1. Introduction 1.

1 Background In the year of 2010 the Australia Goodman Fielder company, which is the owner of White Wings developed a new line of ready baked biscuits. White Wings recognised the opportunity for future growth within this industry and discovered there was a range of different consumer tastes and needs that were not fully catered too (White Wings, n.d.). This resulted in the new line of biscuits, which included the Chunky Minis range of biscuits (Chunky Minis and triple choc cunkies), being created to satisfy the consumer demands in the shelf stable biscuits segment. The product consists of mini choc-chip ready baked biscuits. After the products success in Australia (Fielder, 2010) exporting the product internationally is a suitable step for future growth, thus the Chinese market was chosen. The annual growth rate of China is 0.57% and has a population 13.7 million people (Jiantang, 2011). However there are key issues that must be understand about chinas ready baked biscuit market before the product can established there. As China has a complex culture and many firms in the past have failed when entered China (Melwar, Badal & Small, 2005). Therefore, cultural environmental factors such as material life, language, social interaction and aesthetics will impact on the success of the western biscuit brand in the Chinese market. In depth knowledge of the positives and negatives outcomes of these factors will give vital information about the Chinese market and ultimately helps determine whether the product should be customised or standardised for the success of the Chunky minis biscuits in mainland China.

1.2 Aim The purpose of the report is to provide the Marketing Director an in-depth analysis of the cultural environment of mainland china, so clear objectives and strategies can be set to ensure the success of the ready baked biscuit when exporting to China. The report firstly looks at material life, then at language, thirdly at social interaction and finally at aesthetics, which is followed by conclusion and recommendations.

1.3 Scope To communicate a detailed investigation of the affects of cultural environments in mainland China particularly in regards to material life, language, social interaction and aesthetics. These factors will 2|Page

result in either standardising or customising White Wings chunky minis range of biscuits to the local mainland Chinese market.

1.4 Assumptions and limitations For this report data was collected from an array of academic secondary resources such as websites (The National Bureau of Statics of China), books and journal articles. However, there are some limitations with the information gained and this will limit the analytical analysis of the report. Some of these limitations include: secondary data collected isnt specifically made for this particular investigation, the loss of meaning of words through translation and not all sources are accurate and something not reliably from China i.e. statistics available from Chinas census data.

2. Industry Analysis of Mainlands Chinas Cultural Environments 2.1 Material life Different social classes have different ideas and perceptions of materialised goods. The Chinese population (particularly the middle-class) have a high perception of material goods and vastly value the importance of design and workmanship in a product or service. The general Chinese consumer is also more likely to buy a product or item that reflects high status and wealth (Dagger & Raciti 2011). Chinas material environment is affected by consumers demands and as a result most products need to adapt to the environment for acceptance and success in this market. These demands are influenced by the population, so as the average family household size in China is 3.10 people per households, (Jiantang, 2011) smaller package size of the Chunky Minis is required compared to the value pack available in Australia. Also there is a lot less retailer and household space for these items, so if a large package was made for this market the Chinese consumer would be resistant in purchasing the product. So the Chunky Minis would have to adopt the Chinese consumer needs and resize the ready baked biscuit packaging. However, the Chinese culture is also known for its high values towards and politeness and sharing with friends, family and colleagues. These sharing and loyalty concepts are still prevalent in China today (Nevis, 1983). So having a packet of Chunky minis biscuits allows the product to be shared with ease, thus standardising this component of the biscuit will have a positive impact in the cultural environment in China. 3|Page

2.2 Language The term language not only focuses on what is said but also body language and facial expressions. The Chinese is very complex as they have gestures which symbol different meanings, for instance when making a business deal or talking to a superior its considered rude and dishonourable to look into their eyes (Unger, 2006). This makes it essential to learn business practices in China so when making deals and advertising the Chinese arent offended. Most of the Chinese population (particular the youth) have embraced many western culture which include the English language, with over 2oo million learning English as their second language (Kachru, 1997). However there is still many that dont fully embrace it and would rather speak in Chinese, this can untimely become a language and communication barrier. This will affect if the brand name on the packing should be in English or Chinese. The brand name should be written in English as a global companys objectives include making global brand awareness. So if White Wings decided to export to another country the brand name isnt known and a global identity cant be established. However nutrition information should be provides in Chinese so they can be understood by the local market.

