International Marketing Plan For Capilano Honey In China

Background of Capilano

This report analyzes on the international marketing strategy of Capilano Honey Limited. In the past few decades, the sweet spreads market has undergone remarkable changes owing to remarkable economic, social and environmental conditions. The manufacturers as well as packagers of honey have utilized technological innovation for creating new market niche while strengthening traditional markets by integrating effective marketing schemes (Jarreau and Poncet 2012). The study highlights on the structure of honey industry and export of capilano honey to the target country China. The situational analysis, business environmental analysis, Swot analysis of Capilano Honey is elucidated in this report. The marketing design structure of Capilano, its international marketing objectives and its marketing mix strategies are also discussed in this report.

Capilano is one of the world’s biggest honey enterprise that is located in Australia. This company is the globe’s biggest honey packers and leader for producing honey in the Australian market. Capilano was established in the year 1953 as a beekeeper owned enterprise. It is a manufacturing driven enterprise with the objectives of providing best market for honey manufactured by the shareholders (Capilanohoney.com. 2018). In Australia, this brand mainly holds around 45% market share and sell their products in more than 30 nations. Its export mainly represents 20-30% of the business and trade with around 32 nations. Some of the key products are Classic honey, Beeotic, organic honey, creamed honey. Capilano’s mission is to enhance its shareholder prosperity via leadership in marketing for honey as well as other commodities in overseas markets by attaining excellence in product quality, product innovation and customer service (Capilanohoney.com. 2018).

The target country that is selected for this study is China. The consumers in China are less knowledgeable in the luxury brands with respect to other European customers and hence have tendency to value tangible product aspect larger than other foreign consumers. As China has higher collectivism degree, the Chinese customers are likely to buy the commodity when it is mainly referred by relatives or friends. According to Jarreau and Poncet (2012), China has been considered as the main attraction for exporting the product due to certain other reasons. These reasons are described below-

High economic growth-Recent facts reflect that the economic growth of China has increased over the last few years. The GDP per capita also increased in this nation over the last ten years. Few economists have estimated that the GDP per capita will be around USD 9500 in the year 2020, which signifies that consumption of honey will increase in future.

Different market segments- As per Posner,Williams and Posner (2015), China has different market segmentation. There are middle class people who prefers for high value- added commodities and high income segment that prefers premium products. However, it is expected that high-income customers might pay high amount for differential quality commodities.

Rise in middle class people-In present years, the middle segment of China has increased significantly. This recommends that the search for new opportunities that is arising from consumption which aspires people who are climbing socially.

About Target Country

Rise in online purchase- For the past few years, the online sales has increased significantly and individuals are increasing accustomed for using internet to attain products. This trends generally opens door for product offerings over internet. In this context, as there are huge export opportunities in Chinese market, it will increase the sell of capilano’s honey.

China is the sovereign state and most populous nation across the globe. It is governed by communist party of this nation and exercises over 22 provinces. There are near around 1.25 billion population in this nation. Different types of religion exists in this nation such as Buddhism, Muslim, Cristian. The population of China is unevenly distributed with heavily and west scarcely population.

At present, the Chinese culture is integration of old tradition as well as westernized lifestyle. The culture of this nation has diversity as well as variety. The language and philosophy of China are still has strong influence over the Chinese people. The different types of religion also provides impression on China’s culture as well as tradition.

The situational analysis of Capilano Honey Limited has been done with the help of PEST analysis. This analysis refers to the strategic tool that helps to assess macro environment of an enterprise, which affect the macro environment of Capilano Honey. As per Ho,J (2014), changes in macro environmental factors might have direct effect on Capilano Honey as well as other players in Food and Beverage industry. The PESTEL analysis gives proper detail about Capilano’s operating challenges, which they might face in macro environment of China.

