Marketing 477 | International Marketing | Spring 2018

Marketing 477 | International Marketing | Spring 2018
I NEED YOU JUST TO WRITE NUMBER 5 , #2
Advertising and promotion (Item #5) JOE
Advertising media usually used to reach your target market(s)
Sales promotions customarily used (sampling, coupons, etc.)
Promotion mix: Sales promotions & Personal selling (Item #2) JOE
Objectives – Major retailers, Corporations, Families, Tourist, Movie Theatres
Coupons – Social Media coupons and advertisements / Partner with major retailers using promotional offers
Premiums – Animal of the year toys / Special packaging
Costs – Social Media pay for ads / Commercial costs / Branding and partnership costs
Our product is a new popcorn introduced in Hong Kong I just need you to fill in these ones.
Market Audit:
The Implementation of Chico Pops into Hong Kong
Paper 1: Market Audit
I.  Introduction
Chico Pops is a gourmet popcorn company based in Chico, CA. In looking to expand its consumer base, the company is looking to venture into a foreign market. Hong Kong, a region of the Greater China, holds potential for successfully marketing the popular American snack food. In order to successfully venture out of the US market and introduce the product into Hong Kong, it is necessary to understand the state of Hong Kong’s current market. Throughout this paper, we will be analyzing potential snack food competitors that exist in Hong Kong as well as what political factors could affect selling the product there. Given it is a necessity to have an understanding of successful marketing strategies used in Hong Kong, we will also be analyzing how Chico Pops can fit its strategic marketing plan to mimic one that will appeal to consumers in Hong Kong.
II. General information on product category or industry
The snack food industry is extremely competitive, especially the salty and savory sector. The snack food industry in Hong Kong has an annual revenue of about $419 million in U.S. dollars and is expected to grow by 7.1% each year from 2018-2021 (Snack Food – Hong Kong). Consumers use snacks to temporarily satisfy hunger or even to replace a meal, although this is not the preferred choice by health experts.
In 2015, Hong Kong retail food sector sales advanced almost 4% to $11.9 billion. This positive growth trend has remained to increase over the past few years, especially for the products that are revolved around consumers conducting a healthy and sustainable lifestyle (Meador, M. M.). China has venture capital and private equity funds that are funding hundreds of millions of dollars to support startups that are producing healthier snack food products. Snacks such as yogurt, energy bars and kale chips are becoming more and more popular as unhealthier snacks are becoming frowned upon due to certain marketing practices. As the Chinese populations starts to have a increase their awareness of  various lifestyle diseases such as diabetes, atherosclerosis, and obesity, they have increased their demands for healthier snacks foods.
III. The market
Hong Kong’s Market
Advertising and promotion (Item #5) JOE
Advertising media usually used to reach your target market(s)
Sales promotions customarily used (sampling, coupons, etc.)
Pricing strategy (Item #6) VICTORIA
Customary markups
Types of discounts available
B. Competitors
Within the snack foods industry in Hong Kong, Garrett Popcorn Shops is a company fairly similar to that of Chico Pops. Based in Chicago, the company has made a name for itself globally with its gourmet flavors of hand made popcorn. Garrett Popcorn boasts using only high-quality ingredients and has various popular flavors including CaramelCrisp and CheeseCorn. The brand has a large following in China, with a second corporate office placed in Hong Kong.
As opposed to the individual bags of popcorn that Chico Pops sells, Garrett Pops sells their product in tins that come in different sizes. These tins are customizable with many different colors, designs and themes, like Chicago Cubs.
A 3 oz bag of Chico Pops popcorn is $3 on the Chico Pops website, while a classic one gallon tin of Garrett Popcorn is $33 on the Garrett Pops Shops website. Their options range from classic, family, friends, celebration and a petite pack which retails for $152. Chico Pops sells their popcorn at a much lower price than Garrett Popcorn, the competitor ha the advantage of selling in bulk for a lower price.
The company maintains a presence on social media that helps the promotion of their popcorn. They are also the official popcorn brand of Wrigley Field and the Chicago Cubs, which is a huge amount of visibility for the company. In addition to their 21 locations across the US, the Middle East and Asia, Garrett Popcorn offers their products for sale on their website. The site ships throughout the US and Canada, though they  Their products are also available at participating retailers.
C. Market Size
By the end of 2016, Hong Kong’s food sales rose 3.9% to $11.9 billion. Generally speaking, a positive growth towards healthy food items has rose in this period. U.S. agricultural exports to Hong Kong reached $3.8 billion dollars. Both Supermarkets and Convenience stores are a phenomenal market in Hong Kong. With similar markets such as 7- Eleven and Circle K, entry into those convenient stores won’t be incredibly difficult.  Over 900 7- Elevens exist in Hong Kong and over 330 Circle K’s in the region. For this planning year, it is estimated to increase to over $13 billion in the industry.