2.3 Social Interaction The traditional Chinees market is shifting towards more westernised behaviours and patterns although still hold strong prevalence to aspect of their culture (Du et al. 2002). The National Bureau of Statistics of China state that in 2010 the average family size had slight diminished to 3.10 people per household. This decrease in family size is the result of a decline of fertility, the increased migration population and changes in young couple living arrangements (Jiantang, 2011). This data suggests the norm household in China consist of parents and a child, showing that there is a common nuclear family structure in households. However it doesnt show the important value put on the extended family within the Chinese community. This results in larger family gatherings and therefore is greater demand for a packet of Chunky Minis for the occasion. The average person in China is estimated to have two to three meals a day, however it is common for school children and adults to skip breakfast as there isnt enough time for its preparation (Morrison, Anderson & Richardson, 2004). So the Chunky Minis could be adapted as a breakfast on the go product which would be both convenient and healthy. Also the Chinese consumers compared to western consumers are a lot more health conscious, so slight adaption to the taste and sugar content will be required for the Chinese market (Melwar, Badal & Small, 2005). In response to this Chunky Minis biscuit range should promote the added 4|Page

nutrients (i.e. fibre) provided in the biscuits and the reduced total energy and saturated fat context (Chunkies Minis, 2010). This low reduced fat context would also be popular as there are an increasing number of overweight individuals in China (Du et al. 2002). Another social interaction factor is majority Chinese society are conservative, as they act in a manner that would be accepted by the social norm and uphold harmony within a group (Kotabe et al. 2011). Subsequently, outgoing advertising and associations with other uncommon products will damage the Chunky Minis reputation. The reference group idea is very predominant in mainland China as the majority of the middle social-class aspires to be in the wealthier social-class. So they will buy luxurious products and services when economical suitable to feel a part of that group (Unger, 2006).

2.4 Aesthetics A countries attitude towards aesthetics is referred to a cultures mind-set and perception about tastes and beauty (Kotabe et al. 2011). This can be translated through different flavours, colours, symbols, and shapes and what they actual mean. A range of different colours and symbols have specific meanings in the Chinese culture which is very different from western cultures (Kommonen, 2011). Some consumer in China are embracing non-tradition flavours and are more accepting to westernised tastes for instance the chocolate consumption in China has increased from 10 to 15 percent a year. This has occurred because the living standards have increased in China so the average household has a slightly higher income; also values particularly with the youth are taken on more western influences (China's taste for chocolate, 2008). This increased acceptance of western culture and taste reinforces the potential growth of chunky Minis biscuit range in China. Although China is embracing western buying behaviours and buying patterns, many traditional tastes and behaviours are still widespread in the Chinese culture and society (Yan, 1994). One of these cultural aspects which are still prevalent in China today is the meanings and use of different colours and Appendix 1 shows what a few colours mean in the Chinese culture. The vast understanding of the meaning of colours is needed because there are many complex factors associated with it, e.g. the colour red (refer to appendix 1). Thus, there is a need to adapt and change the Chunky Minis packaging colour as blue isnt a well thought of colour in china. Also there is a high demand of biscuits in China but price is very elastic (Wu & Wu, 2008).

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3. Conclusion The success of the White Wings Chunky Minis range of biscuits will depend on an understanding the cultural environments of mainland China. Chinese consumer tastes are changing and are more accepting of the western culture. The Chinese are more accepting of western language; however the sharing concept in china is still very predominant. The aesthetic in Chinese culture is very complex and great knowledge is needed as symbols and colours have an array of meanings. Many consumers have busy lifestyles and skip breakfast as they want a healthy option but inefficient time for preparation. Also the aspiration reference group is a widespread in china, and relevant in the middle-class. Similarly material life in China is increasingly important and the fact the average household is decreasing in size means Chunky Minis packaging need to reduce in size.

