The document is a group assignment cover sheet for a marketing course at the University of South Australia. It contains details of the assignment such as the course code, title, program, and due date. It also lists the names and student IDs of the 6 students in the group, and includes a signed statement declaring the work as their own and authorizing plagiarism checks.

1. UNIVERSITY OF SOUTH AUSTRALIA
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Student Name (Print clearly) UniSA Email ID
1. Pei Gin Lim 110030218 Limpy021@mymail.unisa.edu.au
2. Pak Yin Lee 110051446 Leepy025@mymail.unisa.edu.au
3. Wai Pang Cheung 110052433 Chewy096@mymail.unisa.edu.au
4. Chan ho hin 100085177 Chahy078@mymail.unisa.edu.au
5. Ka HO Wu 100103068 Wuyky014@mymail.unisa.edu.au
6. @mymail.unisa.edu.au
Course code and title: MARK 3005 International Marketing
Program Code: DBIB School: School of Commerce
Day, Time & Location of Tutorial/Practical: Thursday 4-5pm CWE-GK2-15
Course Coordinator: Vivien Chanana Tutor: Sumudu Apsara Senaratna
Extension granted (Yes/No): Due Date: 28 October 2011
Assignment number & topic: 2 Group Assignment
We declare that the work contained in this assignment is our own, except where acknowledgement of sources is made.
We authorise the University to test any work submitted by us, using text comparison software, for instances of plagiarism. We understand this
will involve the University or its contractor copying our work and storing it on a database to be used in future to test work submitted by others.
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Note: The attachment of this statement on any electronically submitted assignments will be deemed to have the same authority as a signed
statement.
Signed: Date:
1.Pei Gin Lim 26 October 2011
2. Pak Yin Lee 26 October 2011
3. Wai Pang Cheung 26 October 2011
4.
5.
6.
Date received from student Assessment/grade Assessed by:
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Introduction
The product that we are going to expand through the international market is Haigh’s Chocolates. Haigh’s
Chocolates is the oldest family-owned chocolate manufacturing retailer in Australia since 1915 which
provide varieties of high quality chocolate products to customers in Australia and the company was
founded in Adelaide, South Australia (Haigh’s Chocolates 2011). The reason that we chosen Haigh’s

2. Chocolates as our strategic goods is that there are different types of chocolate product especially the
hand-made chocolate with the combination of fruits and nuts such as macadamia nuts. Australia has a
great worldwide reputation of growing the finest quality of macadamia nuts therefore this can be one of
the way to attract consumer (Nambucca Macnuts 2011). The markets that we have considered are China
and Japan as both of these markets have huge opportunities of selling chocolate products and greater
awareness of health conscious. The objectives of Haigh’s Chocolates is that to increase the awareness so
that it can compete with the competitors and to promote a more profitable and sustainable business that
are able to provide high quality product and service. However, the mission statement of Haigh’s
Chocolates is to expand their market internationally and become the international retailer of choice of the
premium hand-made chocolates (Haigh’s Chocolate 2011).
Situational Analysis (Japan)
- Economic & Financial Factor
According to (Econ watch) point out that Japan is the 3rd
largest economy in the world, and the GDP of
Japan was about 5.48 trillion and the purchasing power parity was about 4.309 trillion in 2010. This
shows the evident of strong purchasing power and well economic n Japan. If Haigh’s chocolate approach
to Japan Haigh’s would have less effect of economic crisis, because Japan has very strong domestic
product, and the fact is proved in 2008. In the aftermath of the global financial crisis in 2008, Japan
shows a strong ability of economic recovery. Up to the first half of 2011, Japan still represents the highest
growth in the G-7 nations. This is a really interesting data that shows that the potential of Japan’s
economy and purchasing power.