• Political factors-These factors are those that affect this company’s long term profitability in specific nation or market. This nation has stable political environment but lacks political freedom. China has positioned itself as better destination for FDI (foreign direct investment). China has attracted US$139 billion of FDI during the year 2016, thereby making it third biggest destinations. China do not have any kind of legal issues also, which in turn influences Capilano to export honey to this nation (Posner, Williams and Posner 2015).
• Economic factors-China experiences increase in GDP growth rate over the last five years. Thus, GDP rate reflects that every citizen of this nation has been adding values to the society, which in turn enhances consumer’s purchasing power. Additionally, China’s labor cost is very low and thus the enterprise hires more laborers from this nation. Moreover, high inequality, environmental damages are few challenges, which the nation requires for maintaining economic sustainability.
• Social factors- Hong (2013) opines that the culture of society affects the enterprise culture in a specific environment. Based on Hofstede dimensions, China has collectivist culture (Hong 2013). In fact, China’s literacy rate is around 90% as the nation emphasizes more on education. Chinese people often opt for online shopping as there is accessibility of internet.
• Technological factors-Recent data reflects that China has world’s biggest online population with around 772 million users. For achieving this, China has launched mass entrepreneurship as well as innovation program, which aims to facilitate the nation to shift from labor- intensive to innovation- driven one. Thus, ndw distribution mechanisms and new working methods such as mobile telecommunications will benefit Capilano by enhancing their product sale in China.
• Environmental factors-Various market have various norms that affect the enterprise profitability in those marketplace. Rapid economic development in China has affected its environment severely. As there are some environmental challenges that China faces today such as – water pollution, deforestation, the Chinese government has taken numerous initiatives for addressing environmental concerns. Therefore, Capilano can ensure that China’s climatic conditions will not affect their export of honey.
• Legal factors-The legal framework in few nations are not strong enough for protecting intellectual property rights of the enterprise. There are no regulations in China supporting privacy, consumer rights and electronic contracts.

According to recent China statistics, the total volume of imported honey in this nation has been growing over the last few years. Piercy (2014) found out that Australia and New Zealand honey are the major driving force behind export of honey to China surge. The potential consumers of Capilano honey in Chinese market are senior and health – conscious consumers (Strayer, Everstine and Kennedy 2014). Since Capilano honey is in mature stage of the product life cycle stage, it target new segments and develop new uses as well as new packaging forms (WEI, HUANG and Jun 2012).

Capilano has market share of about 6.1% to 7.1% in the Australian market. Capilano has good position in the market. They expands support for their distributors in every market and alosfpcuses on exporting the product to other markets along with Chinese market. Moreover, sales of Capilano’s product has increased by about 39% in the fiscal year 2017. Furthermore, as distribution cost and the share of retail margin of this company is high.

Capilano aims to invest in market research and innovation capability, which in turn permits them to appeal in a better way in Chinese market. This enterprise has launched national campaign through agency for promoting and exporting honey in Chinese market (B&T. 2018). Capilano has established new marketing as well as innovation team that aimed in creating value for existing goods offering and also to bring about new innovations for marketing honey in China. This enterprise has also invested in data sets of honey category and gains customer’s insights for providing commercially validated structure to support innovation as well as marketing pursuits (Morgan, Katsikeas and Vorhies 2012).

Situation Analysis or Business Environmental Analysis (PESTEL)

It is assumed that Capilano Honey will face less competition in the Chinese honey market. Increasing European demand for honey as well as insufficient supplies mainly puts exporters from the developing nations in favorable position (Leonidou et al. 2013).  There are near around 6 competitors in the Chinese honey market, which includes-Manuka Health, Dick Smith Foods, Comvita, Pureharvest are some of the top competitors. Among these companies, Capilano is the market leader and followers are Manuka, pureharvest, Comvita and so on. With continuous improvement of Chinese people living standard and unceasing health consciousness, honey has become widely accepted to people. According to last ten years growth rate of honey products and its export growth, it is predicted that yearly per capita honey consumption will increase to double.

International marketing for Capilano honey has been done in order to increase sales and maximize profit. By exporting the honey products to China, Capilano expand its business by understanding China’s customers and analyze market trends.  By diversifying their product range, the percentage of selling products grew by around 97% to $5.05m over the last six months. The long term objectives of Capilano moving for international marketing  are-

• To build good relationship with China for trading purpose so that it leads to free trade between these two nations
• To facilitate social as well as cultural exchange between Australia and China
• To assure optimum resource utilization at the global level

The short term objectives of Capilano are-

• To attract large number of customers
• To increase profitability level in the business

Recommended marketing strategy

• Capilano should take the feedback from the Chinese customers and make changes on the product accordingly.
• Capilano should assess the market size for capturing large amount of market share in China
• Capilano should also invest huge amount in online advertisement for promoting its products in China

Product- Capilano will target China to export its products and increase its honey sales each year with its premium products that include- Beeotic, manuka honey and so on (Londhe 2014).

