International Marketing Plan For Aythaya Wine: Exporting To China

Aythaya Wine: Product Overview

Nowadays the market is growing and is establishing globally. Almost all the countries are opening for the international trade. Each and every brand want the establishment of its business. So for expanding the business, exporting of the product is done, which is called globalizing the product or globalization. This international trade has allowed the customer to have a variety of products and to buy these products at reasonable prices. Also, they can buy a better quality product.

In this report the international marketing plan for a wine brand Aythaya Wine is discussed. The product is exporting to China from Myanmar. The internal analysis of Myanmar and external environment analysis of China is discussed in this report. The external environmental analysis is comprised of STEEPLE and internal environment SWOT analysis is discussed. It is also discussed that what is the need of doing international business.

Aythaya Wine products are made in Myanmar. The vineyard is located in the town Aythaya. The business was started in 1998 when a German man named “Bert Morsbach” bought the first wine plant from Europe to Myanmar. Aythaya Wine was the first wine brought to Myanmar. It has several varieties.

International Business is done as the strategy of expanding the business and making a global product. But before exporting, the marketing strategies are plans should be taken into consideration. The market study must be done prior to the export regarding the consumption, market share and profits. Also, contingency plans should be made if the business is under loss.

Aythaya Vineyard is located in the town Aythaya. The vineyard has blue mountains around it that belongs to Shah Plateau. “Bert Morsbach” brought the first wine from Europe to Myanmar in 1998. It was the first wine brought in Myanmar. They relocated the wine plants to Aythaya. Aythaya wine was founded in 1999. The varieties included Chardonnay, Chenin Blanc, Sauvignon Blanc, Muscat, Cabernet Sauvignon, white wine, rose wine and Syrah. Aythaya wine is producing premium wine every year and adding new varieties to its stock. The slogan of the brand is “A better wine every year” and the brand is doing the same (Jordan, 2015). Aythaya vine is making good profits in Myanmar. But, to establish the business and make more profit the export of the product is necessary. So, for export purposes the various considerations are more wine consumers, less import taxes and a big market.

Why Do International Business?

                                         

These are the five wine products of Aythaya. Sauvignon Blanc Late harvest, Aythaya White Wine, Aythaya Red Wine, Aythaya Rose’ Wine, Aythaya Dessert White respectively in the figure.

It is a strew yellow colored wine with 14% or alcohol by volume. This wine is delighted with rich aromas of gooseberries, grapefruit, banana, and pineapple. It is made up of fully ripened grapes with mellow fructose and elegant acid structure. All of this combination makes it a very powerful wine with a burst of nice taste in it. This wine flavor come up with the meals like curries of mutton and chicken and all kinds of sea foods. This wine also tastes good with Asian dishes and pastas and vegetables (Kaus Group, 2015).

It is a yellow color wine with green reflexes. This wine is made up of gooseberries, grapefruit and green apple. It is also a combination of mellow fructose and an elegant acid structure. It gives a pleasant taste after consumption. This wine tastes good with curries of chicken and pork. It also tastes good with sweet and sour Asian dishes, pastas and vegetables.

It is a dark ruby color wine. It is made up of aromas of wood, dried plums and cherries. Soft tannin and descent background acidity is also combined with it. It gives a balanced taste of all ingredients. It tastes good with all kinds of red meat and barbeque dishes. It also tastes good with mushrooms and all kinds of cheese.

It is a salmon color wine. It has a shiraz flavor combined with fresh roses and fruits. A tinch of tannin with mellow fructose gives it a long lasting aftertaste. It tastes good with spicy Asian dishes. It is also good with white meat and all kinds of pastas.

It is a ruby color wine. It is made of honey, muscat and dried wild berries. It also has residual sugar and descent acid. Due to the honey, cherry, peach, chocolate and tropical fruits, its flavors are long lasting in the mouth. It tastes good with desserts. It also tastes great with sweet and sour Asian dishes. At the end of the meal, it tastes good.

There are four levels of the wine.These are namely core, generic, expected and potential product.

Core Benefit: It gives the pleasure to the drinker.

Myanmar Analysis

Generic Product: Juice of green grapes.

Expected Product: With different flavors, lovely fragrance and added alcoholic content.

Potential Product: True color of wine that is green with 39% of alcohol.

Competition makes the external environment an important feature to analyze. For gaining competitive advantage it is important to analyze what the customer wants. Customer requirements are must for the company. Due to the dynamic behavior of external environment, it is important to gain competitive advantage. The organization should maintain the market share and always try to satisfy the customer.

