International Marketing

Miyoko Anandasiri (CB005187)
ASIA PACIFIC INSTITUTE OF INFORMATION TECHNOLOGY

IN COLLABORATION WITH
STAFFORDSHIRE UNIVERSITY UK
BA (Hons) in Business Management/

BA (Hons) in International Business Management
Individual Assignment
BLB10186-3 International Marketing
Prepared By
HF15A1IBM
Date of Submission
02nd February 2016
Instructor
Dr. Prasad Neelawela
Submitted in partial fulfillment for the degree of
Bachelor of Arts (Hons) in Business Management
Word Count: 2648
MARKING CRITERIA
MARKS % OBTAINED
Key Considerations
/ 30
Market Entry Strategy
/ 20
Marketing Mix
/ 40
Report Writing, Research & Referencing
/ 10
TOTAL (100%)
Acknowledgement
I would like to express my special thanks of gratitude to my lecturer Dr.Prasad Neelawela
who without his help and guidance this project would not have been completed. Also, my other
lecturers who helped me in a lot of ways to complete this assignment.
Id, also like to show my gratitude to my families and friends for the immense support
given and also all who contributed in one way or the other in the course of the project.
Finally, I am responsible for any errors that remain in this dissertation.
ii

Executive Summary
Mlesna Tea Manufacturing Company is a company started up by a young team of experts in
1983 with a passion for quality. They created packaged tea and innovated creative ways to
attract the connoisseurs of tea into the world of exclusive teas. While doing that created special
market for value added teas.
Today with 20 years of experience, more than 3000 different products and a permanent staff of
more than 350 people, Mlesna is still looking into expanding their company. The promise that
Mlesna has given to the people is Naturally the Best and with that they have decided to launch
a new personal care product from their Ayurvedic range.
This report will focus on the key considerations of the personal care industry, what to consider
when entering an international market and finally provides a market development plan which
will be created on how to launch the new product into the intended international market, which
is China.
The main findings of this report is that would be very beneficial if Mlesna launches their new
Ayurvedic oil in the Chinese market.
iii
Table of Contents
1.0
Introduction ...................................................................................................................................... 1
2.0 Key Considerations.................................................................................................................................. 2

2.1 Analysis on the Personal Care Industry............................................................................................... 2
2.2 Prospective countries.......................................................................................................................... 4
2.2.1 Prospective Country No. 1 - China ............................................................................................... 4
2.2.2 Prospective Country No. 2 Australia ......................................................................................... 4
3.0 Analyzing Prospective Countries ............................................................................................................. 5
3.1 PESTEL Analysis ................................................................................................................................... 5
3.1.1 PESTEL Analysis for China............................................................................................................. 5
3.1.2 PESTEL Analysis on Australia ........................................................................................................ 6
3.2 CAGE Distance Framework ................................................................................................................. 8
3.3 Entry Strategies to China................................................................................................................... 10
4.0 Market Development Planning ............................................................................................................. 12
4.1 Segmentation, Targeting and Positioning ......................................................................................... 12
4.2 Marketing Mix ................................................................................................................................... 16
4.2.1 Product ....................................................................................................................................... 16
4.2.2 Price ........................................................................................................................................... 18
4.2.3 Place ........................................................................................................................................... 21
4.2.4 Promotion .................................................................................................................................. 23
5.0 Conclusion ............................................................................................................................................. 24
Reference List.............................................................................................................................................. 25
Appendix ..................................................................................................................................................... 27
iv

List of Tables
Table 1: 12Cs Framework.............................................................................................................................. 3
Table 2: PESTEL Analysis for China ........................................................................................................... 6
Table 3: PESTEL Analysis of Australia ....................................................................................................... 8
Table 4: CAGE Framework for China, SL and Australia ............................................................................. 9
Table 5: Market Entry Strategies ................................................................................................................ 12
Table 6: Market Segmentation .................................................................................................................... 14
Table 7: Target Marketing .......................................................................................................................... 16
Table 8: Marketing Considerations ............................................................................................................. 17
Table 9: Company Level Factors ................................................................................................................ 19
Table 10: Country Level Factors ................................................................................................................ 20
Table 11: Market Related Factors ............................................................................................................... 21
Table 12: Place Strategies ........................................................................................................................... 22
Table 13: Promotional Strategies ................................................................................................................ 23

List of Figures
Figure 1: Ansoff's Matrix ............................................................................................................................... 1
Figure 2: Ayurvedic Brands in SL ................................................................................................................... 2
Figure 3: CAGE Framework ......................................................................................................................... 8
Figure 4: Market Entry Strategies ............................................................................................................... 10
Figure 5: Segmentation Process .................................................................................................................. 13
Figure 6: Market Targeting ......................................................................................................................... 15
Figure 7: Product Levels ............................................................................................................................. 17
Figure 8: Channel of Distribution ............................................................................................................... 22
vi