For the planned year, we plan on gross average sales $10,000 a month for a total of $120,000 in the year. Four percent growth for the second year and on average increase $400 a month in gross sales. For the following year gross is planned to be $11,248 a month. Assuming all goes well, expected growth is planned to be linear.
D. Government Participation in the Marketplace
The governmental agency that would be of most assistance to us while initiating a food product in china is the China Food and Drug Administration (CFDA). In specifically the General Administration of Quality Supervision, Inspection and Quarantine. They are the governmental agency that oversees the quality of products being manufactured and imported within China’s border. These two agencies and the rules which they enact should be referred to before any business decision is made.
Chico Pops will be operating under the general commerce Automatic Import License.  Automatic import license allows for importation without restriction on quantity, however there is governmental oversight and regulation that must be followed regarding product quality (fas.usda.gov). The China Food and Drug Administration (CFDA) writes and enacts regulations, in association the Food and Safety Commission (FSCO), these laws dictate food and safety regulations as well as protect consumers (Cite)
Food and safety laws have a system of Bad Records, established by the General Administration of Quality, Inspection, and Quarantine (fas.usda.gov). This entity operates on a three-strike system that encompasses monitoring production, exportation, and importation – a strike will be received for breaching any code associated with the creating, transporting, and distributing our product (fas.usda.gov). China requires absolute transparency during the production and manufacturing stages. As this is where quality and methodology can be inspected with the greatest accuracy.
The General Administration of Quality, Inspection, and Quarantine set up Good Manufacturing Practices, which are bylaws that describe the regulations and oversight required by the producer of a foreign good (fas.usda.gov).  If there are any deviations evident facility from the Good Manufacturing Practices Chico Pop will be held liable. A strike can also be levied for lack of proper documentation during importation to China and transportation by professional buyers (fas.usda.gov). It is imperative to have a trusted business relationship within China, allowing Chico Pops to mitigate exposure to potential lawsuits.
Customers are protected by labeling laws enforced by the agencies referred to previously.  Labels must include all the following to comply with China’s regulatory policy: name, specification, net content, and date of production; Table of ingredients or formulation; Producer name, address and contact information;  Shelf life;  Code of product standard(s); Storage requirements; Generic name of the food additives as used in the national standard; Production License Number; and Other information that must be indicated in accordance with applicable laws, regulations, and food safety standards (fas.usda.gov).
IV. Executive summary (Mandatory) SHANT
Based on your analysis of the market, briefly summarize (one-page maximum) the major problems and opportunities requiring attention in your marketing mix, and place the summary at the front of the report.
References
“Garrett Popcorn Shops | Gourmet Popcorn Made in Chicago.” Garrett Popcorn Shops | Gourmet Popcorn Made in Chicago, www.garrettpopcorn.com/.
Marketing 477 | International Marketing | Spring 2018
International Marketing Plan:
The Implementation of Chico Pops into Hong Kong
Paper 2: International Marketing Plan
I. The Marketing Plan
A. Marketing objectives
Chico Pop’s marketing strategy consists of selling their products online, contracting their products with large companies such as stadiums that host sporting events and selling through retailers. Chico Pop’s target markets for distributing the product in Hong Kong consists of two main audiences: families and retailers and wholesalers.
Chico Pop has a gross average sales forecast of $10,000 a month in order to maintain an annually gross $120,000. Over five years, the company should increase their annual sales with the strategic advertising tactics. The goal is to have yearly 4% increase of sales. In year two, sales would increase monthly by $416; in year three, sales would increase monthly by $432.64; in year four, sales would increase monthly by $449.95; in year five, sales would increase monthly by $467.94.  With an estimated gross income of  $145,998.40 by the end of fiscal year five.
Chico Pops requires a cost of capital at 22%. Therefore, year one’s projected net income is $26,400; in year two, sales will increase to $27,456; in year three sales will increase to $28,554.24; in year four, sales will increase to $29,696.41; lastly, in year five sales will increase by 30,884.28. After year five, Chico Pops expects their net sales to reach $140,383.08.
B. SWOT Analysis
Strengths – Consumers in Hong Kong consist of various demographics, which Chico Pops is able to target in this new market. Chico Pops has strength in allowing for multiple marketing strategies to be developed and for a larger market size to be captured. It is a newer snack food idea being introduced into Chinese culture, giving the brand the advantage of determining how and where they want to tell the consumer to enjoy their product. For example, many US consumers of popcorn enjoy the snack food at movie theaters or give tins of it as a gift during the holidays. Chico Pops is able to determine what methods of purchasing and consuming their product will most appeal to their target markets.