3. According to a market overview provide by (Honda, 2009) there are about 16 million (KG) of chocolate
import into Japan every year. This shows that the demand of chocolate and the willingness of purchase
chocolate product is remain high in Japan after 2008.
- Political & Legal Factor
Base on the information that from (Ministry of Foreign Affairs of Japan, 2011) provide that even though
Japan is one of the Member of World Trade Organization (WTO) Japan still charge for traffic for import
of food product. This makes a pressure for foreign products to increase their price. Except for this factor,
Japan government seems using a loose policy for controlling market place.
- Culture Factor
Japanese people have high demand of chocolate, and they are willing to buy chocolate when they
celebrate Valentine’s Day. From a research that found, the top ten chocolate brands during Valentine’s
Day are mostly Japanese brands, and it shows Japanese people are more support their local brands in that
industry (what Japan thinks). This may due to the Japanese culture or the flavor problem that the foreign
brand missed the not match the Japanese needs, such as; packaging or lack of understand of brands. This
research provides an idea that going in to the Japanese market and to face a heavy competition with
Japan’s local brand which needs set up some specific strategy to increase customer awareness.
- Competition
Competition in the Japan market is huge, according to the data provided by “Chocolate and Cocoa
Association of Japan” shows that there are about eight major countries that import chocolate into Japan,
which are the following countries; USA, Australia, Belgium, China, Korea, France, Italy and Swiss. It is
clearly show that there are many choices of brands in Japan. There are chocolate brands that already go
into the Japan market, for example, Tim Tam, M&M or time out. Research shows that these brands
positioning their chocolate as an economic snack type of product. There are already large amount of
competitors in the market, and as a new entrant business in Australia, it is necessary to locate the brand
differently and target difference type of customers, and it might help the brand to jump out from the
competition or maybe profitable with difference targeting.
However, there are reasons that cause us to give up going into the Japanese market. One of the reasons is
the language problem; although hire wholesalers might help the brand to improve the situation, but that
action might course lower efficiency, hard to management, and as a premium good, it might be hard to
show the quality through wholesalers. The earthquake and tsunami that happened this year would also be
a reason that makes Haigh’s chocolate give up the Japanese market. Nature disaster happened recently in
Japan, and as a business, it would be very high risk to invest a country like Japan with uncertain
economic future (Nanto, 2011).

4. Situational Analysis (China)
- Demographic & Political Factor
Rank country Population Date of Information

5. 1 China 1,336,718,015 July 2011 est.
2 India 1,189,172,906 July 2011 est.
3 United States 313,232,044 July 2011 est.
4 Indonesia 245,613,043 July 2011 est.
Source: The Central Intelligence Agency (CIA)
China is one of the largest countries with the largest population among the world. By July 2011, the
population of China is proximately 1,336,718,015 with an estimated yearly growth rate of 0.493%. The
large population implies that even a small market share in China means a lot. Back to the 90s, China is
one of the lowest literacy countries. By now, the situation has been improved; more than 92.2% of total
population aged 15 and over can read and write. As the education level between people live in city and
rural area is huge,it should note that the message of Haigh’s needs to be simple enough for all the
customers to understand.
Political factor is the weakest parts of entering the Chinese market. In the past, China is an isolated
country characterized by its ‘Closed-door policy’ and its active intervention in the operation of the
domestic market. Since the late 70s, the situation changes. As a first step, four special economic zones
were authorised in southern China with tax incentives to attract foreign capital and businesses, much of
which came from overseas Chinese in places like Hong Kong and Taiwan (BBC News 2011). In 1986,
the State Council announced the Provisions of the State Council of the People’s Republic of China for the
Encouragement of Foreign Investment. The provision provided many favourable policy to foreign
enterprises, e.g. provided foreign joint ventures with preferential tax treatment, the freedom to import
inputs such as materials and equipment and so on (Fung et al. 2002). It shows that the government has
gradually relaxed its control over markets and opened the trade and investment sectors to the global
economy. With the ease of entry barriers and all those favourable policy imposed by the Chinese
government, we think that it is time to enter the Chinese market.
- Economic & Financial Factor
China is the fastest growing market in the world with an average real annual GDP growth of 8%. Measure
on a purchasing power parity (PPP), China is already surpassed Japan in 2009 and became a second-
largest economy with around 5,000 billion of GDP. It accounts for 15% of the total world’s produced.
According to the IMF, China's economy will grow to $123 trillion by 2040, nearly three times the
economic output of the whole world in 2000.

6. Followed by the strong economic growth, China’s retails sales, which raised nearly 17% in 2009 amidst
the economic downturn, expanded strongly in 2010 and expected have a sharply growth in the next 30
years as well.
Moreover, the middle-class has become another shining point for China, Defining the middle-class as
people with incomes ranging from $6000-$25,000 a year, IMF estimated China will boast of over 340
million people by 2016.