Price-Capilano will increase its product price before exporting it to China owing to rising demand of honey consumption in Chinese market. This will help  Capilano to maximize profitability from the Chinese market (Chaffey and Ellis-Chadwick 2012).

Place-As Capilano is exporting honey to China as priority market, they will try to concentrate on particular regions rather than whole nation while exporting its premium honey products.

Promotion- Capilano will make effective campaign for educating the Chinese consumers regarding benefit of using its premium honey products  (Huotari and Hamari 2012)

Conclusion

From the above discussion, it can be concluded that Capilano will achieve success in exporting honey to China as there is huge demand for honey in the Chinese market. Capilano must also take short term target for reaching maximum customers in China. This will help them to provide higher scope of business growth as well as develop its products in China and other nations. Diversifications in its products will also help Capilano to attract large number of customers in the Chinese market. Thus, these marketing strategies will help Capilano to attain positive outcome in exporting its products in the long- run.

References

B&T. 2018. Capilano Honey Launches National Campaign. [online] Available at: https://www.bandt.com.au/advertising/capilano-launches-new-national-campaign [Accessed 17 Aug. 2018].

Capilanohoney.com. 2018. Australia’s Favourite Honey | Capilano Honey. [online] Available at: https://www.capilanohoney.com/au-en [Accessed 17 Aug. 2018].

Capilanohoney.com. 2018. Our Heritage | Capilano Honey. [online] Available at: https://www.capilanohoney.com/au-en/hive-to-home/our-heritage [Accessed 17 Aug. 2018].

Chaffey, D. and Ellis-Chadwick, F., 2012. Digital marketing: strategy, implementation and practice (Vol. 5). Harlow: Pearson.

Erdo?mu?, ?.E. and Cicek, M., 2012. The impact of social media marketing on brand loyalty. Procedia-Social and Behavioral Sciences, 58, pp.1353-1360.

Fern Fort University. 2018. Capilano Honey Limited [SWOT Analysis] Weighted SWOT Matrix. [online] Available at: https://fernfortuniversity.com/term-papers/swot/nyse/4830-capilano-honey-limited.php [Accessed 17 Aug. 2018].

Ho, J.K.K., 2014. Formulation of a systemic PEST analysis for strategic analysis. European academic research, 2(5), pp.6478-6492.

Hong, Y.Y., 2013. A dynamic constructivist approach to culture: Moving from describing culture to explaining culture. In Understanding Culture (pp. 18-38). Psychology Press.

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Jarreau, J. and Poncet, S., 2012. Export sophistication and economic growth: Evidence from China. Journal of development Economics, 97(2), pp.281-292.

Leonidou, L.C., Katsikeas, C.S., Fotiadis, T.A. and Christodoulides, P., 2013. Antecedents and consequences of an eco-friendly export marketing strategy: The moderating role of foreign public concern and competitive intensity. Journal of International Marketing, 21(3), pp.22-46.

Londhe, B.R., 2014. Marketing mix for next generation marketing. Procedia Economics and Finance, 11, pp.335-340.

Morgan, N.A., Katsikeas, C.S. and Vorhies, D.W., 2012. Export marketing strategy implementation, export marketing capabilities, and export venture performance. Journal of the Academy of Marketing Science, 40(2), pp.271-289.

Pangarkar, N. and Wu, J., 2012. Industry globalization and the performance of emerging market firms: Evidence from China. International Business Review, 21(2), pp.196-209.

Piercy, N., 2014. Export Strategy: Markets and Competition (RLE Marketing). Routledge.

Posner, H., Williams, S. and Posner, H., 2015. Marketing fashion: strategy, branding and promotion. Laurence King Publishing.

Strayer, S.E., Everstine, K. and Kennedy, S., 2014. Economically motivated adulteration of honey: Quality control vulnerabilities in the international honey market. Food Protection Trends, 34(1), pp.8-14.

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WEI, G.X., HUANG, J.K. and Jun, Y., 2012. Honey safety standards and its impacts on China’s honey export. Journal of Integrative Agriculture, 11(4), pp.684-693.

Zeriti, A., Robson, M.J., Spyropoulou, S. and Leonidou, C.N., 2014. Sustainable export marketing strategy fit and performance. Journal of International Marketing, 22(4), pp.44-66.

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