Weaknesses – In implementing this product into Hong Kong successfully, Chico Pops will face the challenge of introducing a newer food into the the Chinese snack food industry. Popcorn is not a prevalent product in Chinese culture, it is a highly Americanized product. The challenge will be in proving to their consumers that they should buy this product, and effectively communicate how it is different from other snack foods.
Opportunities – Although popcorn is a newer snack food concept being introduced into Chinese culture, Chico Pops will have an opportunity to educate consumers about the product and set the circumstances for where and when they should want to consume the product. There is ample room for growth in this new market of snack foods, especially that of gourmet popcorn.
Threats – Entering a new market alway poses barriers to entry and there are many direct competitors in the snack food industry. There is at least one established gourmet popcorn company in Hong Kong: Garrett Popcorn. While popcorn is not a huge phenomenon in Hong Kong yet, there is a niche market for the snack food that has opportunity to be expanded with the right marketing tactics. Given there is an established popcorn brand in Hong Kong, there may be more resistance to embracing the Chico Pops brand over Garrett Popcorn.
C. Product Adaptation or Modification
Core component – Chico Pops is a quick and enjoyable snack food that is extremely versatile. With many established flavors and the potential to expand them The product is sold locally in the US in 3 oz packages for $3 per bag. The company proudly advertises their products as non-gmo, gluten free, with no artificial flavors, additives or preservatives. These core components of Chico Pops will translate easily into the Hong Kong market, specifically to the target market of families that tend to be more health-conscious.
Packaging Component – In order to cater to our target markets in Hong Kong, the product will be adapted from bags into tin packaging. This will enable to product to be sold in larger quantities if wanted, and will be offered in various sizes for the different demographics targeted. This will obviously affect the price since 3 ounces is a  Since customizable packaging has proved a successful venture for competitors in both Hong Kong and the US, Chico Pops tin packaging will also be able to be customizable online.
Support Services Component – No repair or maintenance will need to be made available to consumers for this product, but we will have to have nutrition facts, instructions for consumption and safety warnings that meet Hong Kong’s regulations for food safety. The labeling on the packaging will need to include a choking hazard warning for children three years or younger.
Branding for International Marketing – Chico Pops translated into traditional Chinese language (Cantonese) in characters is represented as 奇科流行音乐. We plan on implementing these characters onto the product packaging, though it will not be the main feature. “Chico Pops” will be in larger lettering in order to market the product as an American snack food. While the majority of the packaging will be in Cantonese, the branding will be in English. Through marketing the product toward Chinese consumers using English, there is an appeal of buying an American product.
Product Specifications – Seasonal packaging will be available for Chico Pop consumers, following Chinese trends and culture. For example, packaging featuring the Chinese New Year zodiac animal will be a line of packaging introduced in celebration of Chinese New Year. Packaging for other holidays such as Christmas or Halloween could be easily implemented if consumers respond positively to the new packaging.
D. Promotion mix: Advertising (Mandatory & Important)
Advertising campaign objectives and/or themes for the launch
Target audience—demographic, geographic, psychographic, behavioristic, benefit-seeking and socio-economic criteria/information for your target audience for this specific campaign
Positioning and/or selling points of your product
Media planning
Describe national and/or local channels which fit customers and characteristic of your product in your chosen international market.
Roughly map-out your media planning for the first 6 months.
E. Promotion mix: Sales promotions & Personal selling (Item #2) JOE
Objectives – Major retailers, Corporations, Families, Tourist, Movie Theatres
Coupons – Social Media coupons and advertisements / Partner with major retailers using promotional offers
Premiums – Animal of the year toys / Special packaging
Costs – Social Media pay for ads / Commercial costs / Branding and partnership costs
F. Channels of distribution (microanalysis)
This section presents details about the specific types of distribution in your marketing plan.
Retailers (Item #4)
Type and number of retail stores
Retail markups for products in each type of retail store
Methods of operation for each type (cash/credit)
Scale of operation for each type (small/large)
Wholesale middlemen (Item #5)
Type and number of wholesale middlemen
Markup for class of products by each type
Methods of operation for each type (cash/credit)
Scale of operation for each type (small/large)
II. Marketing budget (Item #7)
Selling expense
Advertising/promotion expense
Distribution expense
Product cost
Other costs
III. Resource requirements (Item #8)
Finances
Personnel
Production capacity
IV. Executive Summary (Mandatory)
After completing the research for this report, prepare a one-page (maximum) summary of the major points of your successful marketing plan, and place it at the front of the report.

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