International Marketing Plan Of Chatime In France

Overview of Chatime

International marketing refers to worldwide scale of reconciling the global operational differences, opportunities and similarities to meet the multinational objectives (Czinkota and Ronkainen, 2013; Terpstra et al., 2012; Keegan and Green, 2015). It includes the application of marketing principles which depends on the expansion of local strategies. Further, this can be done with the help of the focus on the market identification, segmentation, targeting along with international decisions. In this context, the current report is based on the expansion plan of the Chatime; a Taiwan based company in the France with special reference to tea series. For this purpose, cultural environment of the country has been analyzed and a complete marketing plan has been prepared. Apart from this, competitors have been identified and strategic recommendations have also been provided to achieve the purpose of the study. At the end, several authentic references have been used such as journals, books and web sources.

Overview of the company

Chatime is a Taiwanese global franchise tea house which is based on the generous products such as bubble tea, fruit tea series, refreshing juice, smoothies and coffee etc. (Chatime, 2018). The company is specially dealing in the variety of tea series such as hazelnut milk tea, strawberry Au lait, Pudding, butterfly pea with grapefruit juice etc. On the other hand, bubble tea, tea and flavored tea are the special products of the Chatime café (Chatime, 2018). Further, the company has adopted growth and expansion model through franchising at world wide level. it has 1000 number of locations of tea stores in 80 countries (Chatime, 2018). It has been globally operated the business-like United States and California and it has been expanded business in various countries involving Malaysia, China, Korea, Canada, Indonesia, Philippines, Australia, UK, India and New Zealand etc. The company has unique concept to offer tea a healthier, refreshing as well as joyable alternative with coffee.

Nature of the product

Chatime offers the wide variety of products and use the less sugar in every product which is healthy and fruitful for the body as per the texture. The company has unique concept to offer tea a healthier, refreshing as well as joyable alternative with coffee (Chatime, 2018). Further, it also uses all-natural product for the preparation of the final product such as tea. In this regard, it prefers the natural tea leaves for the development of new product range. At this juncture, the current environment of consumers is demanding for the hygiene products due to health consciousness. On the other hand, Chatime products are available with the variety of toppings like pearls and mixture of QQ jelly, aloe vera, coconut jelly and red beans. Apart from this, the café has unique identity of its brand over the products because some of the items are available only in fewer countries. Further, Chatime also deals in the variety of drinks in which it offers the ice level as per the requirement of customers (Foodgressing, 2018). Hence, it reflects that products which are provided by the Chatime are healthy and offer the ingredients as per the demand of the consumers because they have trust on the hygienic nature of the products. 

France Market Analysis

Environmental justification for country

France is a European country and has been selected for the expansion of products of Chatime café. The country would enter into French market with new product of tea with wide variety of series. The country is surrounded by the various external factors such as political, social and cultural, economical etc. which affects the business environment of the companies. In this regard, France has been selected by Chatime café for the expansion of tea products on the basis of following factors.

• Environmental factors- These factors have great impact on the new entrance business entities because the commencement and growth of a company is based on the environmental factors. The climatic conditions of France are better because it has mild summers as well as cool winter seasons (Commisceo Global Consultancy Ltd, 2017). In this context, it would be beneficial for the Chatime café to establish the store in France because cold environment always demands for a hot tea. Coffee whereas hot environmental conditions increases the demand for cold and iced tea. Moreover, the respective café is offering both type of tea such as cold and hot as per the requirements of consumers.
• Economic factors- As per the analysis, it has been found that France has 7^thlargest economic power of the world and it is covering the economic crisis on a huge rate in comparison to another European countries. Further, better weather conditions, high GDP growth rate and less tax rates on business and flexibility in availability of workforce are helpful to achieve the set targets in the economy of France (Banco Santander, 2018). At this juncture, the selection of France country for the Chatime café is fruitful to expand the business because the organization has to pay fewer amount for taxation, labor would be available easily etc.
• Cultural factors- Cultural environment of the France is a rigid in nature because it has low possibility to avoid the risk and uncertainty which has great effects on the business in France (Global alliance of SME’s, 2016). But after the 2^ndworld war, has taken initiatives to invite the market investors for the business because it has wide variety of supplying industrial, farming and agricultural products. In this regard, it can be beneficial for the Chatime café to enter into France market because there would be easy availability of raw material for the coffee and tea. Moreover, the company would be able to deliver the series of tea at cost-effective price.