7. One another essential factor that is often overlooked: RMB is going to appreciate. China's inflation is also
in heating up signs due to the strongly economic growth. It therefore the exchange rate of RMB seems to
also have upward trend in order to offset the inflation. That means all the import goods are cheaper,
Chinese consumers are likely to consume more. The foreigner who starts its business in China is not
benefit from the uprising consumption trend, but also the exchange rate profit, as our cost is accounts for
the foreign dollars.
- Political & Legal Factor
China is one of the largest countries with the largest population among the world. By July 2011, the
population of China is proximately 1,336,718,015 with an estimated yearly growth rate of 0.493%. The
large population implies that even a small market share in China means a lot. Back to the 90s, China is

8. one of the lowest literacy countries. By now, the situation has been improved; more than 92.2% of total
population aged 15 and over can read and write. However, it should note that the message of Haigh’s
needs to be simple enough for the customers to understand as the education level is not very high in
China.
Political factor is the weakest parts of entering the Chinese market. In the past, China is an isolated
country characterized by its ‘Closed-door policy’ and its active intervention in the operation of the
domestic market. Since the late 70s, the situation changes. In July 1979, The Law of the People’s
Republic of China on Joint-Ventures using Chinese and Foreign Investment was adopted, granting
foreign investment a legal status in China. In 1986, the State Council announced the Provisions of the
State Council of the People’s Republic of China for the Encouragement of Foreign Investment. The
provision provided many favourable policy to foreign enterprises, e.g. provided foreign joint ventures
with preferential tax treatment, the freedom to import inputs such as materials and equipment and so on
(Fung et al. 2002). It shows that the government has gradually relaxed its control over markets and
opened the trade and investment sectors to the global economy. With the ease of entry barriers and all
those favourable policy imposed by the Chinese government, we think that it is time to enter the Chinese
market.
- Cultural Factor
Cultural is one of the factors that need to be considered while analyzing the chosen market (China) of our
product which is Haigh’s chocolate There is a research under CMMS showed that there are 52.4% of the
people in China tend to purchase chocolates as a gift to their friends especially during different kinds of
season such as Chinese New Year’s and Valentines Days (China Economic Review 2011). In recently,
China people tends to follow about the news of having healthy foods and there is a research that showed
that there are health benefits of consuming dark chocolate thus this became one of the major reasons that
chocolates brands plan for their marketing strategy (China Economic Review 2011). For our brand –
Haigh’s Chocolate, there are variety of chocolates that combine together with a range of healthy
ingredients such as dried fruits and nuts (Haigh’s Chocolate 2011). Therefore, our product are able to
meet the needs and wants of China consumers as we are offering a handmade chocolate with different
kinds of ingredients such as dried fruits and nuts which is healthier than other chocolate brands.
- Competition
Besides that, the competitors factors also need to be taken into account while consider to expand the
market into China. Foreign brands and joint venture played a major role under the China chocolate’s
market as under the top 10 chocolate brands in China, there are only two local brands which are Golden
Monkey and ShenFeng and the others are foreign brands (China Daily 2004). This showed that China
consumer tends to prefer foreign brands rather than local brands, thus there is potential to expands

9. Haigh’s chocolate which is our product into China market as it might able to meet the needs and wants of
the consumer in China. The main reason that foreign and joint venture brands successfully position their
product in China is product recognition. For example, Lindt is one of the most famous Switzerland
chocolate brands and it position themselves as a premier chocolate brands in the world as the ingredients
that use to produce chocolate are high quality cocoa so that the original chocolate taste are able to
maintain (China Daily 2004). Foreign chocolate brands concentrate more towards the needs of the
consumer rather than the price of the product as they thinks that price of the product are strongly links to
the brand image of the company (Allen 2010). Therefore, as a foreign brand that offers high quality
chocolate it is normal that the price of the chocolate is higher.
SWOT Analysis
We believe that the strength of haigh’s chocolate would be the good reputation among customers in
Australia. Over the years, haigh’s insisted to deliver premium hand-made chocolates to customers. As
long as we ensure the quality we delivered and establish our brand position in China, it would be our
competitive advantage over the others.
Limited distribution network is always been the weakest part of Haigh’s chocolate. By now, we only have
6 retail stores selling chocolate in Australia. Another weakness would be lack of information. As we are
new to the Chinese market, we do not understand the customer preferences or the business culture.
To deal with the new rising trend of health conscious in China, we can develop “Low Calorie” line of
chocolates or offering the “Sugar Free” sweets line.
We believe that the well-established brands and dynamic foreign regulations are the major threat in China
market, thus, Haigh’s chocolate should allocate more resources in these areas.
Market Entry Strategies