Abbreviations
PESTEL Political, Economic, Socio-cultural, Technological, Environmental and Legal factors
IPs Internet Protocols
CAGE Cultural, Administrative, Geographic and Economic Differences
SA Southern Australia
SAFTA - South Asian Free Trade Area
SAARC - South Asian Association for Regional Cooperation
FTA Free Trade Agreement
ASEAN Association of South East Asian Nations
EU European Union
NAFTA - The North American Free Trade Agreement
SL Sri Lanka
vii
1.0 Introduction
The tea industry in Sri Lanka is a large industry which occupies a hefty market share. There are
many companies within it, involved in import and export. Tea was one of the main exports in Sri
Lanka back in the day and up to this day, Sri Lanka is stood out for their tea production. A
company manufacturing tea diversifying into another industry could be considered to be
significant and many avenues could be considered for it. As Ansoff (1957) introduces his growth
strategies in his matrix, diversification is known to be a significantly risky strategy.
Diversification is a corporate strategy which includes a company entering a new market or
industry in which they are not currently operating in, whist also creating a new product for that
new market. The figure below shows Ansoffs Matrix:
Figure 1: Ansoff's Matrix
Ansoff (1957) explains that the other strategies are based around the same technical, financial
and merchandising resources used for the product line, whereas diversification usually
necessitates a company to acquire new skills, techniques and facilities. This is more risky as the
company has no experience in this new field and is unsure of whether the product will be
successful.
The tea and the Ayurvedic industry are not new concepts to the Sri Lankan market. Many
Ayurvedic brands, specializing in the personal care industry, already exist in the local markets,
varying from shampoos, fragrances etc.
Figure 2: Ayurvedic Brands in SL
This report will focus on a tea manufacturing company diversifying into the personal care
market, to specify in their Ayurvedic range to be introduced in an overseas market. It will focus
on the main factors given below:
The considerations that should be made during the intention of entering a foreign market
The key aspects around internationalization and crossing the border for market
development, which need to be looked into when deciding how to enter the market.
A plan for the company to consider on market development (4Ps) for the intended
country, industry and market.
2.0 Key Considerations

2.1 Analysis on the Personal Care Industry
The personal care industry can be analyzed using the 12Cs. According to Doole and Lowe
(2002) the 12C framework is an environmental analysis that can be used to identify some of the
major inputs that an international marketing system should contain. In aid of achieving the
objectives of this report, the author will be carrying out a 12C analysis for the personal care
industry.

Factors
Justification on the Ayurvedic Personal
Examples
Impact
Care Industry
Country
Concentration
Commitment
Channels
Communication
A thorough knowledge on the external

environment of the international market
thats going to be entered.
The geographical spread where the
Ayurvedic personal care products will be
sold.
The trade incentives and barriers which are
present for the Ayurvedic personal care
product to access the market
The decisions about how the products are
going to be distributed and the role of the
intermediaries from Sri Lanka to the new
market
The methods on how the new product is
going to be promoted
Capacity to Pay
The most suitable price of the product
Choices
The other Ayurvedic personal care

products available in the new market
Consumption
The market share of the Ayurvedic

Personal Care products in the new market.
The exchange rates of the countries chosen
to diversify into.
The legal obligations entitled with the
diversification.
Currency
Contractual
Obligations
Caveats
The factors that launching the product in

the new market should be aware of
The characteristics of the country and the
purchasing behavior
Culture/
Consumer
The policies and practices

present
High
Within the main cities or

towards the suburbs as well.
Medium
Custom tariffs
Export/ Import barriers
High
The purchasing behavior

The coverage of the
distribution costs
Medium
Which media is to be used

(advertisements, radio,
posters, flyers etc.)
The pricing methods to be
used. The costs that are
included within setting the
price
The competitive strengths and
weaknesses. Setting a
competitive price.
The threat of substitutes in the
in industry
The stability of the currency.
Low
The insurance related policies

associated with exporting of
the products
The competitors products
Medium
Diversity of the cultural

groups.
Medium
behavior
Table 1: 12Cs Framework
Source: (Doole and Lowe, 2002)
Medium
High
Medium
Medium
Medium
2.2 Prospective countries

This assignment will focuses on two countries for the intention of launching the new Ayurvedic
personal care product in it. The countries were chosen based on many factors, which will be
further discussed within the course of this report.
2.2.1 Prospective Country No. 1 - China
China is a nation which is rich in their culture, they have many religions some of them very
similar to the ones in Sri Lanka, and based on the research done. Herbal products are not a
concept which is completely new to their country. They produce herbal products using their own
natural resources and also tend to import and export some of them. The new Ayurvedic product
being launched in China would fit in with the current products available, however for it to stand
out differentiation strategies would have to be used.
2.2.2 Prospective Country No. 2 Australia
It is known that many Sri Lankans mostly tend to migrate to Australia and happen to go there for
education purposes. The census recorded in 2011 showed a population of 86,413 Sri Lankans in
Australia, which is an increase of 38.8% from the 2006 Census (Statistics.gov.lk, 2016).
Launching the new product in Australia would help the citizens as usually these are products that
are being personally brought by the consumers. If the products were available in the current
country it would be more convenient for the consumers.
3.0 Analyzing Prospective Countries

3.1 PESTEL Analysis
Analyses of the prospective countries need to be carried by identifying the external factors within
their environment that could have an impact on their operations. The tables below show the
external factors that affect these countries. The impact is rated as positive, neutral and negative
based on how its going to affect the launching of the new product in the intended country.
3.1.1 PESTEL Analysis for China
Factors
Political Environment
Economic Environment
Social Environment
Technological Environment
Explanation
Impact
-Stable political environment

