laduree powerpoint report_final_update (2)
DESCRIPTION
Global marketing analysisBrand: LadureeTRANSCRIPT
Group 5 (B01E)Chan Kin Chu (Matt) 13615542SChoi Winki 13627878SKusnaidi Deny 12286283SLo Cheuk Yin (Cherry) 13607204STong Wing Ni (Winnie) 13625443SWa Tin Yan 13017369S
Ladurée SPD4291 Global Marketing
Contents
Macro-Environmental Analysis
Competitive Analysis
Marketing Objectives & STP
Market Entry Strategy
Marketing Mix Strategies
Marketing Environment AnalysisEconomic Environment and Financial Environment
Winki
Economic & Financial Environment
• GDP: 56.9 trillion Yuan in 2013, reached 7.7% growth
• GNI per capital:29547 Yuan
Economic Statistics
• Chinese spent1020 billion USD on luxury products in 2013
• contribute to 47% of sales revenue on luxury market
Luxury spending
• The dine-out expenditure of first-tier cities is higher than second-tier cities for 35%
• First-tier cities mainly refers to Shenzhen, Beijing, Guangzhou, Shanghai
Dine Out Expenditure
Economic & Financial Environment
Source: Map of special economic zones (BBC)
Special Economic Zones:
1. Pudong District, Shanghai
2. Xiamen, Fujian
3. Shantou, Guangdong
4. Shenzhen, Guangdong
5. Zhuhai, Guangdong
6. Hainan
Economic & Financial Environment
Closer Economic Partnership Agreement (CEPA): Between China & HK Hong Kong suppliers enjoy preferential treatment when setting up business in various service in the Mainland
Less restriction on :• operation model (eg. allowing wholly-owned operations)• registered capital requirements• geographical location and business scope
Association of Southeast Asian Nations (ASEAN)ASEAN Free Trade Area ( 東盟自由貿易區 )
Free Trade Area
Economic & Financial Environment
China’s economic freedom score is 52.5, making its economy the 137th freest in the 2014 Index
-> tight control of the financial system.
Source: Wall Street Journal
2014 Index of Economic Freedom
Increase investment freedom
Cultural Environment
Admire Foreign Culture • Top 10 brands are foreign brands in Chinese
customer’s mind (world Brand Lab) • China citizens lack of confidence in local
enterprise
Popular Country to Chinese• France is the most popular country to Chinese
people• 35 % respondents want to go to Paris and
Shopping in Lafayette department store (Travelzoo)
Luxuries Consumption• Consume luxuries for business gift• Show-off their social status, power and taste• Anti-corruption in China: dilute luxury brand
LOGO features& low-key luxuries
Cultural Environment
Guan-Xi :necessary for doing business
Luxuries as a business gift (商務馈赠)• First-tier cities : 28%• Second-tier cities: 36 %Categories: High-end brand’s clothing, leatherware , wallet etc
Guan-Xi:-Building up network-Fit to Chinese Traditional business model -operate business more easily
Source: Insead “ 中國生意經: 關係不可少”
Cultural Environment
Hofstede Index of China
Source: The Hofstede Centre
• High Power Distance:Accept unequal power status & wealth -> Obsession hierarchy -> respect to authority
• Masculinity:success/result/ achievement is important
-> Mian-Zi(面子)-> a person reputations and social standing rest on concept of “saving face”
Gift Giving Culture
• Gift giving used to be part of Chinese business protocol & tool for building relationship -> related to Guan-Xi
• Gift for Chinese New Year, Mid Autumn Festival, birthday etc
• Luxury gifts: more popular between couples
Cultural Environment
Color Preference
Cultural Environment
Colors have variety of meanings in Chinese Culture
Red: Considered as lucky color in China One of the most save color Choice
Gold, Silver and Pink : suitable color for packaging
White, Blue , Black should be avoided (negative meaning)-dead, dirty, sorrow
Marketing Environment AnalysisPolitic Environment and Legal Environment
MATT
Political Environment
Under WTO regulation and
rules
FDI, Joint Venture,
Exporting , Franchising
Provide non-discriminatory
treatment
Price controls will not be used
– fair competition environment
Political Environment
Political stability is low
The likelihood - estabilized or overthrown by unconstitutional or violent means
Ranked in 146 among 192 countries
Political Environment
political risk (dynamic) is high
Political Environment
Legal Environment
Corporation Income Tax– unified for domestically funded and foreign investment at 25 %
In HK, Corporation Profit Tax is 16.5
Legal Environment
Individual income tax-
Progressive Tax Rate and Table of Quick Deductions Applicable to Wages and Salaries
Level Net Taxable Income per Month
(assessable income net of deductions and allowances)
Rate(%)
1 RMB 1,500 or less 3
2 over RMB 1,500 to RMB 4,500 10
3 over RMB 4,500 to RMB 9,000 20
4 over RMB 9,000 to RMB 35,000 25
5 over RMB 35,000 to RMB 55,000 30
6 over RMB 55,000 to RMB 80,000 35
7 over RMB 80,000 45
Compared with HK, Only 2% to 17% of net chargeable
incomec
Repatriating Profits and Dividends
Timing of Repatriation
• Profit repatriation can only be conducted once a year after the annual audit has been completed
Remittance Requirements
• Institutions in China making outbound payments the value of US$50,000 are required to conduct record filing with the in-charge of the State Tax Bureau (STB).