Major competitors

Chatime is a beverage company which deals in variety of tea in all over the world. The main attraction for customers is bubble tea but there is huge number of competitors of bubble tea. For example, Chatime has outlet in Malaysia and got success in Taiwan style bubble tea; however, there are many plenty of other tea outlets such as Orchado, share tea, Ding tea and Gongcha has already exist in the Malaysia market (Hor, 2017). Apart from this, there are other strong competitors of Chatime in world such as Peets Coffee, Dunkin brands, Starbucks, Kodiak coffee etc. On the other hand, McDonalds, Ritual coffee roasters and Philz coffee etc. are strong competitors for the Chatime in the beverage industry. Further, main competitors of Chatime are Jenjon’s café, Pho Saigon Bay restaurant and Quicklyusa which has huge market share in the entire beverage market (Owler, Inc., 2018).

Competitor’s analysis

With the help of Porter’s five forces analysis, competitive factors and competitors of the beverage industry can be analyzed. It can be beneficial for the Chatime because the company come to know about several external factors for the business which may affects in France.

 

Figure 1: Porter’s five forces analysis

(Sources: Rothaermel, 2015)

According to Porters model, it can be easy for Chatime to know about bargaining power of buyers and suppliers, threat of new entry and substitute products in the entire market place.

• Threat of new entry- Chatime is a beverages company which is specially deals in the variety of tea with the uniqueness in bubble tea even there are several competitors for Chatime in respective industry. There is a threat of new entrance is high due to large number of competitors such as Pho Saigon Bay restaurant, Jenjon’s café and Quicklyusa etc. Further, it can be dangerous for Chatime to deal with competitors in France if they offer cost-effective prices for the coffee and can grab the entire consumer market of beverages. Hence, it turns to negative impacts on the profitability of Chatime because market of France is big in size which increases the chances of new entrants.
• Threat of substitute- By considering the huge number of competitors in beverage industry, there is threat of substitute products is high in France market for the Chatime’s Tea. For example, tea and coffee are substitute products for each other. In this context, if Chatime enters into France market with high cost of tea then customers would not attract to Chatime’s tea and remains stick to existing brands of tea. Even the customers have a right to shift from tea to coffee, if coffee is available at low price than tea by competitors. Thus, it reflects that there is higher rate of threat of substitute products in France for Chatime by keeping in mind the several competitors.
• Bargaining power of buyers and suppliers- The buyer’s power in France market is very high due to large number of customers in the market and availability of many competitors. The consumers can bargain for the products by considering the competitors tea series due to price sensitivity as well as differences between competitors. Besides of these, Chatime is offering the low price and quality products of tea by involving white pearls which is the plus point for the company to deal with competitors. On the other hand, there is huge availability of suppliers for raw material of tea in France because material is easily available so bargaining power of suppliers is low. There is possibility to shift the Cahtime from one supplier to another if they supply the products at higher price.

Supportive evidence for growth 

On the basis of analysis of statistical data of France, it has been found that organic food and beverage industry is getting success and higher rate of growth in France market. In this context, the market share would be enhanced to 9.49 billion $ by 2022 (Business wires, 2017) The people are shifting from chemical drinks to organic beverages due to health conscious and enhanced awareness towards products which in turns to preferences, change in customer’s taste for organic products. Hence, Chatime can possess a competitive position in beverage industry in next 5 years in terms of growth.  

Competitive Analysis

France is a developed country in all over the world along with large economies of scale. The business culture of France is effective in nature because it is focusing on to continue with the development of European union (King, 2012). In this context, cultural analysis can be done on the basis of Hofstede cultural dimension model which depends on the 6 major dimensions such as power distance, individualism-collectivism, masculinity-feminist, uncertainty avoidance, indulgence and long-term orientation (Nakata, 2009; Migliore, 2011).

 

Figure 2: Comparison of France and Taiwan by Hofstede cultural model

(Source: Hofstede insights, 2018)

Chatime is entering into France from Taiwan for the expansion of the business as per the cultural environment. According to Hofstede cultural model, it has been analyzed that the power distance of the France is higher than Taiwan. The culture of France is based on the western culture whereas Taiwan related to eastern culture. The western culture has major emphasis on the distribution of rights as well as powers to the people to enhance the confidence level (Hofstede insights, 2018). In this context, it would be beneficial for Chatime to operate business in France because the company would be able to delegate responsibilities to respective employees to maximize the productivity of services (refer figure 2). On the other hand, cultural environment of France is based on the individualism whereas Taiwan’s culture has more focuses on collectivism because western countries has motive to work on individual basis rather than integration of people in one category. Moreover, eastern countries always perform the business activities with involvement of entire organizational people (Naor, Linderman and Schroeder, 2010).