(-2.5 weak; 2.5 strong) -0.46
(2014)
-China enacted laws on new
residence permit to facilitate
migration
-Tariffs are high, but on a
decreasing slope
-Gross Domestic Product:
USD 10.35 trillion (2014)
-Inflation: 1.6% (2016)
-GDP Growth: 1.6% (2015)
Positive
-Unemployment Rate: 4.05%

(2016)
-Adult literacy rate: 95.1%
(2008-2012)
Positive
-Per Capita Disposable

Income: $229 (2014)
-In 2006, the Science &
Technology agreement was
extended by 5 years
Positive
Neutral
Positive
Positive
Positive
Neutral - Although just 5% of

Chinese adults are illiterate,
that still shows an estimated
54 million people from age 15
and above are unable to read
and write a simple sentence
Positive
Neutral

-Spark Plan was introduced
in 1986 to enhance IT in rural
areas
-In 1996 Silicon Valley was
built with an investment of
CNY101.5 billion
Physical Environment
Legal Environment
-In 2000, it was found that

20% of poultry agricultural
products contained excessive
levels of contamination
-Chinas reliance on coal for
its energy needs have made
its air quality among the
worst in the world.
Positive
Positive
Negative
Negative
-When a new business is to be Negative

launched in China, to get
government approval it takes a
long time, as the legal work
takes time.
-The income tax law of China Neutral
for Enterprises with foreign
investment and foreign
enterprises
Table 2: PESTEL Analysis for China
Source: (Worldbank.org, 2016), (Tradingeconomics.com, 2016), (UNICEF, 2016), (Council on

Foreign Relations, 2016), (TheGlobalEconomy.com, 2016)
3.1.2 PESTEL Analysis on Australia
Factors
Justification
Impact
Political Environment
-As it is a liberal-capitalistic
democracy, the government
keeps interfering substantially
in the economy
-Political Stability (-2.5 weak;
2.5 strong) 0.99
-Favorable tax system
Neutral
Positive
Positive

Economic Environment
Social Environment
Technological Environment
Physical Environment
Legal Environment
-Gross Domestic Product:

USD 1.45 trillion (2014)
-Inflation: 1.7% (2016)
-GDP Growth: 0.9% (2015)
Positive
-Unemployment Rate: 5.8%

(2016)
-Adult literacy rate: 15-24%
(2012)
-Disposable Income: $998
(2014)
-Gross expenditure on R&D
was $30 billion in 2010-2011.
Positive
Positive
Neutral
Neutral
Positive
Positive
Positive
-Govt. grants and funding
programmes are available for
companies to develop and
commercialize their IPs.
Positive
-Household internet access
had increased from 1.1 million
in 1998 to 4.7 million in 20052006
-Waters and coastlines around
Australia are protected from
Positive
waste and pollution dumped at
sea by the Environmental
Protection Act 1981.
-Some of the local issues
involve: soil salinity, logging
and wood chopping
(deforestation)
Negative
-The legal system is based on

Australians and nonAustralians to be treated
equally before the law and
safeguards exist.
Positive

-ACCC administers and
enforces a national statutory
framework to ensure that
trading is fairly done by
consumers and businesses.
Positive
Table 3: PESTEL Analysis of Australia
Source: (Tradingeconomics.com, 2016), (Australia.gov.au, 2016), (Austrade.gov.au, 2016),

(TheGlobalEconomy.com, 2016)
3.2 CAGE Distance Framework
Cultural
Geographic
CAGE
Administrative
Economic
Figure 3: CAGE Framework
The CAGE Distance Framework identifies the cultural, administrative, geographic and economic
differences or distances between countries that could be compared when creating international
strategies. It provides a broad view on distance and offers a different perspective on the
geographic location with the risks and opportunities which are associated with the global
arbitrage. It may also be used to understand patterns of trade, capital, information and people
flows. As the objective of this report is to identify which country out of the two counties

prospective is most suitable to launch the new Ayurvedic personal care product into, the CAGE
framework will be used to compare and contrast the two countries and arrive at a decision.
Factors
China
Cultural Differences/
Distance
Language/ s: Mandarin
Religion/ s: Han, Tibetan,
Southern Buddhism,
Confucianism, Taoism,
Islam and Christianity.
Language/ s: Sinhalese,
Tamil, English
Religion/ s: Buddhism,
Christianity, Catholic,
Islamic,
Language/ s: English
Religion/ s: Christianity,
Catholic, Anglican
Administrative
Differences/ Distance
National Currency:
Renminbi
Trading Blocs: A FTA
between the ASEAN and
China came into effect,
creating the worlds 3rd
largest free trade bloc
behind the EU and the
NAFTA.
National Currency: Sri

