International Marketing Strategy For Coles Supermarket In Hong Kong – Report

Introduction to report

The paper will provide information regarding the stages of market selection and a reason for choosing Hong Kong market for their firm. It is seen that the firm Coles supermarket wanted to expand their business in Hong Kong and for this reason, the appropriate modes of entry will briefly be discussed in this paper. Furthermore, the target, generic and positioning strategies will be explained and analysed briefly in this context. Moreover, some recommendations are also provided that will help the firm to expand their business in the coming days.

Assignment 1 evaluates the international marketing strategy of the firm Coles supermarket that was going to expand their business in Hong Kong market. In other words, the report also stated about the various types of market analysis in concerning to growth rate, population, market barriers, and drivers. Besides this, Porter’s Five Forces, operational and SWOT analysis are also done which thus help the firm to gain the competitive advantage over other companies in the market. Furthermore, in assignment one, both the external and internal environmental factors are also briefly discussed which provides an idea of the overall environment of the market.      

Market selection is necessary to start a business in the international market. The company chose Hong Kong market for expanding their business of Coles supermarket, and before selecting this market, they make a view of financial, competitive as well as the economic conditions of the selected area (Marchi, Vignola, Facchinetti, & Mastroleo, 2014).     

The five stages of the foreign market selection process are as follows:

1. Domestic regulation and management preferences– In this stage, the company has to evaluate the type of international market that has enough potential to increase their business growth in coming days (Tirole, 2016). Besides this, the firm has to exclude all other international markets that do not provide them enough profit for their business.  
2. Initial entry assessment– in this stage the company focus on the macro environmental factors of the global market that provides least attractive social and political environments.  
3. Competitive environment- Before choosing the market for expanding their business, the firm has to focus on the substantial barrier that may cause massive competition for their products. In other words, after knowing the market environment, the firm can easily avoid those market that gives them huge competition (Mathews, Bianchi, Perks, Healy, & Wickramasekera, 2016).     
4. Market responsiveness- In this stage, the company determines the marketing effort of the overseas market that help them to gain a satisfactory market share. They also identify the optimal and costs problems of expanding their business in the international market.
5. Internal trade-off analysis- this stage is considered the final stage of market selection as in this stage the unattractive market are excluded, and a market that fulfills the firm’s objectives are chosen.     

The market selection in new millennium catering is mainly based on the clustering markets in concerning to the cultural similarities and also by the influence of technology and e-commerce advances (Rezaei, Nispeling, Sarkis, & Tavasszy, 2016).        

One of the main reason for choosing Hong Kong from the Coles Supermarket company is to gain a competitive advantage and also to establish their brand in China. According to the market analysis, it is seen that the people in this market wanted the best quality products at low cost (Laufs, & Schwens, 2014). Hence this is also one of the reasons for expanding their firm in this market. The company selects this market because Hong Kong has the highest level of population which thus increases their profit and market share too. In other words, the political and economic factor of this market is quite stable, and this is also considered as one of the reasons for choosing this country.    

Screening of market selection

The mission statement of Coles Supermarket in Hong Kong is “Supermarket that has customers value and provides superior and convenience products and service.”

The main objectives of this firm are:

• To provide useful quality products at low cost
• To gain the competitive advantage in this country
• To enhances their brand name and become one of the leading supermarket firms in Hong Kong

The market entry strategy or the mode of entry of this Coles supermarket in Hong Kong are based on three methods of entry which are as follows:

Thus from the three modes of entry, it is clear that the relationship-based entry will be better suitable for the firm because it provides them huge success in the coming days and also helps the supermarket to establish their market permanently in this country.

The theories that should be used for market entry in the Hong Kong market are Dunning’s eclectic paradigm and Williamson’s transaction cost approach. Dunning’s eclectic paradigm theory is based on three elements one is ownership attributes, internalization and location attributes (Grimmer, 2018). The three factors of this theory described competitive advantage, control of resources, FDI in the foreign market and also the governmental regulations that need to be followed by the firm after starting the business. Another theory of Williamson’s describes that the chosen mode of entry provides control in transaction specific assets, internal and external uncertainty and also on the free-riding potential (Sultan, Wong, & Sigala, 2018). Hence both these theories have to be followed by a company before entering a foreign market.

The company target market is mainly the housewives that are fond of buying cooking products and enable to cook for their loved ones. The positioning strategy of the firm is to enhance their performance by making high-quality products for their customers by maintaining their price so that they can quickly grab the market which can improve their business growth (Escaron et al., 2016). In other words, by target markets, they can easily enhance secure positioning and profitability and thereby generic strategic options should improve.    