STEEPLE approach helps to analyze the external environment conditions and future of the brand in a particular country which looks at Social, Technological, Economic, Environment, Political, Legal and  Educational factors that affect an organization. As China is a quickly growing country and is trying to make business in every field. They are trying to serve people by providing them reasonable products. STEEPLE analysis will help in analyzing the market for the Aythalaya wine.

Political factors are very important for a company to grow. The political changes directly affect the growth of a company. China has a great policy for the investors and supports the investors by flourishing the business. There are also tax agreements with various countries which help companies to import the product easily. So By exporting Aythaya wine to China will be beneficial for the organization

Economical factors affect any organization, but has less effect on big companies. The economy of China is growing day by day so per capita income of the people is also growing. Therefore, if the income of the people is growing they starts using their money for luxuries. So, in this way China is an important market for Aythaya company to invest (Hupert, 2014).

Social relations are very important in modern corporations. Increasing the value of education and family income has lead to people to buy the luxurious  products. But also, the labor cost of China is low so it is an advantage to the importers in China.

Legal factors play an important role in maintaining the product quality and selling it at a reasonable price. China has maintained the laws strongly and no one can increase the price of the product easily. Therefore, due to this Aythaya wine group has to face a lot of competition has for the successful business there, they have to gain competitive advantage over the other competitors (Rizvi, 2013).

China Analysis using STEEPLE

Technology gives the company to explore the products in different ways Also the product selling and new purchase technology adds benefits of the products. But, China does not have a safe online transaction facility. Therefore transferring funds by the internet is not at all safe in China, which is a big drawback there. Therefore, the Aythaya wine group has to face the same problem in China

Environmental issues have taken great importance in China nowadays. The environment friendly technology is used and the country is avoiding the organizations that are not supporting environmental friendly technology. So in this case Aythaya has not to worry as it uses the organic way to produce the wine and it does not harm the environment as such (Team, 2016).

This factor involves what is good for a company. It gives us analysis of what can be done so that the reputation of the company will be maintained and what cannot be done that will spoil the reputation of the company. It thoroughly represents the behavior and integrity of the company.

The politics of the country are affected by the army of the country. Therefore, there is not so much political interference.

The country’s economy is not very strong. The people rely on agricultural products for their survival. Therefore, agriculture is strong in Myanmar. So Aythaya wine gets support due to the agricultural background.

Due to the army regime, the people live isolately in the country due to isolation policy. The Aythaya wine is successful due to their culture of having wine with the food and curries (Polastri & Pawlita, 2013).

After 2010, the country started opening up, but the technology is not much updated in the country. Now many countries have started investing in the country and are investing there. So, technology is coming up and communication technology is improving.

The environment is clean due to less industries, but it is facing deforestation. But, for the Aythaya wine group the environmental factors are favorable. The plantation is easy due to the environment (Le, 2013).

New government there is trying to maintain policies and laws. But before there were no laws due to military regimes and no policies were followed.

There are a variety of external factors that describe the strength of the forces impacting Aythya wine. Porter’s five forces analysis of Aythya is studied below.  Michael E Porter developed this analysis in 1980. This analysis help in determining the competition level and competitors power in the market. Therefore, the forces are as follows:

• Bargaining power of supplier (Weak force)
• Bargaining power of buyers (Moderate force)
• Competition rivalry level (Strong force)
• Threat due to substitutes (Moderate force)
• Threat due to new entrants (Weak force)

Product Analysis

The Bargaining power of suppliers is low as due to favorable climate conditions and over supply of grapes made the suppliers power very low in case of Aythaya wines.

Business is directly influenced by the customers. So, with the help of this element, it is observed that customers are important for any organization. Also, their preferences are important for the organization. Therefore, these are factors that contribute to the bargaining power of the customers. The moderate availability of substitutes give customers another option. But, due to the low price and good quality Aythaya gains a competitive advantage. Therefore, these are the external factors which determine the moderate bargaining power of the customers (Boulevard, 2016).

This element helps us to analyze that how the competition affects the organization. Due to the  tough competition in the market for taking the shares of others as saturation penetrates. Aythaya should gain market shares in the China to get good profit.

Substitutes pose a threat to the Aythaya (Team, 2015). This element identifies the force of substitution in the global market. The substitutes are not available in plenty therefore the threat is moderate.