Lankan Rupees.
Trading Blocs: The
SAFTA is an agreement
reached at the 12th
SAARC summit which
includes a signed
framework agreement
on SAFTA to reduce
custom duties of all
traded goods by 2006
Geographic
Has a variety of
temperature and rainfall
zones, including
continental monsoon
areas.
In winter most areas are
cold and dry. In summer
areas are hot and rainy
Square Ft: 9,388,211.0
Exchange Rate:
CNY 1 = Rs. 21.8
Climate is tropical with

wet and dry seasons.
Upland areas are cooler
and more temperate and
coastal areas are
warmer with average
temperatures.
Square Ft: 62,710.0
National Currency:
Australian Dollar
Trading Blocs:
Australia deals with
their trade issues
through their bilateral
and multilateral
negotiation of free trade
agreements and the
establishment of trading
blocs.
The temperature in
Australia can range
from below 0 in the
snowy mountains in SA
to extreme heat in the
northwest of the
continent.
Square Ft: 7,682,300.0
Economical
Sri Lanka
Exchange Rate:
Rs. 1 = CNY 0.0457287
Rs. 1 = AU$ 0.00983005
Australia
Exchange Rate:
AU$ 1 = Rs. 101.6
Table 4: CAGE Framework for China, SL and Australia
Source: (Roberts, 2016), (Worldtravelguide.net, 2016), (Australia.gov.au, 2016),

(Travelchinaguide.com, 2016), (Xe.com, 2016), (Fernandopulle, 2014)

The CAGE framework was used to compare and contrast the two prospective countries to select
most country appropriate nation for Mlesna to launch the new product to. Based on the above
analyses done, the PESTEL and CAGE frameworks show that Chinese market is the most
suitable country to enter. This was decided China and Sri Lankan are both rich in their culture
and traditions, with similar religions available. Also, some herbal products are available in
China, however not many traditional Ayurvedic products are available. Therefore, it would be a
new concept for the market. Although a lot of the Sri Lankan population is in Australia and this
product might be useful there, there are many Sri Lankan shops with these products already
existing in the market. In China, on the other hand, these products will be a completely new to
market where no one has exported at the moment.
3.3 Entry Strategies to China

Different market entry methods could be used when entering a new market. There are advantages
and disadvantages with each of these market entry methods and it is critical in the decision
making process to include about the firms assessment of the cost and risk associated with each
method and the level of involvement allowed by the government. There is no ultimate market
entry strategy and its important to know that different firms are allowed to adopt different
market entry methods to enter the same market and/ or by the same firm in different markets.
There are direct and indirect entry strategies, this report will be focusing on the direct market
entry strategies.
Company Acquisitions
Joint Ventures
Levels of
Involvement
Franchising
Export
Piggyback Operations
Figure 4: Market Entry Strategies
10
Market Entry
Strategies
Company
Acquisitions
Joint Ventures
Franchising
Exporting
11
Explanation
For some western companies, as the
pressure to produce short term
profits is high, the speed of the
market entry is essential and
therefore this can be carried out by
acquiring an existing company in
the market.
Advantages (+) and

Disadvantages (-)
(+) Gives immediate access to

trained labor force, existing
customer and supplier contacts,
recognized brands etc.
(-) The acquiring company might
take over demotivated labor
force, a poor image and
reputation and out of date
products and processes.
For some companies the best way
(+) Companies have direct
of market entry is shared ownership participation in the local market,
of a specially set up new company
and therefore gain a better
for marketing and/ or
understanding of how it operates.
manufacturing.
(-) Companies involved the joint
venture can often have different
aims and objectives which could
cause disagreements.
Franchising is a when the franchisor (+) Opportunity to build a greater
allows the franchisee to market
market coverage and obtain a
goods and services with their
steady, predictable stream of
brandings, trademarks and products income without excessive
in return for a franchise fee.
investment.
(-) different local cultures affect
the franchise operations . For e.g.
The beef Big Mac is not
available in Mc Donalds India.
If the company want to be more on (+) Greater control over the
a long term basis, they should be
selection of markets and
more proactive and become directly improved feedback about the
involved in the process of
performance of individual
exporting.
products.
(-) The direct investment
necessary is considerable high as
the whole of the marketing,
distribution and administrative
costs should all be incurred by
the company.

Piggyback
Operations
An established international
distribution network of one
manufacturer using to carry the
products of a second manufacturer.
(+)Economies of Scale:
increasing their revenue without
incurring additional costs on
marketing, distribution etc.
(-) The terms and conditions of
the marketing arrangements need
to be properly though out as the
company might be locked into an
arrangement that is
unsatisfactory to them.
Table 5: Market Entry Strategies

Listed above are certain Market entry strategies that could be used for Mlesna to launch into the
Chinese market. All of them present advantages and disadvantages, however, after the analysis
done the most suitable strategy to carry out this operation is exporting the product. Exporting the
product from Sri Lanka to China would be beneficial as the quality of the product wouldnt
change, the manufacturing is home based and therefore the product wouldnt change. It also
gives an opportunity to understand and learn about the overseas market before investing in bricks
and mortar. The launch of an Ayurvedic Personal care product is a new concept for China;
therefore, it is better to test the waters before going all in. Exporting is the best way as a few
number of products can be exported at first and based on the demand, further decisions can be
made.
4.0 Market Development Planning

According to Kotler et al. (2011), a marketing strategy consists of specific strategies for target
markets, positioning, the marketing mix and marketing expenditure levels. This helps the
company outline how they intend to create value for their products.
4.1 Segmentation, Targeting and Positioning

Companies need to ensure that all their customers are satisfied in the way they prefer.
Segmenting, targeting and positioning help companies serve all customers effectively.
12

