MKT 504 MKTG/Product Mgmt
Section I: Table of Contents
Market Forecast 3 Diagram
3 Product Proposal 4 Product Description 4 Country 4 Production Cost 4 Price 4 Promotion 5 Distribution 5 Marketing Plan
6 sPEST 7 sSWOT 8 sReferences 10
Basis for Market Forecast: (in this section discuss your basis for your forecast, how did you come up with your expectations for revenue for salary increase and for other overhead items)
Chart: (Insert your marketing chart here.) I’ve also attached a spreadsheet that demonstrates how to use formulas. DO NOT SEND YOUR EXCEL WORKSHEET AS A SEPARATE FILE; IT WILL BE REJECTED. Copy and paste your Excel chart here, then format and label in APA style.
Profit Estimates
Profit and loss forecast
Year One, Year Two, Year Three, Year Four, and Year Five
Revenues of $2,000,000.00, $260,000.00, $2,090,900.00, $2,341,808.00, and $3,512,712.00
$150,000.00 $154,500.00 $159,135.00 $163,909.05 $168,826.32 Plant Maintenance
Salaries per full-time equivalent (10) $550,000.00 $550,000.00 $566,500.00 $583,495.00 $600,999.85
$100,000.00 $100,000.00 $100,000.00 $100,000.00 $100,000.00 $100,000.00 $100,000.00 $100,000.00 $100,000.00 $100,000.00 $100,000.00 $100,000.00 $100,000.00 $100,000.00 $100,000.00 $100,000.00 $100,000.00 $100,000.00 $100,000.00 $100,000.00 $100,000.00 $100,000.00 $100,000 (.40)
$260,000.00 $260,000.00 $266,600.00 $273,398.00 $280,399.94
IT
$225,000.00 $236,250.00 $248,062.50 $260,465.63 $273,488.91
$400,000.00 $400,000.00 $400,000.00 $400,000.00 $400,000.00 $400,000.00 $400,000.00 $400,000.00 $400,000.00 $400,000.00 $400,000.00 $400,000.00 $
$100,000.00 $103,000.00 $106,090.00 $109,272.70 $112,550.88
Compliance
$20,000.00 $20,000.00 $20,000.00 $20,000.00 $20,000.00 $20,000.00 $20,000.00 $20,000.00 $20,000.00 $20,000.00 $20,000.00 $20,000.00 $20,000.00 $20,000
Subtotal $2,085,000.00 $2,216,000.00 $2,409,625.00 $2,628,991.25 $280,000.00 $294,000.00 $308,700.00 $324,135.00 $340,341.75
$2,877,655.94
Profit/loss ($85,000.00) ($156,000.00) ($318,725.00) ($287,183.25)
$635,056.06
Assumptions
Year One, Year Two, Year Three, Year Four, and Year Five
Revenue increased by 3% (15%).
12% growth 50% growth
Plant four salad greens. FT 0 0 3% increase
Salaries Benefits of Physical Therapy/Fringe (.40)
Rent Insurance Compliance in Information Technology
Salaries in administration
Proposal for a Product
Chocolate Milk Tea is the name of the new product I’ve chosen to launch. This product combines two of China’s most popular beverages: tea and chocolate milk. Chocolate milk tea is suitable for drinking at any time of day. It is a refreshing and appetizing beverage suitable for people of all ages. Approximately 93 percent of people buy milk tea at least once a week. Customers that drink milk tea are likely to return. That is why milk tea manufacturers must build client loyalty in order to increase recurring business. (2021 Consulting)
Country: It is designed for sale in China. Most Chinese individuals consume milk tea on a daily basis. Because of the mix of their country’s favorite ingredients, this beverage would sell well in China. Tea is considered China’s national drink, and it plays significant cultural and religious aspects. More than 6.6 billion kg of tea were consumed globally in 2021, with approximately one-third produced in China. (Ma, 2022)
Labor costs would be no more than $5 per hour throughout production. Manufacturing costs will be 44.3 yuan per square meter, including warehouse leasing.
Price: Tea use in China is increasing, with about 40% of the country’s 1.4 billion people drinking it. The best tea can cost up to a thousand dollars for 500 grams. The Chinese Yuan is equivalent to one US dollar, seven dollars, and twenty-two cents. We intend to charge between 20 and 30 yuan for our Chocolate Milk Tea.
They employ local outlets that are quite powerful in the country for promotion. Creating the correct content will aid in increasing their presence on their platforms. Chinese marketing firms can aid with branding. I would have to modify their brand aspects to appeal to the Chinese market. The fact that China has different social networks and branding would be major problems. Facebook, Twitter, and Instagram do not exist in China.
Supermarkets, convenience stores, and e-retailers will be critical distribution channels for me in China. Lotus Supermarket, Wumart, and Wallmart will be among the distribution outlets employed. Convenience stores are currently the largest distributors of beverages in China. In terms of storage, I want to keep my items in a public warehouse until distributing them. There are numerous low-cost warehousing solutions in China. As a result, you may expect a reasonable offer from warehousing businesses. (2022, Fulfillbot)
Business licenses and anti-monopoly laws are two examples of rules and regulations that I would have to consider. To distribute this product, a regular business license will be required. A basic business license, given by municipal Administrations of Industry and Commerce, consists of specific activities that the firm is entitled to engage in. The Anti-Monopoly Law of China forbids retail price maintenance, which includes ordering a distributor to sell goods to third parties at a minimum resale price. (Blog, as well as China Law Blog)
Marketing Strategy Chocolate Milk Tea is a new beverage that we are developing. This drink is refreshing and pleasant at any time of day. It combines two of China’s greatest beverages in a single swallow. This product will necessitate planning and research in preparation for marketing.