The target customers for this Coles supermarket are the mainly the people that possess different cooking habits and are fond of making various cooking dishes for their loved ones. It is noted that the company’s main products are dairy, fresh fruits, and other food-related products. Thus this company main strategy is to target are children in the age between 10 to 15 years, youth in between 16 to 25 years and mainly the housewives of age between 23 to 50 years (Zarkada-Fraser, & Fraser, 2015). For maintaining their target market, they are going to offer various discounts on their products.

Alternative market entry strategies as a new company

The firm mainly focuses on the segmented population those who wanted products under one roof. By using this strategy of manufacturing food products under one roof, they will enable to maintain their position in the market of Hong Kong (Pulker, Trapp, Scott, & Pollar, 2018). In other words, low pricing of high-quality products will also enhance their place in this country. Thus it can be seen for making a good position in the new market the firm uses these strategies so that they become one of the leading brands in Hong Kong.

The selection of market is mainly based on segmentation and targeting procedure. As Coles supermarket provided business to customer or B2C services so their central segmentation, as well as targeting, will be done by demographic, behavioral, physiographic and environmental factors (James, 2016). The company is going to expand their business in the international market, so according to the export-based entry they have to segment customers by demographic criteria so that they enable to manufacture products as per the customer needs (Wertheim-Heck, Vellema, & Spaargaren, 2015). In other words, according to the manufacturing based entry, they have to manufacture products according to the customer’s lifestyle and occupation. Besides this, in relationship-mode of entry, the company has to focus on all aspects of segmentation so that they can quickly enhance their business in this Hong Kong market. Apart from this depending on the market needs they segmented the customer section of their firm.              

Many companies make various strategies for selecting their target market, but few firms can afford to enter into all markets. The company Coles supermarket also uses the innovative approach to target market by different modes of entry. In concerning export-based entry, they mainly selected the children of age between 10 to 15 years as their main target market. In this entry modes mainly the company has to take franchisee or they have to license for their firm for certain years. Thus for increasing their business growth, they will select this age group people as their primary target customers. In manufacturing-based entry modes, they will focus mainly on the housewives and manufacture products according to their needs (Lewis, & Phillipov, 2016). In this modes of entry, the firm has to acquire with another firm so they targeted this group of people. In other words, in case of relationship-based entry, they will focus on the people of different age group and manufacture products according to the market trend so that they can quickly increase their business growth in Hong Kong.          

Alternative target market selection, positioning

To enhance the positioning of the Coles supermarket in Hong Kong, the firm mainly focuses on the characteristics of the products that give benefits to their customers and attracts the vast number of customers towards their firm. In concerning to manufacture-based entry mode, the positioning strategy for children is that they make different flavors diary and chocolate items that can attract them towards their brand (Booth, & Coveney, 2015). In another word for the housewives and also for the youths they will manufacture fresh and high-quality products and sell them at a low cost. Though it has given them a minimum profit, it helps them to make a good positioning for their brand in this country.       

The generic strategies mainly focus on the positioning and profitability of the firm. By Porter’s model to maintain a competitive approach about cost the firm has to access new technology and raw materials and also manufacture the product as per the target market and market needs (Rummo, Guilkey, Popkin, Evenson, & Gordon-Larsen, 2017). In other words by differentiation, they will reduce the cost of the product than other similar firm in the market so that they can quickly grab the customer attention towards their firm. Besides this, to enhance their competitive strategies, they have to focus on the differences in cost behavior so that they will manufacture products concerning to the target market. Hence all these Porter’s competitive strategies help the firm to enhance their positioning and profitability.        

Some suggestions are provided that help the firm to enhance their business growth in the Hong Kong market are as follows:

For entraining into the international market, the firm has to choose relationship modes of entry because in this entry modes they have to make strategic alliances with other established firm in the area. In other words, this modes of entry also help the firm to readily know about the customers’ needs and demands concerning food types.

It is to be recommended that the firm has to take care of their range and quality of products and also focus on their healthy products so that they can easily attract their targeted customers. Besides this, if they make the differentiation in the market with quality food at less cost which thus increases their customers base.

To increase their positioning, they have to focus on refining, enhancing and improving their investments in the field of promotion and advertising so that their vision can easily reach to the consumers.    

Market selection process– Segmentation and targeting through alternative entry modes in to the country of your choice

One of the generic strategies used by the firm is to make joint ventures with the Charltons Company in Hong Kong which is a leading boutique law firm. The company gives legal advice to PRC and international clients and also provides the joint venture with the global firm.       

Identify potential market segments in the chosen market

Conclusion: 

The paper concludes that among the three modes of entry if the firm chooses the relationship based entry, then it will help in bringing huge benefits for them in future. In other words, the firm mainly targeted the age group of children, youth and housewives concerning to their entry modes and also make positioning strategies about that. Besides this, the recommendation provides also concludes that by using this strategy the firm can quickly enhance their business growth in the future.        

References: 

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