Market segmentation is when a market is divided into smaller groups with distinctive needs,
characteristics, or behavior that might require crafting separate market strategies and mixes.
(Kotler et al., 2011)
The segmentation process is as follows:
Define the
market for the
organization
Create market
segments
Evaluate the
segments on a
set criteria
Seletct target
market/s
Evaluate the
attractiveness
of the
segments
Construct
segment
profiles
Develop
positioning
statement
Develop and
implement
marketing mix
Review
performance
Figure 5: Segmentation Process
Source: www.segmentationstudyguide.com
The Major segmentation variables for consumer markets consist of geographic, demographic,
psychographic and behavioral. The below table shows the market segmentation for the new
product that is going to be launched.
13

Segmentation
Base
Segmentation
Variable
Geographic
Region
Density
Demographic
Age
Income
Gender
Psychographic Social Class
Lifestyle
Behavioral
Segment 1Gen X (1960

1980)
North Western
province, Southern
provinces, western
province, central
province and North
East Province.
Segment 2
Gen Y (1980s
early 2000s)
North Western
province, Southern
provinces, western
province, central
province and North
East Province.
Urban / Suburban/
Rural
56 - 36
Varies according to
the profession
Urban / suburban
Male/ Female
Upper/ Middle
Class
Actualizes/
Achievers
Personality
Authoritarian
Usage
Purchase
frequency
Purchase
behavior
High
Often
For the purpose of
an oil, head
massage
36 - 16
Part time job while
doing higher studies
or introductory
salary. (Rs. 15,000
35,000) or varies
according to
profession.
Male/ Female
Upper/ Middle Class
Experiences/
actualizes
Ambitious/
Gregarious
High
If need is present
For the purpose of
an oil, head massage
Segment 3
Gen Z (Early
2000s 2025)
North Western
province,
Southern
provinces, western
province, central
province and
North East
Province.
Urban/ Suburban
16 and below
Schooling or
allowance from
parents
Male/ Female
Upper/ Middle
Class
Fulfillers
Active Lifestyle
Medium
Parents would
usually purchase
If parents want
them to apply
Table 6: Market Segmentation
Companies have to decide which markets they should enter and in what ways they can serve
them with the best. Marketing Targeting is when the firm evaluates the various segments and
decide how many and which segments it can serve best (Kotler et al., 2011). After evaluating the
segments based on the right size and growth characteristics, the target market will be chosen.
14

The target market is a set of buyers who share similar or common needs and characteristics that
the company has decided to serve.
Mlesna has to decide which segment they are going to cater to. This should be done taking into
consideration the international market and that it is an exported personal care product. When
selecting a target market segment there are several strategies that could be used.
For Ben & Jerrys Differentiated marketing will be used as Unilever will be targeting several
market segments and propose different offers for each of them. A company to target broadly to
targeting narrowly (as shown in figure 6). Mlesna could use Concentrated Marketing to target
their market segments as it is a market strategy in which a firm goes after a large share of one or
a few segments or niches. The personal care industry in China is large however the Ayurvedic is
a niche market.
Undifferentiated
(mass) marketing
Differentiated
(segmented)
marketing
Micromarketing
(local or
individual
marketing)
Concentrated
(niche)
marketing
Targeting broadly
Targeting narrowly
Source: (Kotler et al., 2011).

Figure 6: Market Targeting
The table below shows the segments compared against each other to find out the highest
weightage.
Factor
Market
Size
Attractiveness
Growth Rate
Expected Profitability
Competitors
Competitors
New entrants to market
Substitutes products
Power of Buyers
Power of Suppliers
Company
Company goals
15
Market
Weightage
8
7.6
7.3
6
7.6
6.6
7.3
7.6
7.6
Customer Profile
Gen X
Gen Y
9
7
8
8
6
8
8
8
8
8
8
7
6
8
5
6
8
8
Gen Z
8
7
7
6
7
7
7
7
7

objectives
Competitive advantage
7.6
Total
9
80
6
69
8
63
Table 7: Target Marketing
As Generation X population shows to be the most promising markets, Mlesna will be focused on
them.
After the segmentation process is complete and then the targeting, the product needs to be
positioned. The company needs to come up with a proposal on ways to differentiate for the
targeted segment. Product positioning is the positioning of the market offering in the minds of
the consumers (Kotler et al., 2011).
There are some competitors in the Chinese personal care industry. They are not Ayurvedic
products however; they are herbal personal care products. The importance is in the way the brand
is created in the consumers mind.
Potential positioning statement:
Were are rich in culture and tradition and we bring you closer to nature
4.2 Marketing Mix