There is significant difference between France and Taiwan’s culture on the basis of uncertainty avoidance. France does not consider the uncertainty for the business and low focuses on the avoidance by continuing with further proceedings (refer figure 2). However, Taiwan examine the risk factors of business before and after the operation because on the basis of risk factors, organizations would be able to measure the market factors and level of profitability in that specific market segment (Hofstede insights, 2018). Apart from this, the cultural environment of France is surrounded by short-term orientations but Taiwan is based on the long-term orientations. In this regard, France has individualism culture so it does not involve the family and other people in the business activities whereas Taiwan has eastern culture that bound it to focus on the family, relatives at the time of business considerations. Hence, it can be better for Chatime to enter into France market because of low consideration of family and can produce the variety of tea series as per the requirements of business as well as consumers.

Cultural Environment Analysis of France and Taiwan

On the basis of cultural environment, it has been found that the culture of France is individualistic which is beneficial for the new entrance in the market place because the consumers can be any type for the Chatime products such as tea. The consumer’s preference would not be affected by the family concern because there is less involvement of family in any concern which is valuable for the businesses.

Country of origin

Chatime is a company of Taiwan and has a global chain of the teahouse which is based on the culture of Taiwan (Chatime, 2018). Taiwan is a eastern country and associated with the variety of cultural environment that affects the business in home as well as host country. For example, Chatime is entering into France and both the countries have different cultural environment such as eastern and western. In this manner, both are having the significant cultural variations. 

Success of tea in France market

The success of tea in the France market is based on the consumer behavior and perception towards the tea which is originated in Taiwan. In this regard, it has been analyzed that Chatime is a well-established company at global level because tea business is operating in 30 countries (Chatime, 2018). The company has a created a brand image in the consumers mind in context of offering the vide variety of tea along with quality products. Further, it has modernized the tea series from traditional culture to updated version. It has adopted new machines to produce the fresh tea, different flavors along with topping and fruits. This type of culture is helpful to make Chatime different from competitors. At this juncture, the people of France would easily accept the new series of tea which offered by Chatime because of international identification of quality products. Although, the culture of France is totally different from the Taiwan because people based on the higher acceptance of risk; however, Taiwanian does not accept the risk factor on higher rate (Hofstede insights, 2018). Hence, it reflects that the customers of France would be greatly affected by the eastern culture, perception and adaptability of the products and would not resist to accept the changes in variety of tea.

Market segmentation

Segmentation is the process of dividing the entire consumer market into different sub parts for the products and services. Market can be segmented on the basis of geographic-regions, country; demographic-age, income, gender, occupation; behavioral-occupations, usage rates, loyalty status and psychographic factors- life styles, beliefs, values and personality (Wedel and Kamakura, 2012). By considering the basis of segmentations, Chatime would divide the entire France market on the basis of demographics.

Chatime’s Brand Image and Success

Table 1: Market segmentation for Chatime

Particulars	Description
Basis of segmentation	Demographic
Age group	25-50 (Youth & old age people)
Income	More than 10,000 p.m.
Gender	Male & Female
Occupation	Students and professionals

According to table 1, Chatime would enter into France market on the basis of demographics in which the age group of 25-50 would be selected. The company would only focus on the given age group because the youth and old age people prefer the tea. The youth has been selected due to vide variety of teas such as refreshing juice series, toppings, coffee, health conscious tea with added of low sugar, red bean milk tea etc. Further, all male and female would be Chatime’s target customers by involving students and professionals because they might have to deal with stress level in this case refreshing juice series would be used by students (refer table 1).

Target market

Target market is crucial task for the companies to select the customers in unknown market for the success of the business (Heslop and Nadeau, 2010.). Chatime would focus on the target customers such as students and professionals so for the convenience of the target customers a nearby area of malls, schools, colleges and apparel market can be selected. In this regard, it can be easy for the professionals and students to approach the outlet of Chatime and they would be ready to pay higher amount for the tea because of availability of variety of tea along with involvement of health-conscious ingredients in tea. In this regard, at any time students and professionals can reach at Chatime to have tea to feel better from the frustrated environment. However, in absence of target market, the company would not be able to deal with the demands of customers and competitive products of the rivalries (Pradiptarini, 2011). Hence, due to environmental factors such as better weather conditions and cold season, tea can be preferred by the target consumers and would have contribution in profitability of Chatime’s.

Positioning

Positioning is the process to establish the product and services in the market to grab the entire market place. There are different types of positioning strategies like cost/pricing, product, quality etc. which are used to attract the large number of customers (Varadarajan, 2010). In this regard, Chatime is going to positioned its products as series of tea by considering the quality factor. The respective company would provide the quality products such as health conscious, low sugar added, refreshing juice and variety of coffee. Further, the company would involve the quality as a key element in the marketing strategies, advertising activities etc. so that a brand image would be created in the mind of customers. 