4. Recommendation Overall the White Wings Chunky Minis range of ready baked biscuits should adapt to the local Chinese market, however some aspects of the product should be standardised. The adaptations of the product that need to be made to satisfy the Chinese consumer are: The size of packaging of the biscuit needs to be reduced as decrease in average family size. The nutrients information should be displayed on the package in the Chinese language, so the population that resist the English language can access the important information. Adjustment of advertising and packaging to cater the Chinese conservative values. Provide the healthy, low fat and sugar biscuit, as well as alter the taste. Position the product as a healthy option for breakfast on the go. Change the Chunky Minis packaging colour as blue isnt a well thought of colour in china.

The aspects of the product that should be standardised are: The numerous biscuits in a packet, as it enable sharing which is untimely part of the Chinese culture. Also the brand name in should be displayed in English, to achieve brand awareness international.

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5. Reference List China's taste for chocolate, 2008, viewed 17th August 2011, http://www.china.org.cn/business/2008-09/16/content_16461850.htm

Chunkies Minis, 2010, viewed 11th August 2011, http://www.whitewings.com.au/_catalog_85365/Ready_Baked_Biscuits

Dagger, T & Raciti, M 2011, Matching consumers country and product image perceptions: an Australian perspective, Journal of Consumer Marketing, vol 28, no. 3, pp. 203-208, viewed 12th August 2011, via emerald database

Du, S, Lu, B, Zhai F & Popkin, B 2002, A new stage of the nutrition transition in China, Jonral of Public Health Nutrition, pp.169174, viewed 12th August 2011, via emerald database

Fielder, G 2010, Product Guide, Edition 7, pp. 1, viewed 3rd of September 2011, http://www.gffoodservice.com.au/Documents/Product-Guide-Spring-2010.pdf

Jiantang, M 2011, Press Release on Major Figures of the 2010 National Population Census, viewed 30th August 2011, from National Bureau of Statistics of China database.

Kachru, B 1997, English as an Asian Language, Links and Letters, pp. 93, vol. 5, no. 1, viewed 1st of September 2011, via Emerald database

Kommonen, K 2011, Narratives on Chinese colour culture in business contexts, Cross Cultural Management, pp. 372-380, vol. 18, no. 3, viewed 2nd of September 2011, via Emerald database.

Kotabe, M, Ang, S, Griffiths, K, Marshall, A, Voola, A & Helsen, K 2011, International Marketing (Third Asian-Pacific Edition), pp. 129

Melwar, T, Badal, E & Small, J 2005, Danone branding strategy in China Bramd Maagemant, vol. 13, No, 6, pp. 409-414, viewed 31st August 2011, via proquest database.

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Morrison, N, Anderson, J & Richardson, E 2004, Cross-Cultural Caring: A Handbook for Health Professionals pp. 87.

Nevis, E 1983, Using an American Perspective in Understanding Another Culture: Toward a Hierarchy of Needs for the People's Republic of China, The Journal of Applied Behaviour Science, vol. 19, No. 3, pp. 251, viewed 2nd of September 2011, via SAGE Journals online database.

Unger, J 2006, Chinas Conservative Middle Class, Far Eastern Economic Review, vol. 169, no.3, viewed 2nd September 2011, via Proquest database.

White Wings, n.d., Viewed 14th August 2011, http://www.whitewings.com.au/ourheritage/index.html

Wu, Y & Wu, H, 2008, Households Gain Consumption in China: Effects of Income, Price and Urbanization, Asian Economic Journal, pp. 336-338, vol. 11, no. 3, viewed 31st August 2011, via Wiley database.

Yan, R 1994, To reach Chinas consumers, adapt to Guo Qing Harvard Business Review, vol. 72, no. 5, via Emerald database.

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6. Appendix Appendix 1. Colour Red Yellow White Green Blue Black Grey Meaning/Association Symbolises happiness, celebration bridal wedding gown and New Years. Also can symbolise a district of evil. Belonging and following the emperors, and the colour gold hence richness. Traditional wore at funerals and symbols starting a new life. Association with the Forbidden City, also a sign of embarrassment and betrayal. Also when a wife betrays her husband, he is given a green hat. Temple of heaven. Traditional the Chinese dont like blue but is seen in Chinese Temples and tombs with the colour red. Is a safe colour for any occasion e.g. leisure, business, life. Losing joy of life.

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