AMN431 Marketing Internationally

Introduction 

International marketing requires successful and effective planning and execution of pricing, promotion and distribution of products and services in the international market to increase customer base. This provides an opportunity to increase the company’s visibility in the global market and undertake prevailing opportunities in the global market. However, there are various challenges that must be considered before entering in the international market such as cultural differences and political disturbances. These factors might have significant impact on the operations and activities of the organization in the international market. The purpose of this report is to discuss and analyze the two foreign markets China and South Korea for Trisco Foods Precise liquid range. Precise brand is owned by Trisco Foods, Australian based company.

Company Background 

Trisco Foods offers wide range of products including dietary supplement products, extra nutrition to assists health and wellbeing of the people. It also offers liquid thickened drinks which is easy, economic and stress free. It also manufacturers Thick-N Instant, Thickened Water, Ready-To-Drink Flavoured Water, Cordials and Juices for its target customers (Precise., 2021).

Target Segment 

The business organization targets the vulnerable section of the country’s population. It targets the aged population suffering from Dysphagia. It also targets the hospitals, care centres, disability centres and old age homes especially who deals with patients diagnosed with Dysphagia (Precise., 2021).

Main Source Of Competitive Advantage In Australia 

The product and pricing strategy of Trisco Foods provides a competitive advantage to the organization. The products offered by Trisco Foods helps to enhance lifestyle and wellbeing of the target consumers in the market. Moreover, the business is conducted in an environmentally responsible manner by implementing methods and technologies that avoid environmental damage (foodprocessing.com.au., 2021).

Market Analysis

The international market might provide better opportunities for the company to increase its profitability and sustainability in the long run. The two countries China and South Korea will be examined and analyzed with the help of CAGE framework to determine possible opportunities and threats prevailing in both the markets (Ghemawat, 2017). The cultural, administrative, geographic and economic distance between the countries is discussed below in detail:

Cultural Distance

China has a rich culture for hot beverages particularly which is favourable for Trisco Foods. The population has shifted towards healthier consumption and natural food products. Chinese beverage market has a strong potential with every growing middle class consumers in the market. Internet sales of beverages have increased in china, however offline and retail sales continue to be main channel of distribution (David, 2021). The consumers especially the senior citizens and aged consumers have switched towards healthier living which has been shaping the industries (David, 2021).

Similarly, the food culture of South Korea is based on healthier food consumption trends. The consumers demands for healthier foods and beverages to accommodate their lifestyle and enhance their wellbeing. The naturally healthier products to forecast to record higher growth rate from 2018 to 2022 (Agr.gc.ca., 2021). The market is highly health conscious with a steady growth for health and wellness products. This culture within the country makes it suitable for business expansion (Agr.gc.ca., 2021).

Administrative Distance:

China has immense political disturbances which deteriorate the relations with the host country. The global pandemic situation has further exacerbated the issues and tensions between the two countries. China has subsequent changes in trade policies which are interpreted as economic coercion against Australian . China has strict laws and legal procedures against foreign traders within the countries. This situation dissuades Trisco Foods to enter Chinese market (David, 2021).

On the other hand, South Korea and Australia had established diplomatic relationship in the past years. However, the COVID-19 pandemic has disrupted bilateral trade in the year 2020 (Exportfinance.gov.au., 2021). The country has been focusing on boosting green and digital investments which is a positive aspect for Australian exporters, especially food and beverage (Agr.gc.ca., 2021). The government provides opportunity for foreign traders to create a strong manufacturing base. Therefore, expanding in South Korea might be slightly favourable for Trisco Foods.

Geographic Distance –

The large population of china is highly attractive for foreign traders along with increase in ageing population. China is 24% larger in size as compared to Australia which makes it highly favourable for business profitability (Data.worldbank.org., 2021). On the other hand, South Korea has 2 times more population than Australia which also makes it favourable for business profitability (Data.worldbank.org., 2021).

Economic Distance –

China is the world’s second largest economy with higher GDP growth rate. It has been riding on strong domestic as well as foreign demand aided by quick recovery from the pandemic situation caused by covid-19. The GDP of the country recorded 18.3% in the first quarter of 2021 as compared to 6.1 GDP growth rate of Australia (Statista., 2021). . On the other hand, South Korea grew by 2.04% as compared to the past year (Statista., 2021).