Marketing entry strategies 

In order to expand the Chatime in France, there are several market entry strategies which can be recommended including licensing, franchising, joint venture and exporting. Here, Chatime can use franchising for expansion because this type of market entry strategy is suitable for the rapid market expansion though operating business in host country from second parties (Khan, 2014). However, this type of market entry mode requires unique brand identification (Leslieand McNeill, 2010). In this manner, as per the above discussion, the Chatime have unique identification of brand through the several types of exclusive offers in beverages. Apart from this, Chatime can also adopt the direct export strategy to launch its product because the host country has moderate taxes for business. However, heavy transport duties and other related changes in context of export might increase the risk.  

The licensing can also be helpful for Chatime to expansion in France by offering their rights to other companies. However, the licensing has major disadvantages for licensor because the licensor does not have any control on the licensee’s business (Mullainathan and Schnabl, 2010). On the other hand, Joint venture can also be a successful method for expansion of Chatime in France because through the joint venture Chatime can increase their competitive edge in host country with help of partner’s knowledge for local competitor (Nielsen and Nielsen, 2011). On the contrary, Yan and Luo (2016) mentioned that, the joint venture breaks the profit in two parts, one for expanding company and another for the partner. 

Joint Venture as the entry mode in France

As per the above discussion, Chatime should use joint venture strategy for expansion of its business in France because the company will be able to directly control the operation through involving all the decision of business. At the same time, the company can use the local partner’s knowledge to easily understand the requirement of local customer and will offer the services according to customers’ requirement (Nielsen and Nielsen, 2011). Apart from this, by using joint venture mode, Chatime will be able to reduce its expenditure in the operation because half of expenditure will pay from the partner (?or?evi?, M. and ?or?evi?, A., 2012). On the other hand, Chatime should establish their contract with one of the most popular brands in France because the customer of that brand will be helpful for the startup pushup for business (Bocken, 2015). Nevertheless, the joint venture addresses the all the shortcoming from other type of market entry mode for Chatime including licensing and direct export.

International marketing mix

On the basis of above analysis related to France and Chatime, following recommendations have been provided for the successful expansion of the business in the international marketplace-

Table 2: International marketing mix

Lists	Description
Product	Bubble tea, fresh juices and smoothies with the specific toppings of Chatime
Price	Moderate price will be kept (10 to 12 EUR)
Place	Cinema halls and cafes and separate restaurants nearby malls
Promotion	Social media and brochure will be used

On the basis of above table, France beverage industry will get the specific products in the form of Taiwan tea and coffee through which buyers get the specific traditional taste of the drink. However, the origin of product plays an important role in raising the awareness among buyers. Apart from this, moderate pricing strategy will ensure that product quality is matched with the pricing strategy and accordingly it increases the wiliness of buyers to pay high. However, it is the crucial to focus on appropriate promotional strategies so as to promote the product in the international marketplace (Krook and True, 2012). For this purpose, selection of social media and brochure is helpful as it would be helpful in communicated among the targeted population.

International marketing strategies

On the basis of evaluation of the current report, it is suggested for the business that product should be modified on the basis of changed requirement of buyers. However, customers likely to shift towards other brands if they do not find any changes in the products (Terpstra, Foley and Sarathy, 2012). For this purpose, it would be beneficial for Chatime to meet the expectations of customers by making modification in the product on the basis of received feedback. Apart from this, changes can be done in the pricing strategy also through which buyers can be attracted. For instance, 15% off on the weekends can be help in engaging more buyers because specific segments like students like to go out-dine during the weekends.

Cultural adaptation in France

Several studies evidenced that business get failed in operating overseas due to cultural differences (Schmid and Kotulla, 2011; Navarro, Losada, Ruzo and Díez, 2010; De Mooij, 2018). This makes it necessary for corporation to ensure appropriate degree of standardization and adaptation in its products and marketing practices (Krook and True, 2012). For this purpose. Chatime will keep its product standardized but the marketing practices will be adapted on the basis of local culture. However, the products will also be modified to a certain extent on the basis of local culture. This leads to increase its acceptance rate and increase the satisfaction level of buyers.

Conclusions

On the basis of report, it has been concluded that the environmental factors of France are adaptive for Chatime if it enters into France market because of mild summer and cool winter seasons. In this regard, flavored teas would be preferred by the France people. Further, it has also been summarized that there is a threat of new entrance is high in the France market because several availabilities of competitors in beverage industry. Further, the cultural environment of France is totally different from Taiwan because it is based on the individuality and higher avoidance of risk which is affects the business growth because company would not focus on the uncertainties and keep continue with current business. At the end, it has been concluded that for the expansion of the Chatime in France can adopt the franchise strategy for the host country. It would be helpful for the company to export the products in France due to moderate taxes for business 

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