Tea is popular in China when it comes to cultural difficulties in marketing. It is an important part of Chinese culture, acting as a distinctive beverage or traditional medicine. Chocolate milk appears to be the second-best beverage in China. Chocolate milk is popular among Chinese millennials. So a combination of both is required to satisfy both taste senses.
Product, Price, Placement (Distribution and Logistics), and Promotion Analysis
Tea consumption in China is increasing, with about 40% of the country’s 1.4 billion people drinking it. The best tea can cost up to a thousand dollars for 500 grams. The Chinese Yuan is equivalent to one US dollar, seven dollars, and twenty-two cents. We intend to charge between 20 and 30 yuan for our Chocolate Milk Tea. Supermarkets, convenience stores, and e-retailers will be critical distribution channels for me in China.
Convenience stores are currently the largest distributors of beverages in China. In terms of storage, I want to keep my items in a public warehouse until distributing them. There are numerous low-cost warehousing solutions in China. As a result, you may expect a reasonable offer from warehousing businesses. (2022, Fulfillbot) My new product will be promoted both online and offline in China.
Offline marketing would entail distributing samples at local supermarkets, exclusive businesses, and tourist destinations around China, as well as placing advertisements on billboards and online portals. Our website for an online retailer and its social media platforms in China will be used for online marketing. People will be able to purchase our chocolate milk tea both offline and online. Using a combination of ancient and new tactics will increase our chances of success in China. We will be able to reach a broader audience in order to promote our new product in China.
PEST stands for Political, Economic, Sociocultural, and Technological Analysis.
China’s government has extensive authority over its commercial regulations, yet the country operates as a full market economy. Their government is committed to the growth of e-commerce. They are currently developing e-commerce regulations. China has had a weak judicial system for many years. They do not have any legislation that support the recognition of electronic signatures and contracts, nor do they have any regulations that support privacy. China’s GDP growth rate is approaching that of the United States. Exporting more enterprises, urban growth, and an abundance of skilled workforce are all factors that can help it grow. Because labor costs are low in this country, employing people from their home country is the only option. High inflation and high property taxes are two factors that could have an impact on China’s GDP growth rate. China’s socio-cultural aspects change dramatically due to population expansion and age distribution. This has the potential to influence societal trends and cultural values. China represents a strong collectivist culture that places a premium on its residents’ interdependence and the importance of connections. Hofstede (2021). In China, online access is crucial; many individuals prefer to shop online rather than in-store. China’s internet payment system is a serious and huge technology issue. This system need assistance in order to be safe and stable for credit card users. This results in poor online credit card transaction usage and penetration. China has its own set of rules and regulations, and it will not allow a Chinese company to conduct payment transactions on non-Chinese-approved platforms. This applies to all online transactions performed in China on servers/cloud/data. In China, all payments must be paid to a Chinese bank account.
SWOT
The first advantage of having my goods in China is the increase in GDP. Since 2010, their growth has been rising. Another consideration is the low cost of hiring someone to sell the goods. Because of the financial benefits, many manufacturers have units in China. Even if the quality suffers as a result of these pricing, it generates cash. The primary weakness I would encounter is the government’s tight control over enterprises. Businesses are subject to several regulations and legislation. Because China’s government is centralized, there is frequently tension between local and central governments. This disagreement leads to last-minute adaptations based on their current demands. China would profit from opportunities such as incorporating e-commerce into the coffee sector. Launching an app for promotional purposes is an excellent approach to use e-commerce. Businesses can use cutting-edge technology to assess pricing, estimate market demand, and locate stores. Having the ability to create a new product that must be sold can also help to reduce unemployment rates. The Chinese government has urged local governments to promote work opportunities, particularly for young people, in the face of rising unemployment, which might have ramifications for stability if not reversed. (Pao, 2022) Competition from neighboring countries, Japan and South Korea, are potential threats. Because of the low labor costs in China, they lose all of their business. Furthermore, as a result of the pandemic, China’s unfavorable image has grown in recent years. Other countries have expressed their displeasure with them, blaming them for the epidemic. According to surveys, China handled the coronavirus outbreak as it should have. This allows firms to collaborate with them.
References
Ma, Y. (n.d). (n.d.). The Chinese tea industry is the subject of this article. Statista. Statista, https://www.statista.com/topics/4688/tea-industry-in-china/#topicHeader wrapper Consulting, D. (2021, November 18). The Tea Market in China: An examination of the world’s largest tea market. Daxue Consulting specializes in market research in China. https://daxueconsulting.com/tea-market-in-china/ (accessed November 6, 2022).
Fulfillbot. (2022, August 19). (2022, August 19). 2022 China Warehouse Ultimate Guide Fulfillbot. Hofstede, https://fulfillbot.com/blog/china-warehousing/ (accessed November 11, 2022). (2021, June 21). Comparison of countries Insights from Hofstede https://www.hofstede-insights.com/country-comparison/china,the-usa/ (accessed November 13, 2022).
Pao, J. (2022, May 3). (2022, May 3). China has an issue with youth unemployment. The Asia Times Retrieved from https://asiatimes.com/2022/04/china-has-a-youth-unemployment-problem/ on November 13, 2022.
C. L. Blog and China Law Blog. October 31, 2022 Using distributors to sell things in China. LLP Harris Bricken Sliwoski https://harrisbricken.com/chinalawblog/selling-products-in-china-via-distributors/ (accessed November 20, 2022).
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