Entering Chinese Market with California Organic Food
Rapid development of living standards and organic agriculture have launched a large market of organic food in China. It is anticipated that Chinese demand for organic food will grow substantially in the observable period (Sheng et al., 365). In addition, the food scandals which took place several years ago have raised an important question of the quality of food. The contamination of products with formaldehyde or arsenic and cooking in recycled oil collected from sewer have caused large mistrust to local food retailers among the consumers in China. The food safety became a topical issue among the consumers who appreciate their health and can allow to protect it (Duggan, n.p.). The growing amount of people are perceiving Western products as those being much safer, which raises market opportunities for their export into China, and makes this marketing niche very attractive for the Western companies, including American.
In the United States, California is one of the largest manufacturers of the organic food. The legislation regulating this sector, such as federal Organic Foods Production Act of 1990, and the California Organic Products Act of 2003, are strictly monitored by the Organic Program of California Department of Food and Agriculture (CDFA, n.p.). It ensures the highest quality of local products and makes them suit all necessary certification.This international marketing entry strategy plan is aimed at evaluating the opportunities of the organic food from California entering Chinese market. The plan will describe a company which is going to enter the market, its orientation and positioning, determine potential marketing opportunities and target audience. The plan will elaborate the features of product positioning and modifications, strategies of pricing, distribution and promotion, and present the analysis of success factors and possible marketing constraints which may arise in the course of action.
A company which is planning the entry is “California Health Green” (or CHG), a producer of organic food specializing on the upper middle class customers. During the last year CHG is actively entering foreign developing markets, targeting the expatriate workers and high-income local citizens. The company positions itself as a producer and retailer of qualitative organic food, where quality equals the price. The modifications of CHG product lines include the products for higher middle class and a line of the exclusive luxury products. Due to the growth of domestic competition in the US, along with the high demand in the organic food sector in developing countries, the overall orientation of company is slowly shifting towards the work on the foreign markets.
The company is not the largest one in the sector, however it works with the farms from all over the state of California. The number of employees in the US and abroad is about 2000 people (of whom 1500 are US citizens). CHG has launched its business in India and Sri Lanka, and now it is planning to enter the Chinese market.The major competitive advantages of CHG in its sector are the provision of the full circle of products …