The threat from new entrants is considered to be moderate. While starting a new business the investment done is not very large and not in the large scale. As Aythay being a new entrant in China’s market, therefore a large investment is needed and it should occupy a good market share so as to gain profit in the country.

As China is a growing economy and The consumption of wine in the country is good. The culture of wine with dine is there in China. Also, due to the  good per capita income of the China’s population, they are ready to spend on luxuries and food items. Due to the busy schedule of China’s person they love to dine outside their home and this will also help in increasing the market share. Also the country is the neighbor of Myanmar (Beiswenger, 2016). So, the transportation charges are less. And China has the highest population in the world. So, the consumption is also more.

With the help of this analysis the internal environment of the organization is scanned.The communication between the manager and the employees is taken into the consideration when internal environment is concerned.  With the help of internal environment analysis the competencies and effectiveness of the organization are analyzed. The goals of the company are also discussed between the employees and the management.

Competition Analysis

SWOT analysis gives the deep analysis of strength, weakness, opportunity and threats of the company.

Strength: Strength of the Aythaya wine group is the reasonable price and good quality wine. Also, different varieties of wine make it unique.

Weakness: Wine culture is not so popular in some areas and also brand power is a weakness.

Opportunity: Due to the variety of wines it will get a good market in China. And the culture of wine, these will help company to grow.

Threats: Large number of brands which will be as competitors are threats to Aythaya wines.

Wine yards will be developed in China.And the supply is given from theses yards to the China market. By developing these yards the locals will get employment as well as the area will also develop. The Aythaya will also earn profits because of the low cost of labor (Veseth, 2011).

Targeted market: Northern and northeastern China

Segmentation: Based on the population density

According to the China, the Northern and northeastern parts of China has more consumption of wine than the rest of the parts. Also the area is populated. In the initial stage the Aythaya wine starts its operation in some of the most populated cities in this part like Beijing (International Markets Bureau, 2013).

Consumption of dessert wine and red wine is most in this area. Also the white wine and Rose wine are consumed along with pastas in this area. China consumes more pastas in their food which matches the wine flavor with it.

There are 4 P’s in the market that are product, pricing, promotion and place. These all are chosen with a special reference so as to company to grow and earn profits.

Product: the consumption of wine is increasing in the country due to the increasing population of youth in China, who are the main consumers of wine. So demand will rise if product quality and prices are maintained initially.

Price: Prices should be low due to the competition from different brands. Low pricing can be used as a competitive advantage to gain market share.

Promotion: Promotion of the product is very necessary, through the newspaper, social media advertising and journals. Although the cost of advertisement in newspaper and journals is high, but it should be done so as to make the product popular (Sumegi & Istvan, 2011).

Place: Firstly the product is  in the northern parts of the country. Then the availability of the product will be in all the retailers in the store.

Conclusion

New strategies should be implemented after some time say 3 years. As the market level grow into saturation, after three years of when a product is introduced. So to make new profits and gains the product should be launched into new markets. This will help in making a good profit. Once the Ayathaya will accomplish its goals in Northern part it should expand its market to other parts of China (Karhunen & Kunc, 2016). Also the new and modified flavors should be introduced to capture the market share. Ayathaya should work on introducing more flavors in the market as per the liking of the customers.

If the Aythaya wine group failed to expand its business in China than there are alternatives of maintain the stores in the China as due to the low cost of labor there as a result of high population. The stores can be set out there and the wine can be transported to nearby countries. Also, fresh juices can be made from the fresh fruits instead of wine so as to give back up to the company.

Conclusion

Due to the social changes in the country and the size of the wine market in China, there will be around 400-500 million consumers of wine till 2020. Therefore,  it means that the market will grow from nowadays to a bit exciting numbers. Therefore, the chances of the growth of the company will be higher. Also. The labor cost is low and climate conditions are suitable for the grape and berry growth the production cost is low. Low production cost compared to other countries also makes a benefit for the Aythaya. This will help the company to make the price of wine to be low. Low price will gain a competitive advantage over the competitors.

Also, the Aythaya has done STEEPLE as well as SWOT analysis so as to make it sure to expand the business in China. These analyses help in finding the threats and the advantage to expand the business. Therefore, by doing this Aythaya will be  able to achieve its goals and earn profits in China.

References

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International Markets Bureau, 2013. Consumer Trends: Wine, Beer and Spirits in China: Government of Canada, Available at: https://www.gov.mb.ca/agriculture/market-prices-and-statistics/trade-statistics/pubs/china_alcohol_en.pdf

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