Conclusion of environment analysis in China
High in political risk and stability
High in tax rate
Economic freedom is low, business activities may be restricted
Large potential financial return
Competitive Analysis
Opportunities:- Foreign luxury brand is popular in China
-Similar Food Consumption patterns with HK & Taiwan -Purchasing power increase enjoy better food quality
Threats:- Policies to save catering expenses- Instable of RMB currency - Leak of trade secret - Food Safety issues
Catering
The potential business opportunities
Laduree Macaroon
Agnes b.cafe
Marketing ObjectivesShort-term and Long-term
DENY
CEO of Holder Group
David Holder’s
FounderLouis Ernest Ladurée
Who? Popularity: 152 years Recognise as one of
the best known
makers of macaroons
in the world Usage
15,000 sold every day
How?Has been established
since 1862
When?
Headquarters:Marcq-en-Barœul, France
Present: 69 Branches France: 18 Japan: 7 Switzerland: 7 Hong Kong: 3
Where?
A French luxury bakery and sweets maker house
What?
Company Background
Marketing Objectives
Short-Term: 1 year
Increase brand awareness up to 70% Increase sales/revenue (capturing up
to 10% of the market share) Expands into Special Economic
Zones (SEZ) in China (Guang Zhou, Beijing, Xiamen, Shantou, Shen Zhen, Zhuhai)
Building brand loyalty project to have at least 30% regular customers
Lead industry in brand alignment and consistency (e.g. CSR activity positive corporate citizen)
Ethical standards for marketing communications will be put in place (e.g. language, packaging)
Marketing Objectives Cont’d
Acquire a title of China Michelin-starred restaurants on each branches
Long-Term: 3 – 5 years
Reach 25% of market share in
China
Become top five in the luxury
bakery and sweets maker industry
Competitive Analysis
Weaknesses:
- Limited product focus
(Cannot diversify)
(Macaron & Mille Feuille au Rhum)
-Food is culturally sensitive
(different dietary preference)
Strengths:
-Strong French Brand
(a famous brand in French)
-Clear positioning
(High-end product/ luxury package)
-First macaroon developer
STPSegmentation, Targeting, and Positioning
DENY
Segmentation: Demographic
Population size: most populous country in entire world (1,350 M) = 19.3% throughout the world
Ethnicity Composed of 56 ethnic groups
Largest: the Zhuang = 16 M Average: the Hui = 10 M Smallest: the Lhoba = 3,000
Language: Mandarin or Putonghua
Age: Range 21 – 65 years old Global Elite: Baby boomer, generation X, as well as Y
Income: Middle – Higher Upper
Education: Post-Tertiary Level
Occupation: Wide-ranging (business especially white-collar workers professional, managerial, or administrative work), Tourism tourist
Segmentation: Demographic Cont’d
Segmentation: Psychographic
Attitudes: Pluralisation of consumption seeks for variety of
ethnic food (i.e. new tastes, excitement, and
sensations in life)
Adaptive and European-culture lover, stressful
negate from daily’s routine
Segmentation: Psychographic Cont’d
VALS Framework
Targeting
Women seduced by:
Feminine pleasures Cakes and Sweets Cute and beautiful atmosphere Making gifts Events organisation
Idealistic woman Trendy Chinese Sophisticated Gourmet
Affluent Materialists Status-conscious (use
conspicuous consumption to communicate their success to others)
Age : 21 – 40 (Gen. X & Y)Income : middle – high upper
Businessman:
Relaxation site Stressful Chit-chat or Formal discussion Negates daily routine
Affluent Materialists Status-conscious (use conspicuous
consumption to communicate their success to others)
Guan Xi
Positioning
Perceptual Map High Quality
High Price
Low Quality
Low Price
Positioning Cont’d
Foreign Consumer Culture Positioning