10. As for the marketing entry strategies, we had decided to use direct exporting for our product as we think
that this is the most appropriate entry strategies that should use to enter into the China market. Direct
exporting can be defined as directly selling the product to the end user through oversea or finding a local
distributer as representative to sell the product on behalf of the exporters (Andersen 1997, p.32). The
reason that we had chosen direct exporting for our marketing entry strategies is that we are able to control
towards the export process in China so that if there is any emergency situation we are able to solve it
immediately (Buckley & Casson 1998, p.541). Besides that, we are not familiar with the China market
therefore it will be easier for us to use direct exporting as we do not require so much knowledge (Brady &
Bearden 1979, p.82). In addition, we are able to get direct feedback from our customer as customers are
able to provide feedback towards the performances of our product in a faster n more direct way and
therefore we are able to come out with a new marketing strategy in order to improve the performance of
our product (Sharma & Erramilli 2004, p.2).
However, there are some disadvantages of using direct exporting as it is more time consuming and more
expensive as you have to spend more time and money into a new market by using a partners in that
market to provide you information and knowledge of the new market (Zhao et al. 2004, p.526; Buckley &
Casson 1998, p.544). By using direct exporting, we are not able to respond to the feedback of customer as
quickly as a local agent as the feedback will have to send back to the main company in order to have a
better solution (Zhao et al. 2004, p.527). It will be more risky of using direct exporting however the
exporter will only be facing a more direct risk as compare to indirect risk (Buckley & Casson 1998,
p.545).
Marketing mix 4Ps
- Price
We decided to adopt two pricing strategies in different stage: Penetration pricing strategy and Cost-plus
pricing strategy.
1 - 6 months After 6 months
Penetration Pricing Strategy Cost-plus pricing Strategy
Penetration pricing strategy
When the first time we enter to the China, our brand’s reputation is normally relative lower than other
famous brand. We tend to set a relatively low initial price in order to attract the new customers, rather
than fall over backward to make profit. During the first half year, we will sell our chocolate for $88,
which is close to our total cost, and we expect that we can therefore gain 20% market share in our
business location after 6 months.
It helps us to efficiently build up a China’s market, and strive for a market leader in China.

11. Cost-plus pricing strategy
After 6 months, we will set our price base on the total cost. We calculate the total cost of producing and
add on a profit to that price to give the selling price. According to our research, the total cost per
chocolate is around $50. Preliminary estimates that we will set $138 for the chocolates under this
strategy. In other word, we can earn $88 from each selling.
This pricing strategy is straight-forward and provides an effective method to control the cost. It helps to
ensure all costs associated with the producing are covered and generating steady profit at a known rate.
- Place
Place is one of the marketing mix elements, it represent the location and the distribution channel.
According to (Peter, 1973) point out that “place is a various methods of transporting and storing goods
which involves the distribution system.”
For the distribution system there are several channels can be selected such as; “direct or indirect” “single
or multiple channels” and “number of intermediary” (Peter, 1973). For Haigh’s chocolate it is better to
use direct marketing such as physical store on the street. This style provides a strong brand image, which
is an advantage since our brand in China is not so awareness, because people can see the brand when they
pass the store. The reason of not using the wholesalers or Agents is because it can ensure the quality of
products and understand the actual reaction of customers. The location of physical store would be some
capital cities such as Hong Kong, Shanghai, Beijing and Shenzhen. Those cities are the most competitive
cities in China (2010), therefore, the spending power and population of those city are greater than other
countryside cities. The actual physical store would also need to place at some shopping mall, and more
people can get in the store by awareness (Monger, 2007).