4.2.1 Product
When it comes to the marketing mix there are certain decisions that need to be made, decisions
about the product are usually the first ones made. The decisions about the price, place and
promotion are influenced by the product. The product, as defined by Kotler et al. (2011), is
anything can be offered to a market for attention , acquisition, use or consumption that might
satisfy a need or a want. Mlesna is launching a new personal care product from their Ayurvedic
range into the Chinese market. From the research carried out, the company has decided that it
would be a better and profitable idea for Mlesna to launch a Ayurvedic hair oil into the market.
There are different herbal oils in the existing market, but not which is completely natural and is
Ayurvedic.
The Mlesna Ayurvedic Hair Oil can be considered as a consumer product as it is brought by final
consumers for personal consumption. Consumer products can further be divided into different
16

types of goods based on how customers go about purchasing them. The below table shows why
Mlesna Ayurvedic Hair Oil could be categorized further into a convenience good.
Marketing Considerations
Customer buying behavior
Price distribution
Promotion
Frequent purchase
Little planning
Low customer involvement
Relatively low
Mass promotion by the
producer
Table 8: Marketing Considerations
Source: (Kotler et al., 2011).
Figure 7: Product Levels
There are several product levels the company needs to focus on when it comes to launching a
new product in the Chinese market. Product planners need to make decisions about their
products on five different levels. When going through the levels, each level increases in
customer value.
The first level focuses on the core product, this includes the core benefit that the product
provides. Which in the case of Mlesna Ayurvedic Head Oil, is the oil that could be used for an
oil massage whenever the consumer is in the mood for it, or makes it a regular thing to be
17

applied on the hair for example every week, as the herbs in it bring many nutrients to the hair.
The next level consists of the basic product, this is the physical version of the product which is
offered to the customers. This is the Ayurvedic oil itself. The following level is the expected
product, these are the attributes that customers usually expect when agreeing to buy a product.
Some of these attributes could be:
Ayurvedic oil
Affordable
Comes in a convenient bottles where its easy to use and put away till next time.
The next level is the augmented product, this consists of the characteristics that help Mlesna
differentiate the Ayurvedic Oil from its competitors in the Chinese market:
Nutrients within the oil
The traditional value it brings
Natural ingredients
Finally the product levels consist of the potential product level. This encompasses all the
augmentation and transformation the product maybe capable of undergoing in the future. Mlesna
Ayurvedic Oil could be produced in China itself, as this way the costs incurred would be les and
therefore the price of the product could be reduced. (Jobber and Fahy, 2009)
4.2.2 Price
Price is an important aspect of the marketing mix as these decisions are made regarding the
revenue which will be received from the customers for their product. The price needs to be set
accordingly if not no profit or not enough will be produced and costs wont be covered. In
definition, price is the amount of money charged for a product or service, or the sum of values
that customers exchange for the benefits of having or using the product/ service (Kotler et al.,
2011).
18

4.2.2.1Factors affecting pricing
When setting a price in an international market, there are three factors that affect the decision.
Mlesna should focus on these factors when setting their prices for the new product that theyre
going to launch.
Company Level Factors (micro level)
Country Environment Factors (macro level)
Market Related Factors (macro level)
Company Level Factors
Factor
Description
Business Objectives
-To capture a market share of 25% by the

second quarter of 2027
-To increase profits and sales by 17% by the
year 2020
Marketing Objectives
-To introduce special discounts for consumers

buying in bulk by 2017.
-To improve product awareness through
different channels of media 2016.
Additional Resources
Warehouse costs and human resource costs

(recruitment, training and development etc.)
Regional Pricing Policy
China has an open policy and therefore the

home country can decide on the pricing
strategies
Product Positioning/ Brand
Making people aware of the brand Mlesna in

China, by for e.g. having tv advertisement and
billboards.
Table 9: Company Level Factors
19

Deciding on the pricing strategy that is going to be used for this assignment, the above table
comes into aid. There are different costs that need to be taken into consideration when deciding
the price, for example the warehousing costs and salaries. The pricing strategy that could be used
to launch this new product could be price skimming. This is where a high price is set for a new
product and layer by layer the price is skimmed to gain maximum revenues. The segments
willing to pay a higher price will purchase the product and then thereafter, the price will be
reduced to accommodate another segment. (Kotler et al., 2011).
Country Level Factors
Factor
Description
Tariff Barriers
-China has gradually loosened their foreign

trading system and has continued to reduce
administrative barriers to trade.
Government Regulations
China trades with many countries. With their

open policies it is somewhat less of a hassle
exporting to China.
Inflation
Inflation rate is at 1.6% (2016)
Exchange Rates
CNY 1 = Rs. 21.8.
Table 10: Country Level Factors
Source: (Standardsportal.org, 2016), (Research.hktdc.com, 2016)

Market Related Factors
Factor
Reason
Customer expectations
A main motivation factor for companies is

when the demand of their products increase.
Competitive Pricing
The prices of the competitors should be

analyzed very well when it comes to setting the
price of the Ayurvedic oil. It portraits an image
on your product when compared with the
20

competitors.
Industry Trends
The industry revenue has been growing at an

annualized rate of 12.2% in the last five years
to an estimated $19.9 million.
Brand loyalty
Mlesna is a very well-known brand in Sri

Lanka, however that same loyalty has to be
created in China as well.
Table 11: Market Related Factors
4.2.3 Place
The place is an important aspect as well when it comes to making decisions about the marketing
mix as this is the method as to how the product will be transported to customers. If its not
reached properly, even if the demand is present no revenue will be generated, as the product
wont be available in convenient locations. Clarke and Wilson (2009) defines place as the
distribution channel, the location or the method of getting the product/ service to the customer.
This place includes the location of the business, distributors etc.
The best decision for Mlesna to get their products over to their customers is by exporting it from
Sri Lanka to China. Since its a new product and a new concept for the market, the company
wouldnt know how the consumers would react to the launch of the product. Therefore, as
mentioned before in the different entry strategies, Mlesna could export the product directly
there, while having an agent and thereafter based on the reaction of the consumers to take future
action such as manufacturing the product in China itself.
21

