
- Possible products and services
A2 Milk Company Limited has various products such as A2 milk Light, Skim Milk powder, A2 Milk with no fat, Milk powder with Manuka honey; full cream milk powder, A2 smart nutrition and A2 Milk Full Cream. A2 Milk Company helps to achieve all about 6.4% consumption value share which is within the sizeable infant formula market. It is also needed for expanding the business which is required for managing specific changes that are considered by utilising functioning in better ways. In according to De et al. (2015), the company can be raised by providing products with both online and offline distribution in place to benefit from step-changing investments. It helps in expected for building further brand awareness and trail within Greater China Market.
- Product profitable in the new international market
Today's world is focusing on health-conscious related food. The product is A2 Milk Light which is a natural choice that is preferred for dealing with milk products with low fat as well as full cream products. A2 milk covers all goodness of full cream with fewer fat as well as deliciously creamy, smooth consistency. It is perfect with milkshakes, smoothies, and ingredient in cooking (Hollender, Zapkau & Schwens, 2017). The customers of China are focusing on health-related drinks. The customers will get attracted to new products which are having less fat. Hence, A2 Milk light can be one of the best products for China. Therefore, it will help in generating annual revenue.
International marketing strategies
- Key market success factors
In the global market, certain critical success factors are needed to A2 Milk light to be successful in China. Consumer income level is moderate, which are required for focusing over buying pattern. The income level of consumer helps in dealing with buying pattern as this is induced by trading appropriately. In according to Puthusserry, Khan & Rodgers (2018), the climate is one of crucial factor which helps in consuming milk. The climatic factors which are caused by presenting better milk products that can be easily digested in such a climate. The internet penetration helps in focusing over specific changes that are encouraged, which are considered by making it utilised as well as necessary for increasing sales. Social networking can be one of the best ways for advertising of products which are induced for expansion in a better way (Bašić, Vlajčić & Kiessling, 2016). The product distribution network can be one of the success factors for expanding business in an appropriate means. The distribution of system of A2 Milk light by developing franchising in China.
- Countries concerning crucial market success factors
The company has targeted the USA market, Singapore and Korea. In the year 2015, A2 Milk brand which was launched in the USA. Milk has experienced significant growth, leveraging company's unique as well as premium branding proposition. In the year 2019, the company has focused on the distribution of around 13,100 stores. The annual growth has been increased by 118%, which experienced significant growth, leveraging the company's unique and premium branding proposition (thea2milkcompany, 2019). Besides the success of Vons, Albertson's division and distribution to Walmart expansion as this have been needed for further necessities in better ways. US brand development with progressing, which is necessary for successfully growing category consumption and volume across multiple product segments in better ways (Hernández & Nieto, 2015). It also helps in exploring new market by dealing with upcoming opportunities which are engaged to develop positioning in the market.
- Comparing countries concerning key market success factors
In America Company has expanded business with specific growth, leveraging companies as well as a unique brand proposition in an appropriate way. In the USA the company has been developed by exceeded to 13000 stores in the year 2019. The annual growth has been increased by 118% by gaining national distribution within the Kroger supermarket chain. The new regions are within Costco is dealing with the successful addition of Vons (thea2milkcompany, 2019). In the United States, brand development has been increasing, which is crucial for A2 Milk Company Limited. The brand is also experiencing high customer loyalty has helped in developing the brand in the US. In China A2 milk Company has achieved around 6.4% consumption value share, which is within the sizeable infant formula of the product. In China, infant formula foodstuffs are formed by dealing with planned supply partner Synlait Milk in New Zealand (Anderson & Sutherland, 2015). The business has firm offline as well as online distribution with benefit from step-changing investment which helps in coping with expected for analysing awareness and trail within China market. The products are also induced by exploring milk products in Singapore as well as Korea.
- A country where products are the most attractive market
In China, A2 Milk products are likely to be one of the successes due to its attractive demand which is induced by presenting in dealing with necessities of the market appropriately. The consumption can be raised in China as the online and offline distribution by taking step by step changing marketing investment which is induced by presenting it in a better way.
|Success Criteria ||Importance Weighting ||Country A Score (USA)||Weighted Score|
- Basic characteristics
China is a developing country; hence, its population rate is high. The population of China was 138.64 cores in the year 2017; therefore, this has increased the consumption of milk. In the year 2017, the annual growth rate was 0.6% which helps in increasing the use of A2 milk in China. The price of urbanisation is also high in China as this has lowered the farms, which alternatively depending on packed juice (thea2milkcompany, 2019). Hence, there is an excellent scope for A2 milk for increasing sale of A2 Milk. The availability of natural resources such as machinery, cattle can be high in China, which is beneficial for the company to expand business in China (Jamontaite et al. 2017). The climate of China is one of the crucial factors in developing business in better ways. The climatic condition of China hot and dry during winter; hence, from A2 Milk Light milk varieties of shakes, can be made which will help in relaxing the individual.