(FCCP)Brand Function
(i.e. French Gourmet Delicacies)
Descriptive Modifier(i.e. Highest-quality,
exclusive, and elegance)
Emotional Modifier(i.e. status providing)
Market Entry StrategyJoint Venture
WINNIE
Joint Venture
Cooperate with a successful Catering Company based in Hong Kong & China
Selected Company: Expert of catering industry Ranked in top two in catering
industry market share Pioneer of Joint Venture in China Experienced CEPA system Starbucks is one of joint venture corporation
Joint Venture
Experienced CEPA system:
Specialize in exploring China F&B Market by promoting Hong Kong bakery products
Closer relationship with Mainland enterprise in F&B trading
Accelerate & integrated its F&B business Reduce the risks
Joint Venture
Maxim’s has a wide network in catering industry
Maybe the only way to remove barriers + difficulties to enter China market
More efficient than licensing Achieve Synergy
1 1 3
Joint Venture (Advantages)
• More familiar with the environment e.g. Political risk, legal liability & taxation
Localized Partners
• Provide an opportunity to learn the strengths
Collaboration
• Contribute the catering Know-hows in China
Expertise
Communication: Adaptation of language,
culture, Dietary preference
Work together Supply chain: Logistic,
Distribution
Share of Knowledge + Techniques• Reduce Human error
• Share of expertise e.g. Chef
Marketing Mix StrategiesProduct, Price, Place, and Promotion
Adaptation of 4P in Laduree
•Product•Place•Price•Promotion
Adaptation
ProductMarketing Mix Strategies
Cherry
Product
•Unchanged brand name and brand logo•Gift giving & luxury products•Admire foreign culture •Foreign / imported products are seem to be luxury
Branding
•Taste - sugar light•Match Chinese taste Black sesame Pine nuts and red bean paste ( 豆沙松子 ) Zaoni walnuts( 棗泥核桃 ) Edible bird's nests
Product itself
Product•Experiential Packaging•Gift pack•Red color of package•Color: red•Symbolizes good fortune and joy•Design package for different festival
Packaging
•Language•Simplified Chinese•Place labelling at the back of the box•specified ingredients, flavors
Labelling
Product
•Chinese people prefer classy
touch
•Symbolic power
•Edible gold leaf ( 食用金箔 )
•New Year-themed macaron
•Macaron moon cake
Aesthetics
PriceMarketing Mix Strategies
Yandy
Price
Polycentric Pricing Policy:
Market Skimming PricingA premium price (Price Quality Inference :
using high price to infer a high quality)Positioning for luxury products
PlaceMarketing Mix Strategies
Cherry
Place
Commercial hub Higher income Strategy Direct involvement
alternative Focus on flagship stores Showcase Macaron Serve customers directly
First-tier cities
• Beijing • Shanghai• Shenzhen • Zhuhai• Shantou• Xiamen • Hainan
Business transaction Commercial hub
Marketing Communication
Yandy
Marketing Communication
Pattern Advertising: Standardize brand elements Use pan-regional elements in China market,
e.g TV commercials will use Voice-overs
Marketing Communication Cont’d
Communication Channels: (1)Newspaper : Newspaper (China Daily: business oriented ,well educated people)
Marketing Communication Cont’d
(2) Magazines: selling luxury magazines
Marketing Communication Cont’d
(3)Online marketing: Develop a Chinese Official website &
Weibo: invite blogger (opinion leaders)to have a trail and write the comment of our products.
Reference
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Reference
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Reference
World Luxury Association (2013), 2014: dilute luxury brand LOGO features. Available from: http://www.wla.org.cn/ [Accessed: April 2, 2014].
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Appendixes