12. - Promotion
The main instruments of the promotional mix are advertising, sales promotion, public relations and
personal selling. Each of these components of the mix comports a distinct efficiency, a different ability to
communicate, a different general cost, as well as a distinct degree of controlling the element by the
organization (Kotler & Keller, 2006). For the business in Australia, the strategy is simple – deliver
premium hand-made chocolates to customers directly. “We made a strategic decision about five years ago
to focus on selling our chocolates in our own retail outlets, and not through a wholesaling model. We
wanted total control of our product,” Alister Haigh, Chief Executive of Haigh’s said (South Australian
Food Centre, 2010).
However, it would be a whole different story when entering a new market. Karande, Almurshidee, & Al-
Olayan (2006) suggested that promotion content is largely culturally driven, thus making promotion even
more complicated in international markets.
We suggested that Haigh’s could have a high proportion of advertising and little sales promotion in the
first year to establish the brand in China. Sales promotion is very effective in early stages of product
introduction as it gives the company the opportunity to reach targeted customers. Together with intensive
advertising campaigns, we can increase the brand awareness within a short period of time. However,
using sales promotion too often would have a reverse effect. Customers would think that there must be a
reason, say inferior quality, behind the discounted price. As for that reason, we suggested Haigh’s using
some non-price sales promotion, such as free chocolate testing or ‘buy two get 1 free’ package.
Once the brand is widely accepted and recognized, Haigh’s can then emphasis more on public relations.
For example, Haigh’s could imitate the ‘Save the Panda’ marketing campaign in Australia. Haigh’s had
developed a new product line to save Panda in China by donating part of the sales. Although the sales
figure was not very impressive in Australia, the positive brand image it brought in long run is said to be
more valuable.
- Production
The important of determent product is because the purpose of product is to satisfy customer needs or
wants. The production has three levels, and these levels are, core level, secondary level and augmented
level. The core level represents the product itself, and it is just purely the product and does not contain
any other service behind the product. Secondary level contained size of product, features packaging and
attributed. Augmented product level is all about after sales service, such as delivery, guarantee and
service (Monger, 2007). Haigh’s chocolate has very long history of handmade chocolate, and Haigh’s
chocolate has fully experience and skills about managing the production line. The core level of the

13. product would be handmade chocolate. The size of the chocolate has high flexibility, based on the
experience, Haigh’s chocolate has difference size of boxed chocolates, and customer could also pick their
favourite chocolates in store. The size of chocolates would very suit the retail market, and the packaging
of those chocolate are containing in an old school package with brown or dark green colours. China is a
new market for Haigh’s, so at the back of the package, Haigh’s could consider to put some background of
the company in Chinese, so people would understand the source of the chocolate, and build reputation of
the brand. This is the First investment for Haigh’s chocolate to entry China, and after sales service would
make extra cost for Haigh’s and hard to achieve. Industry like chocolate, there are not much after sales
service, and people might show less active to these activity, therefore Haigh’s might just focus on service
in store or at most do deliver for high amount of order around their territory.
Unit of chocolate Package
1 Paper Bag
2 Paper Bag
3 Paper Bag
4 Paper Bag
5 Paper Bag
6 Paper Bag
7 Paper Bag
8 Paper Bag
9 Paper Bag
10 Box
11 Box
12 Box
13 Box
14 Box
15 Box
16 Box
17 Box
18 Box
19 Box
20 Box
20< Box
USP:
Unique selling proposition to difference the product with other competitors, because it might help the
brand to increase competitive power. USP is something that competitors hard to copy, and that could be
anything unique in the market and valuable to customer (East, Wright, Vanhuele, 2008). Haigh’s
chocolate is an Australian brand, and Australia has a lot of nuts production, such as Hazelnuts, Chestnuts,
Macadamias and Pecans. Haigh’s can put those nuts into their handmade chocolate and that could be the
unique element for customer. When people think about high quality handmade Australian nuts chocolate,
they would think about Haigh’s chocolate, and other brands would hard to copy those elements. The
atmosphere and outfit of the store would also be unique, because Haigh’s chocolate has very long history
and the store and staffs would decorated as very old school Australian style, and that would help the
brand to stand out from the competitors and increase brand salience.

14. Segmentation, Targeting & Positioning
Segmentation:
When a brand entry into a new market, it is important to segment the target customers, and businesses
would need to segment their customers into difference groups, and those customers would respond to
similarly marketing actions (Moge, 2007). For Haigh’s chocolate, because this brand would tended to
focus on customers that purchase this product as a gifting present or souvenir, therefore the segmenting of
customer would based on demographic. The reason that segment customers into demographic is because
we assumed people from difference areas would also buy the product, and if customers are segmented
into demographic, there would be more population in the category and easier to design marketing
activities.
Targeting:
Mainly, base on our culture; there are more potential to target customers in middle class income. China is
a potential market and has chocolate and the product that launch into the market would be higher price
than other brands and better packaging. Therefore, the target customer group would be based on income,
and people in that category could be some people who travel from overseas or business people. The
benefit that segments middle class income customers is because those customers have ability to buy the
product frequently.
Positioning:
Haigh’s Chocolate position themselves as a long history brand that produce high class handmade
chocolate and packaging with a beautiful outlook. Our opinion is to position our product same as the past
which is a luxury product for gift and souvenir or even in party.
Financial Report

15. Conclusion & Recommendation
References
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