Channel of Distribution
International Licenses
Mlesna Warehouses
Retailers
Consumers
Figure 8: Channel of Distribution
Place Strategies
Value Creation Chain
Location
Distribution Channel
Home Country
Produced and quality
management would be carried
out in SL.
Factories to manufacture the
products
Agents and suppliers
Distribution Channel
Partners
Point of Sale
Table 12: Place Strategies
22
Host Country (China)

Employee Training
Malls, cosmetic outlets

(centralized locations)
Direct export to the Mlesna
agent in China
Direct distribution channels
with expatriates and local
employees.
The agent distributes to
retailers in bulk and also to
directly to wholesalers

4.2.4 Promotion
According to Kotler et al. (2011), the promotion mix is the blend of promotional tools that the
company uses to persuasively communicate customer value and build customer relationships.
These tools could include advertising, sales promotion, personal selling etc.
4.2.4.1 Promotional Media
The most suitable method of media that Mlesna could use to advertise the Ayurvedic Oil is
television advertisements and billboards. This is because TV advertisement could be very eye
catchy, all customers would be able to understand as different tools will be used to create it, such
as videos, music and the effects of using the product could also be shown across to the
customers. Also, having a billboard put up near a highway or flyover would allow the message of
a new product being introduced into the market to be captured by a wide number of consumers.
An examples of what the billboard could look like is shown in Appendix 1.
Promotional Strategies
Promotional Objective
Home Country
To spread the brand name is
China to increase sales for the
newly launched product,
Ayurvedic Oil.
A strong and relevant budget

TV advertisements
Ayurvedic oil which is rich in
tradition and contains natural
nutrients which helps hair
growth and fights against hair
fall.
Promotional Budget
Media Mix
Message
Table 13: Promotional Strategies
23
Host Country (China)

To encourage and persuade
the consumers in China to buy
the new product.
5.0 Conclusion
Mlesna Tea Manufacturing Company is a company started up by a young team of experts in

1983 with a passion for quality. They created packaged tea and innovated creative ways to
attract the connoisseurs of tea into the world of exclusive teas. While doing that created special
market for value added teas. They had decided to launch a new personal care product from their
Ayurvedic range. This Management report was mainly focused on the following areas:
1.0 Key considerations that need to be analyzed before entering a new market
2.0 Market Entry Strategy.
3.0 Marketing mix for the new market.
Thereafter the key findings of this report considered of the following:
Section 1.0: After carrying out a PESTEL analysis and CAGE framework for the prospective
countries, it was found that the most suitable market to launch the new product was China.
Section 2.0: A critically discussion was done about the entry strategies of entering international
markets and exporting was found to be the best option.
Section 3.0: A market development plan was created to launch the Ayurvedic oil in the Chinese
market.
In conclusion, it can be stated that China is a market with potential for Mlesna to enter and
launch their personal care product from their Ayurvedic range.
24
Reference List
Austrade.gov.au, (2016). Australian business and environment laws - Austrade. [online]
Available at: https://www.austrade.gov.au/International/Invest/Guide-to-investing/Running-abusiness/Understanding-Australian-business-regulation/Australian-business-and-environmentlaws [Accessed 1 Feb. 2016].
Australia.gov.au, (2016). Our natural environment | australia.gov.au. [online] Available at:
http://www.australia.gov.au/about-australia/our-country/our-natural-environment [Accessed 1
Feb. 2016].
Clarke, G. and Wilson, I. (2009). International Marketing, London: McGraw-Hill Companies
Council on Foreign Relations, (2016). China's Environmental Challenge: Political, Social and
Economic Implications. [online] Available at: http://www.cfr.org/china/chinas-environmentalchallenge-political-social-economic-implications/p5573 [Accessed 31 Jan. 2016].
DOOLE, I. and LOWE, R. (2002). International marketing strategy. London: Thomson.
Fernandopulle, L. (2014). EU impressed with Lanka's economic growth. Sunday Observer.
[online] Available at: http://www.sundayobserver.lk/2014/04/06/fin01.asp [Accessed 1 Feb.
2016].
Jobber, D. and Fahy, J. (2009). Foundations of marketing. Maidenhead: McGraw-Hill Higher
Education.
Kotler, P., Kotler, P., Agnihotri, G., Armstrong, G. and Ehsan ul Haque., (2011). Principles of
marketing. Delhi: Pearson Prentice Hall.
Process, T. and Process, W. (2015). The Full STP Process. [online]
Segmentationstudyguide.com. Available at: http://www.segmentationstudyguide.com/stpprocess/full-stp-process/ [Accessed 02 Feb 2016].
Research.hktdc.com, (2016). HKTDC Research. [online] Available at: http://research.hktdc.com/
[Accessed 2 Feb. 2016].
Roberts, J. (2016). China and ASEAN create free trade bloc - World Socialist Web Site. [online]
Wsws.org. Available at: https://www.wsws.org/en/articles/2010/01/asea-j12.html [Accessed 1
Feb. 2016].
Standardsportal.org, (2016). Standards Used in China. [online] Available at:
http://www.standardsportal.org/usa_en/prc_standards_system/standards_used_in_china.aspx
25

