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Introduction
Since its increase of Mongolian agriculture such as sheep, there
is great opportunity to export lamb to our neighbor countries.
Mongolian agriculture is greatly increasing last 5 years. It stated that
number of head 5 types of animal will reach 60 million end of this year.
The most dominant number of animal is the sheep that has been
reaching 23.214.800 in 2014. (infomongolia.com, 2014)
The target market of exporting will be to China. China has chosen
it is because of increase of potential customer and the closest area
from Mongolia.
Start up lamb business to China has to deal with Food Standardization
first.
If the companies interested in to export the food commerce and would
like to export any meat products in China they have to assemble the
conditions of the Food Safety Law of the P.R.C.
Their standards derived into The Standardization Administration
of China unites manage, direction and organization of the quality
principles of the products in China. Mutual agreements endorsed
among China and the exporting company. It included setting up the
veterinary and health requirements for perishable goods to export in
P.R.C.
The registration conducts foreign manufacturer recording at the
General Administration of Quality Supervision Inspection and
Quarantine all through the Certification and Accreditation
Administration of the P.R.C.
(center)
The major issue in China has facing with pollution; Chinese are
more concerning on food safety rather than taste or quality. Australia is
a well-experienced country to meet safety food as an exporter. Their
sales recorded 845 million USD in 2013. (Locke, 2014)
(lamb, 2015)
It shows New Zealand sheep meat has acquired more than half of
the market that is 65% of market share and Australian others.
China has detained a gradually more vital duty in world lamb and
mutton market since its 2010. It has been an eventual market for
exporters with diverse goods and services it is because of big and fast
increasing middle class population. On the other hand Chinese lamb
trade have been rising since 2010. Also it took in place of worlds
largest lamb buyer France in 2012.
Market analysis
Expensive sheep meat and lack of providers are influenced the
Chinese government to prefer attraction of foreign investor for selling
more sheep meat in the local market to create competition. These
processes grew local meat production. Occasionally it also improved
imports of sheep meat since 2010.
But the reduction of Chinese economic growth and to take controlling
with over-spending from the government was contributed to slow
demand for imports meat in China.
The decreased demand for sheep meat importing has effected to
charge of sheep meat starting to fall in the mid of 2014. It has still
sustained in 2015.
According to the Chinese Ministry of Agriculture, the price of mutton
dropped at wholesale stores 56 Yuan(per kg) into to 49 Yuan in Jun
2015. It has declined 12% per year.
(AHDB, 2015)
STP model
Segmenting
segment 1
Restaurants
Supermarkets
Wholesalers
Local shops
Local markets
segment 2
Targeting
Aside from the market segmentation, company can be more
effective with choosing segment number 1. By Wholesaling in B2B
method is the most effective way to provide perishable products.
However it has to consider with cheap pricing but the amount of selling
will get benefit to the organization.
Since its a huge population with big land that could arise difficulty to
control all organization in China. For the company these issues will
reduce by using B2B method.
B2B is a common method in China after Alibaba.coms
implementation.
Positioning
Online selling sheep meat is quite new in Chinese market. The
major competitors Australia and New Zealand sales conduct with an
export that targeted in mass market. Our differentiation is only
targeting business customers that can get instant selling in China.
On the other hand our offering product has got the fastest
delivery process when it fresh. According to delivery process we could
catch the most potential users in China.
Marketing mix
Product
The sheep will slaughter in the home industry and will ship with
labeled boxes.
We offer four different types of products in case of target customer
1. Mongolian Mutton with bones
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Price
Meat is a perishable product that requires high effort. The
freezing is important situation during the delivery process. So we have
another differentiation for our product. Delivering process will be the
closest than other competitors. Our cost can be built much cheaper.
Price calculation:
Main price of a meat + cost of labor + cost of delivery + 20% profit
as it possible. Seasonal pricing method is the best accurate price for
agricultural products.
1. Mongolian Mutton with bones 3 - 4$ per kg (depending on
season)
2. Mutton without bones 5 - 6$ per kg (depending on season)
3. Small chopped mutton package 7$ per package (500gr)
4. Small chopped mutton rib package 7$ (500gr)
Place
As a perishable product provider using online service method is
effective way to meet customer needs.
Promotion
Advertising goes with Alibaba as a banner, pop ups and video.
The massage will include the company core value of wholesaling
method, fast and fresh products. Also it has to be attracting business
customers to the closest exporter to china.
Cultural environment
Dining culture
Chinese culture of dining and cuisines are diverse it is because of
different nations are living in big scope of country.
First they are family oriented people rather than Westerns. Chinese
dinner always conduct with big amount of people like whole family or
all friends, all co-workers.
People tend to dine at restaurants rather than at home it is
because amount of customers. As a lamb exporter it is an advantage
to fulfill this demand.
Internet usage
In order to make an online production Internet usage culture is a vital
consideration for company. China has special regulations at the
Internet usage. But looking at alibaba.com success, it is the highest
rated website in China. Alibaba has three main parts as a shareowner,
1. Taobao is a Chinas major shopping website;
2. Tmall, which concentrates on online sales of branded products
and concerns on Chinas fast-growing middle class
3. Alibaba.com that connects Chinese exporters and importers with
foreign businesses anywhere in the world.
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Economic, finance
The Chinese economy performed greatly growth in last years
that has noted the country to rank the world's second major economy.
Since the beginning of the economic reorganization in early 1980s,
China has turned into the worlds industrialized center that place
secondary area stood for the biggest portion of GDP.
In 2008, year of world crises, China gathered better that most
other countries with decreased economic growth percent. It counted
GDP has decreased 2 digit numbers into above 9 % growth. Their GDP
reached 7574 USD per capita last year.
Imports to China
Due to supply industries and maintain Chinas fast growth,
intermediary goods and a large choice of commodities, including oil,
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iron ore, copper and cereals, commonly leads their imports. Chinas
high demand at raw materials has driven world commodity charge
went up in recent years, thus increasing the funds of many developing
counties and commodity-exporting businesses.
Asian countries are mostly a seller to Chinas supply of imports. It
is with a share of about 50% of sum of imports.
Imports from Europe and North America are about 17and 10 percent.
As a main worldwide purchaser of commodities, trading from Australia,
Africa, south America and from middle east have gained strongly in last
few decades to account a share of about 23%.
(focus-economics.com, 2015)
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the company; and engagement to get in this industry and 5) the period
of time to get in
As mentioned earlier, bringing products/goods to Mainland China
usually include licensed for import/export companies following Chinese
laws. These are registered companies in China. Therefore, the term
importer in Chinese trade terminology usually refers to the
registered company in China possessing an import/export license. In
the general sense, a company like this is possible to be a buyer and so
importer, although usually it is only a service provider/ intermediary
helping with import (bringing the goods across the border and
facilitating international payment).
Direct exporting advantages:
options etc.
Greater potential profit
Greater control over all aspects of the business
Conceivably legislative
Danger of not gaining a benefit
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general infiltration.
Market entry by settling up a joint venture of some kind may be
more difficult and time-consuming than the other two export
strategies written above, thus apparently yields the best overall
penetration of Chinas market. Making use of this plan, these two
parties (the foreign firms and the Chinese party) could get the
most benefit.
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Recommendation
Importantly firm must consider following recommendations in
process of exporting to Mainland China:
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manufacturing
Increasingly strong competitors
Chinas industries are heavily regulated
Conclusion
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