Ethical Consideration

Cultural considerations including customers, traditions, language and code of ethics needs to be considering in order ensuring maximum success in business expansion policies. The marketing ethics in china needs to be considered as Chinese society is highly influenced by traditional values and has strict systems of norms and propriety (Exportfinance.gov.au., 2021). Moreover, the Chinese government has higher expectations from business organizations; therefore, Trisco Foods needs to ensure that the ethics and CSR programmes are in complement with the long term strategies for social benefits as indicated in the Chinese government’s successive five year plans (Enderle & Niu, 2012). Both China and South Korea are not English speaking countries and have vast differences in cultural aspects of the people. Therefore, marketing the products and communications must be locally influenced and easily understandable by the foreign consumers. South Korean consumers are highly conscious regarding human relationships and human rapport and avoid detailed contracts (Enderle & Niu, 2012). Moreover, the South Korean consumers are highly sensitive to messages and flow of communication which has significant impact on the sales and profitability of the business (the Guardian., 2021).

Recommendations

From the above analysis and explanation, it can be stated that South Korea would be preferable for business expansion considering its suitability and prevailing opportunities. China may not be suitable for business expansion currently due to ongoing trade problems and political tensions. The relationship between Australia and China has been affected after the pandemic situation. The complicated trade laws and policies as well as political disturbances in the country might also affect business operations. Research suggests that overseas firms struggle with the complicated laws and regulations in China, listing bureaucracy as their major concern when expanding its business into the country (Data.worldbank.org., 2021). The foreign procedure for manufacturing in China can impact the appeal of the country. In comparison to China, South Korea has comparatively less political disturbances and has better economic conditions. The cultural and administrative policies also make it highly favourable for business expansion. The consumers in the South Korean market has been switching to healthier food consumption trends due to ongoing health concerns, this situation is also favourable for Trisco Foods to expand its business operations. Moreover, the government is supportive of foreign trade investments which are highly suitable for the business operations.

Conclusion 

Therefore, from the above discussion and analysis it can be concluded that expanding business operations in the South Korean market might be highly beneficial for Trisco Foods considering the prevailing opportunities in the market. The report has identified that cultural distance, administrative distance, geographical and economic distance between the two chosen countries. It has justified the recommended country for business expansion.

References 

Agr.gc.ca. (2021). Health and wellness series – Health and wellness trends in South Korea - Agriculture and Agri-Food Canada (AAFC). [online] Available at: <https://agr.gc.ca/eng/international-trade/market-intelligence/reports/health-and-wellness-series-health-and-wellness-trends-in-south-korea/?id=1546274466439&wbdisable=true> [Accessed 22 April 2021].

Data.worldbank.org. (2021) GDP growth (annual %) - Korea, Rep. | Data.. Retrieved 22 April 2021, from https://data.worldbank.org/indicator/ ?locations=KR.

David, M. (2021). The Chinese beverage market: How health trends shape drink preferences - Daxue Consulting - Market Research China. Daxueconsulting.com. Retrieved 22 April 2021, from https://daxueconsulting.com/beverage-market-in-china/.

Enderle, G., & Niu, Q. (2012). Discerning ethical challenges for marketing in China. Asian Journal of Business Ethics, 1(2), 143-162.

Exportfinance.gov.au. (2021). Bilateral relations.  Retrieved 22 April 2021, from https://www.exportfinance.gov.au/resources-news/country-profiles/asia/south-korea/bilateral-relations/.

foodprocessing.com.au. (2021). Retrieved 22 April 2021, from https://www.foodprocessing.com.au/content/prepared-food/product/trisco-foods-precise-thick-n-instant-thickener-solution-913838335#

Ghemawat, P. (2017). Differences across countries: the CAGE distance framework. Harvard Business School Press, Redefining Global Strategy: Crossing Borders in a World Where Differences Still Matter, Boston, USA, 8-10.

Precise. (2021). Precise – Liquid Thickener for Dysphagia Management. [online] Available at: <https://precisethickn.com.au/> [Accessed 22 April 2021].

Statista. (2021). China - Gross domestic product (GDP) growth 2025 | Statista. Retrieved 22 April 2021, from https://www.statista.com/statistics/263758/gross-domestic-product-gdp-growth-in-china/.

Statista. (2021). South Korea - Gross domestic product (GDP) growth 2025 | Statista. Retrieved 22 April 2021, from https://www.statista.com/statistics/263758/gross-domestic-product-gdp-growth-in-south-korea/.

the Guardian. (2021) Focus on China: operating responsibly in emerging markets.. Retrieved 22 April 2021, from https://www.theguardian.com/sustainable-business/china-operating-responsibly-ethical-standards.

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