Statistics.gov.lk, (2016). Department of Census and Statistics-Sri Lanka. [online] Available at:
http://www.statistics.gov.lk/ [Accessed 31 Jan. 2016].
TheGlobalEconomy.com, (2016). Australia Political stability - data, chart |
TheGlobalEconomy.com. [online] Available at:
http://www.theglobaleconomy.com/Australia/wb_political_stability/ [Accessed 1 Feb. 2016].
Tradingeconomics.com, (2016). Australia GDP | 1960-2016 | Data | Chart | Calendar | Forecast |
News. [online] Available at: http://www.tradingeconomics.com/australia/gdp [Accessed 31 Jan.
2016].
Tradingeconomics.com, (2016). China Unemployment Rate | 2002-2016 | Data | Chart | Calendar
| Forecast. [online] Available at: http://www.tradingeconomics.com/china/unemployment-rate
[Accessed 31 Jan. 2016].
Travelchinaguide.com, (2016). Chinese Language, Mandarin Learning, Chinese Characters,
Dialects. [online] Available at: http://www.travelchinaguide.com/essential/language.htm
UNICEF, (2016). Statistics. [online] Available at:
http://www.unicef.org/infobycountry/china_statistics.html [Accessed 31 Jan. 2016].
Worldbank.org, (2016). China Home. [online] Available at:
http://www.worldbank.org/en/country/china [Accessed 31 Jan. 2016].
Worldtravelguide.net, (2016). China Weather, Climate and Geography. [online] Available at:
http://www.worldtravelguide.net/china/weather-climate-geography [Accessed 1 Feb. 2016].
xAustralia.gov.au, (2016). Australian weather and seasons a variety of climates |
australia.gov.au. [online] Available at: http://www.australia.gov.au/about-australia/australianstory/austn-weather-and-the-seasons [Accessed 1 Feb. 2016].
Xe.com, (2016). XE Currency Converter - Live Rates. [online] Available at:
http://www.xe.com/currencyconverter/ [Accessed 1 Feb. 2016].
26
Appendix
At Supermarkets nearest to
you!!
Mlesna
Ayurvedic Hair
Oil
27
28
29

International Marketing

Diunggah oleh

Informasi Dokumen

Hak Cipta

Format Tersedia

Bagikan dokumen Ini

Bagikan atau Tanam Dokumen

Opsi Berbagi

Apakah menurut Anda dokumen ini bermanfaat?

Apakah konten ini tidak pantas?

Hak Cipta:

Format Tersedia

International Marketing

Diunggah oleh

Hak Cipta:

Format Tersedia

Miyoko Anandasiri (CB005187)

ASIA PACIFIC INSTITUTE OF INFORMATION TECHNOLOGY

BA (Hons) in Business Management/

Market Entry Strategy

Report Writing, Research & Referencing

Miyoko Anandasiri (CB005187)

Finally, I am responsible for any errors that remain in this dissertation.

Miyoko Anandasiri (CB005187)

Miyoko Anandasiri (CB005187)

2.0 Key Considerations.................................................................................................................................. 2

Miyoko Anandasiri (CB005187)

Miyoko Anandasiri (CB005187)

Miyoko Anandasiri (CB005187)

Miyoko Anandasiri (CB005187)

Figure 1: Ansoff's Matrix

Miyoko Anandasiri (CB005187)

Figure 2: Ayurvedic Brands in SL

2.0 Key Considerations

Miyoko Anandasiri (CB005187)

Justification on the Ayurvedic Personal

A thorough knowledge on the external

The most suitable price of the product

The other Ayurvedic personal care

The market share of the Ayurvedic

The factors that launching the product in

The policies and practices

Within the main cities or

The purchasing behavior

Which media is to be used

The insurance related policies

Diversity of the cultural

Source: (Doole and Lowe, 2002)

Miyoko Anandasiri (CB005187)

2.2 Prospective countries

Miyoko Anandasiri (CB005187)

3.0 Analyzing Prospective Countries

-Stable political environment

-Unemployment Rate: 4.05%

-Per Capita Disposable

Neutral - Although just 5% of

Miyoko Anandasiri (CB005187)

-In 2000, it was found that

-When a new business is to be Negative

Source: (Worldbank.org, 2016), (Tradingeconomics.com, 2016), (UNICEF, 2016), (Council on

Miyoko Anandasiri (CB005187)

-Gross Domestic Product:

-Unemployment Rate: 5.8%

-The legal system is based on

Miyoko Anandasiri (CB005187)

Table 3: PESTEL Analysis of Australia

Source: (Tradingeconomics.com, 2016), (Australia.gov.au, 2016), (Austrade.gov.au, 2016),

3.2 CAGE Distance Framework

Figure 3: CAGE Framework

Miyoko Anandasiri (CB005187)

National Currency: Sri

Climate is tropical with

Table 4: CAGE Framework for China, SL and Australia

Source: (Roberts, 2016), (Worldtravelguide.net, 2016), (Australia.gov.au, 2016),

Miyoko Anandasiri (CB005187)

3.3 Entry Strategies to China

Figure 4: Market Entry Strategies

Source: (Doole and Lowe, 2002)

Miyoko Anandasiri (CB005187)

Advantages (+) and