- Economic environment
The GDP rate of China is 12.24 lakh crore in the year 2017. Hence, the increasing percentage of GDP helps in developing a scope for developing business in China. The income level per capita is $12,472, which is needed for dealing with median income; hence, the buying pattern of customers;' can be enhanced. It is also required for presenting the particular needs that are induced by analysing the buying pattern of customers' for the expansion of business in China (thea2milkcompany, 2019). In China, educational level is high, which is necessary for dealing with the various functions. The educated people are more health-conscious; hence; this can be needed or increasing the distribution of A2 Milk Light in China. The currency value of China is one dollar to 7.10 Yuan. It shows that A2 Milk Company can get maximum benefit by expanding business in China. The international Trade Regulation under Article 2 is referred to as the import and export of products and services that are needed for international service trade. The contract with New Zealand and China through international Trade Regulation helps in expanding business in China in an appropriate way.
- The political and legal environment
The governance policy toward trade helps in dealing with other contributes, which is beneficial for A2 Milk Company Limited for the launching of A2 Milk light in China. FDI policies help in attracting other countries for expanding business in better ways. As stated by Mat et al. (2016), the investor, as well as consumer confidence is needed for a broader impact on the economy. It is also required for implications for investment, economic growth as well as consumption which are induced for developing business in China. Intellectual property protection in China is high, which is needed for A2 Milk Company as the IP to China helps in transferring business.
- Cultural environment
The social, cultural attitude of people in China is excellent as they respect and treat equally. The equal treatment helps in dealing with the upcoming factors which are engaged for managing system that is induced by presenting the socialisation in China. The religion in China is highly cultured as this is produced by submitting essential religious functions such as Chinese lantern festival, Dragon Boat Festival in which high demand of milk can be one of the best scopes for A2 Milk Company Limited. The customers’ of China are health focus; hence, A2 light Milk is highly recommended for China to deal with the present needs of customers'. In China are Puntonghua, Xiang, Hakka, Minbei and many others (thea2milkcompany, 2019). Hence, it is one of the challenging factor A2 milk Company to understand the need for customers. Therefore, local skilled employees can be hired for resolving this kind of issue as well as it would help in satisfying need of customers.
Market entry strategies
The B2B marketing strategy is considered for analysing the marketing of the product in China. B2B marketing can be beneficial for marketing approaches in China. A2 Milk Company Limited. B2B is always a tricky process; hence; digital tools can adopt this as well as helps in creating digital content which is required for presenting the available of the resources in better ways. As stated by Hohenthal, Johanson& Johanson (2015), the B2B marketing strategy can help a company to deal with awareness, interest, desire and possible actions can be taken for expanding business in China. The B2B marketing strategies help a company to involve dealing with convincing single products of a company which helps in compelling a massive number of customers. The direct export of products to China can help in minimising any kind of issues as well as low number people can get involved in it; hence it would help in managing customers’ choices. The sales transaction amount can be induced by presenting the needs as this helps in providing equivalent by maintaining single sale transactions. In according to Akande & Khadka (2018), B2B marketing helps in an extended period, customers’ services are excellent. It also helps in developing brand loyalty as well as companies are more compared to regular customers as well as the growing relationship among individual. Apart from the benefits, there are certain disadvantages of B2 marketing strategies in China. In B2B marketing, various people are involved; hence; purchasing decision can get changes as well as the time-consuming process also effect on buying capacity of the individual.
The franchising can be chosen for product driven approach. Franchising is another marketing strategy which can be followed by A2 Milk Company Limited. Franchising offers independences of business owners that helps in supporting for developing a more significant business network. As stated by Shen & Puig, (2018), the franchising A2 Milk helps in giving a higher rate of success to the business. Licensing is crucial part of franchising as based on it franchisor can sell the A2 milk light product in China market. It is also necessary to deal with a better management system, which is induced by presenting the needs for securing finance for franchising. Apart from it, there are certain disadvantages of franchising marketing strategies. The franchising means entry to a new market by contracting with the franchisor (Grünig & Morschett, 2017). The lousy performance of franchising of particular product impacts on franchiser’s reputation. Franchising with no agreement cannot succeed; hence, this many effects on expanding of business in China.
It can be concluded that organisation history is needed before expanding the business internationally. It has been analysed that A2 Milk Company limited biggest competitor was Nestle in China. The Chinese consumer focuses on health drinks; hence, milk is one of the essential components for them. It has been observed that A2 Milk has vast product varieties out of it A2 milk light is launched in China. The climatic condition, consumer income level, social networking are key market success factors for international marketing. The essential characteristics, economic factors, political, legal factors and cultural factors are the main components for expanding the business. The company needs to analyse the elements before expanding the business internationally. The B2B and franchising marketing strategies can be beneficial for A2 Milk Company for doing entering in China market.