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International Marketing Analysis: A2 Milk Company Limited Assignment Answer

Business Administration Programme

Individual Assignment

INTERNATIONAL MARKET ANALYSIS AND ENTRY STRATEGY

This is an INDIVIDUAL ASSIGNMENT for a product/service to be launched in a foreign country market. You are required to choose a real organisation and a product or service from any home country, and a foreign target country.

The objective is to provide a student with the opportunity to apply the key concepts of international marketing to a real-world marketing challenge. This assignment emphasizes the need to understand the global environments as an essential first step in preparing a strategic international marketing plan.

Report Outline: Your report must contain the following:

Title page

Executive Summary: Provide a summary of the key points of your report. (1 page) Please make certain to include a summary of the following:

  1. Organisation and product/service;
  2. Key market characteristics needed for the product/service to be successful; and suggested target market; its basic characteristics and market entry strategy.
  3. Organisation: Choose an organisation that you will be writing the report for. It can be any existing organisation, big or small. Ideally, it should be an organisation that may eventually be interested in pursuing your international business proposal. You don’t have to inform the organisation about your project, but if you have a way to contact the organisation, feel free to do so.
    1. Describe the organisation, provide a short overview of its history, products/services;
    2. Key competitors, and their competitive strength and weaknesses;
    3. Strengths and weaknesses of your firm; and
    4. Organisation’s international operations, such as where the organisation was founded, first foreign markets entered and current international presence (if applicable).

Product/Service:


    1. Describe three or four possible products/services that have potential to bring extra profits for your client’s International market.
    2. Select ONE product/service that can be profitable in a new international market.

Please note: It is important to provide rationale for selecting this product or service based on the composition and direction of export information of your home countryRemember: Your sources cited in the report should be from academic sources (e.g., journal articles, and textbooks) and from other business sources (e.g., website).

International Market Opportunity Analysis:

  1. Identify three or more key market success factors that are necessary in order for the proposed product/service to be successful (e.g., consumer income level, political stability, climate, availability of natural resources, Internet penetration, product distribution network, etc.).
  2. Identify three countries that are likely to meet the identified success criteria.
  3. Compare the three countries with respect to the key market success factors.
  4. Select one country where the product/service is likely to be the most attractive market.

Please note: It is important to use the following template:

  1. Give importance weighting to each success criterion totalling to 100% (1.0).
  2. Give score to each country for every success criterion on a scale of 1 to 10.
  3. Multiple the score with the weighting to get the weighted score.
  4. Select the country with the overall highest weighted score.
Success Criteria
(1)
Importance Weighting
(2)
Country A
score
(3)
Weighted score (1x2)
(4)
Country B
score
(5)
Weighted score (1x4)
(6)
Country C
score
(7)
Weighted score (1x6)
1.







2.







3.







4.







5.







Total
(100%) 1.0






Market Description: For the selected country; identified as the most promising market, provide the following information.

  1. Basic characteristics: Trends in population, area, urbanisation rate, climate, natural resources and other relevant basic characteristics of the market.
  2. Economic Environment: Trends in economic development, including GDP/capita, and GDP growth rate, income level and distribution, size of labour force, education level of labour force, labour cost; major sectors of the economy, imports and exports, major trading partners and international trade regulations; inflation and currency exchange rates, ease of doing business, other relevant economic characteristics.
  3. Political and Legal Environment, Government: Political and legal systems, political risks, government policy toward trade and foreign direct investment, property rights and intellectual property protection, membership in regional political and trading blocks, corruption, freedom and other relevant indicators.
  4. Cultural Environment: Culture, predominant religion(s), language(s), social class structure, values and attitudes, customer preferences and tastes in the market, other relevant cultural characteristics

Market Entry Strategy:

Based on the above (Section 6) analyses, evaluate any two strategic market entry approaches/options from below to select the recommended Market Entry Strategy:

  1. Evaluate possibilities and advantages and disadvantages of product driven approach by your firm in the chosen target country; OR
  2. Evaluate possibilities and advantages and disadvantages of marketing driven approach by your firm in the chosen target country; OR
  3. Evaluate possibilities and advantages and disadvantages of technology driven approach by your firm in the chosen target country; OR
  4. Evaluate possibilities and advantages and disadvantages of investment driven approach by your firm in the chosen target country.
  5. Then select the most suitable market entry strategy (e.g., Direct exports, licensing, branch office, joint venture with a local company, management contract, wholly-owned subsidiary, etc.). If you think the product/service should be developed and/or distributed in a partnership with another company, provide additional details on how the partnership should be set up including country regulatory requirements such as local content laws, equity participation and other relevant points

Report Formatting

You must produce and submit the report that addresses all sections (1-7) listed above. IMPORTANT: Your report should strictly follow the structure; headings and sub-headings in each section.

Please format your report according to the following: Number all pages in your report.

Margins should be 2.5cm (one inch) at the top, bottom, and sides of the page. Font type should be 12-point Times New Roman throughout the report.

Double-space all body text.

Indent the first line of a new paragraph. The text should be left-aligned.

Each and every use of other people’s ideas/words must have an in-text citation which, should include only the name of the author(s) and the date of the publication and clearly shown which material it relates to. Full references (author, year, title of the publication, volume, issue, page numbers, publisher; for website sources, use proper referencing for website addresses and include date of access – see APA (G) style.) should be provided at the end of the report. APA reference style is required.

Wikipedia is an excellent resource to begin your research, but it is not an appropriate source to cite in your report. Instead, you must find the source behind the Wikipedia entry and verify its accuracy.

Appendices, references: It is strongly recommended that all tables, graphs and other information be incorporated directly into the body of the report with citation. However, if needed, you may have appendixes at the end of the report. This final section should also contain references to the sources cited in the report.

Word limit: 2500

Answer

INTERNATIONAL MARKET ANALYSIS AND ENTRY STRATEGY

Executive summary

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. 

Introduction 

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 

  • 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
Country B
(China)
Weighted Score
Country C 
(Singapore)
Weighted Score
  1. Advertising 

55
6
6
7
7
6
4
  1. Franchising 

25
3
5
7
6
5
3
  1. Supply Chain distributor

20
2
7
8
8
7
5
Total 
100

3.24

4.12

1.44


Market description 

  • 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.

Conclusion 

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.

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