Sparkling ICE by C100 - WordPress.com...Sparkling ICE by C100 Team 4: Daniel Dorson, Kim Foote, Kelsey Kitchen, Rachel Mendez, ... Global Strategic Partnership Source: Global Market

Sparkling ICE by C100

Team 4: Daniel Dorson, Kim Foote, Kelsey Kitchen, Rachel Mendez, Mandy Schiff, Kacey Silverman

Talking Rain’s Sparkling ICE should partner with Nongfu Spring’s C100 in Shenzhen, China

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Major issues of unsanitary water and air pollution

Fruit juice and bottle water growing faster than soda

Mineral water holds 42% market share in China

73% of consumers purchase healthy beverages for having a

“well-known brand”

Launch pear flavored sparkling

water

Source: http://www.euromonitor.com/bottled-water-in-china/report

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Market Assessment

Market Entry Strategy

Marketing Plan

China provides favorable market assessment criterion for Sparkling ICE

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Introduce pear flavored beverage to meet needs of new market

Product Suitability

Target Markets

Industry Market Potential

Business Partner

Company Sales Potential

Shenzhen, China enables targeting urban growth clusters

Favorable emerging market potential index of 52.57

Value-adding activities performed by Nongfu Spring Co.

Future growth expected from Global Strategic Partnership

Source: Global Market Opportunity Assessment, S. Tamer Cavusgil/Gary Knight/John Risenberger

China is an appropriate country of choice

China’s bottled water

market

Doubled global market share

Projected increase 73%

by 2017

Projected sales of $16B by

2017

Consumption grew 14% in

2012

5 Source: Bottled Water Market Quickly Turning Chinese, Forbes.com

Our offering better serves consumers needs and is suitable for upcoming beverage trends

Sell well in domestic market - Sparkling ICE sold $148M in 2012 and now accounts for 95% of sales

Cater to universal need for clean drinking water in China

Address need not well served in foreign markets - toxic organic pollutants have been discovered in the Yangtze River

Address new or emergent need abroad - Chinese consumers become aware of the health benefits of drinking water

6 Source: Global Market Opportunity Assessment, S. Tamer Cavusgil/Gary Knight/John Risenberger

Risks Benefits

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A Global Strategic Partnership offers a favorable mix of investment, commitment, and risk

Source: Global Market Entry Strategies, Warren J. Keegan/Mark Green

Marketing plan to guide decisions regarding standardization and adaptation

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Product

• Adapt flavor

• Export American water

Price

• Localized flexible cost-plus pricing

• 10-30% premium

Place

• Supermarkets

• Hypermarkets

Promotion

• Local TV/print ads

• Show transparency/ build trust

Source: Marketing in the Global Firm, S. Tamer Cavusgil/Gary Knight/John Risenberger

Risk Scale Mitigation

Initial entry with one flavor

Establish market share quickly and launch new flavors based on in-depth

consumer research

Rejection from Chinese consumers

Utilize Nongfu’s market knowledge to cater to consumers preferences

Lack of intellectual property rights

Delay competitors by conveying American image to inspire trust and

differentiate product

Sparkling ICE cannibalizes C100

Exploit GSP through continual transfer of resources horizontally

Level

of

Impact

Relative

Probability

Potential risks for expansion are minimal and easily mitigated with marketing alternatives

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Questions?

10 Team 4: Daniel Dorson, Kim Foote, Kelsey Kitchen, Rachel Mendez, Mandy Schiff, Kacey Silverman

Appendix A: Implementation strategy/timeline

Appendix B: EMPI Index

Appendix C: McKinsey’s Industry Growth Cycle

Appendix D: Task Five – Business Partner Criteria

Appendix E: Shenzhen, China; initial entry city

Appendix F: Additional benefits utilizing a Global Strategic Partnership

Appendix G: Route to market

Appendix H: Global Marketing Strategy

Appendix I: Secure support from key stakeholders

Appendix J: Hofstede’s Cultural Dimensions

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Product design, Focus groups

Establish Negotiations

Expand to other cities in China; Produce more flavors

Appendix A: Implementation strategy/timeline

Export using C100 distribution

to enter stores

Establish relevant market share in

entry city

Back

Appendix B: EMPI Index

Country Market

Potential

Market Size 20%

Market Growth 10%

Market Intensity

12%

Market Consumption

18%

China 100 100 1 70

India 37 74 28 78

12 Source: http://globaledge.msu.edu/mpi

Infrastructure 15%

Economic Freedom

5%

Market Reception

15%

Risk 5%

Total

39 8 4 54 52.27

22 52 3 42 40.65

Back

Warm-up Zone

Chill-out Zone

Hot Zone

Appendix C: McKinsey’s Industry Growth Cycle

13 Source http://www.mckinsey.com/features/30_trillion_decathlon Back

• C100 provides well-known and favorable local brand presence

• Access to local distribution channels

• Appropriate facilities and infrastructure

Specific industry expertise

• Revenue = $1.6 Billion USD

Financial strength

• Utilizes SAP to improve operations

Technical expertise

• 8,000 sales representatives serve more than 1 Million customers gratification for thirsty consumers

Quality of staff

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Appendix D: Task 5 – Business Partner Criteria

Source: http://www.smigroup.it/smi/repository_new/doc/NONGFU_UK.pdf Back

• Special Economic Zone

• World’s 4th largest port

Benefits for Exporting

• 10.47 million people

• City of migrants from all over China

• Average age < 30

• Primarily speak Mandarin, then Cantonese, Hakka

• Highest Per Capita GDP among Chinese cities

Demographics

Appendix E: Shenzhen, China; initial entry city

15 Source: http://www.china-briefing.com/news/2010/11/11/chinas-wealthiest-cities-2-the-demographics.html http://understand-china.com/province/shenzhen/

Back

Appendix F: Additional benefits utilizing a Global Strategic Partnership

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Develop a joint long-term strategy pursuing differentiation through healthy water from USA with popular Chinese flavored water brand

Reciprocal relationship; Sparkling ICE shares beverage and C100 shares established local presence, distribution, and advertising

Continual transfer of resources horizontally

Participants retain their national and ideological identities

Source: Global Market Entry Strategies, Warren J. Keegan/Mark Green

Back

Source: http://shenzhenshopper.com/531-grocery-shopping-in-shenzhen-where-to-buy-imported-foods.html

Test Market

• Retailers known for imports in Shenzhen

Expansion

• Use Nongfu established distribution channels

Appendix G: Route to market

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Back

Position in the Market

• C100 Sparkling Pear is an all natural, healthy alternative to carbonated soda

• Pears provide superior health benefits and sparkling water is new to market

• Well-known United States brands resonates and inspires trust

• Imported to insure water is reliable and of supreme quality

Target Customer Segments

• Nongfu Spring’s current demographic; young intellectuals with a high level of education and are health conscious

• Affluent white collar workers willing to pay a modest premium for nutritious, safe, and high quality foods

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Appendix H: Global Marketing Strategy Back

Source: http://blog.euromonitor.com/2014/03/chinas-functional-beverage-market-thrives-as-brands-zero-in-on-key-demographics.html

Gov. • Relationship

• Regulations, tariffs

Media • Image

• Advertising

Society

• Brand reputation

• Buyer behavior

Appendix I: Secure support from key stakeholders

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Back

80

20

66

30

87

Power Distance Individualism Masculinity UncertainityAvoidance

Long-termOrientation

20 Source: http://geert-hofstede.com/china.html

Appendix J: Hofstede’s Cultural Dimensions

Back