Our company Bio Baby, as an international organic whole foods distributor, mainly provide German baby product to the Chinese Market. The main goal of Bio Baby is to offer high quality and imported baby product, especially infant formula and baby food, to the young generation who become parents in China. Since the year of 2008, when the scandal of local produced formal has come out in China, parents are tending to trust more in buying imported formula. For that reason, somewhere in Germany, the DM store has the policy of limit purchase for tourists who would rush into the store and buy lots of baby formula.
As the composition of the baby industry has a wide range of baby products, the key question is what products might attracts the Chinese customers. Through our research, we have already got the idea of what kind of baby product are currently more prevalent and what kind of products have great relative market potential. So our product portfolio will more importantly focus on the baby formula, and organic baby food like baby juice, snacks, cereals, and canned baby food at the same time. 4.1.2 Product Packaging To a large extent, e-commerce is a generational thing, so Bio Baby is going to become a leader in the market of imported baby product in China.
The packaging of our product of formula and baby food will be consistent with the original Hipp holding products, and we would also print the Chinese translation of each category of the product and their ingredients on the packaging. For that, the customers might recognize the brand as Hipp has already penetrated in the global market, and the translation in the packaging may also gain the trust of our consumers as the high standard baby product we offering are customized to the Chinese market. With the right features, the baby products Bio Baby are offering would have the opportunity to stand out in the Chinese baby market, and the costumers would definitely easily to find out what we are offering. 4.2 Pricing Cost is one of the important bases of product pricing.
Generally speaking, the price should reflect the cost factor as far as possible, if the cost is high, the product price is also high, otherwise the profit will be greatly affected. But in the fierce market competition, in the buyer’s market atmosphere, the product cost should not be overpriced. For example, because of the high cost of products due to various reasons, positioning the product at a higher price will often cause backfire and lead to a big profit reduction. Theoretically speaking, if the product price is high, the sales volume will be reduced so reducing product cost is always a problem that a company must pay attention to, and for that reason only when the cost is reduced, the cost of the product can be properly connected with the price to obtain satisfactory profit. Bio Baby as a high-end baby organic food online shop, would spend more cost to those local baby food producers. Therefore, our price would set the price higher than those local baby products.As Bio Baby is aimed to become an online distributor of high standard baby products, we are mainly focus on the middle and high-end markets of the customers.
Since the most important matter those consumers are considering, is the quality of the product itself, we are intending to structure our pricing on a higher price range than the other baby food in the Chinese market. On the other hand, the market value of maternity and baby product keeps rising staidly in the past seven years (table -1), we would not consider the low-pricing strategy. Because as the brand recognition of Hipp is famous for more and more parents in China, and Chinese consumers have comparatively high brand dependence. Our supplier—Hipp Holding, claims the quality and the brand itself would make our product popular in China because of the brand effect.
And there if an old say in China said that “Good and available, it is surely more than the money it spends.” So the consumers for baby food are more willing to trust us even when our price is higher than the local baby food producers, therefore the recognition of Hipp is a good advantage we can take on our marketing strategy.(table-1 Market value of Maternity and Baby Product in China 2010-2018) Bio baby will take good use of the advantage of the brand recognition and quality advantage, promotes the profit promotion by guarantying the market share through comparison strategy. We will provide the consumers a sense of stability, by not make a large price adjustment, which claims a company characteristic of price stability, quality stability, and target group stability. 4.3 Distribution 4.3.1 Target RegionWe choose our specific market region in China in the area of Yangtze River Delta—the southeastern part in China.
Yangtze River Delta ( table-2) generally comprises the triangle-shaped territory of Wu-speaking Shanghai, southern Jiangsu province and northern Zhejiang province of China. The area lies at the heart of the region traditionally called Jiangnan (literally, “south of the Yangtze River”). The Yangtze River drains into the East China Sea. The urban build-up in the area has given rise what may be the largest concentration of adjacent metropolitan areas in the world. It covers an area of 99.
6 thousand square kilometers (38,500 sq. mi) and is home to over 115 million people as of 2013, of which an estimated 83 million is urban. If based on the greater Yangtze River Delta zone, it will has over 140 million people in this region. Having a fertile soil, the Yangtze River Delta abundantly produces grain, cotton, hemp and tea. This region is the most promising economic sector in China for its fastest and largest growing economy, where has a population of 140 million people. The most significant figure if that, it occupies over 21% of China’s GDP, and has already became the world’s 6th largest economic center.
(table-2 Yangtze River Delta) In our consideration, the region of Yangtze River Delta has a comparatively high level of urbanization, and the urban residents have higher incomes and living in a better live standard. For that reason, our target consumers would be relatively well-educated and open-minded who are more willing to purchase the imported high standard product, and chasing the trend of online shopping. 4.3.2 Headquarter & Warehouse In the location of our Headquarter and the warehouse as well, Bio Baby will set the place in the city of Ningbo, which belongs to Zhejiang Province, and is very close to Shanghai. Ningbo is a costal city, which promise the convenience of sea transportation.
The land area of Ningbo city covers an area of 9816 square kilometres, among which the urban area is 3,730 square kilometres. The total area of the whole city is 8355.8 square kilometres; the length of the coastline is 1594.4 kilometres, accounting for about 24% of the province’s coastline.
The city has 614 small islands, with an area of 255.9 square kilometres. In addition, Ningbo is also an important transportation junction in China, so the logistic in Ningbo is also efficient for its high dense of railways and highways, so that we can get full use of their land transportation because of our warehouse.
On the other hand, to set our warehouse here in Ningbo, is a perfect location to our market distribution, since its only two-hour drive to Shanghai the most economic developed city in China, and the expense of house renting is also lower in Ningbo compare to Shanghai. Through this choice, we can also reduce our cost of expense. 4.4 Promotion 4.4.1 Website As an online organic baby food shop, Bio Baby is basically relying on the promotion through the Internet. We are using the promotion experiences of some existing online shops that have already make successful achievements by selling products of well-known brand.
The business model of Bio Baby is the Website to determine what consumers will buy, since our products are specific category and there’s not that much variety to chose compare to a grocery store. So we are going to put our leading products—like formula and baby snakes, in the front page of our online shop with their price and description, so that the consumer will have a direct idea on what to buy in our shop. Consumer behavior mainly depends on the purchase desire of consumers, and this desire is very vulnerable to external factors such as business promotion, with strong inductive.
Brand-name products are more willing to pursue in the course of consumers’ purchase. Brands represent the consumer’s concept of consumption and reflect the tastes of buyers and users. The products themselves also convey the story behind the brands and have obvious design concepts. 4.
4.2 Social Media The promotion through social network is the core of modern marketing, Bio Baby could definitely start early in the campaign through Weibo and WeChat for pre-publicity to expand our influence. As WeChat is one of the widely used social application among Chinese people, which has a large number of highly active users, WeChat itself has been constantly trying to innovate, expanding the new features with the band. Bio Baby therefore would create an official account to constantly update the news about our shop and product, and customers who has add our account to their list, will get coupons in our shop.
And we will also promote some discount on some specific Chinese event, like 11th November—the shopping day for Chinese customers, we will set the time alert of those discount, so that a limited time membership would emphasize the joy of buying in the shopping process to our customers which will bring us the domination in the whole online shopping process. 5. Entry Mode People used to emerged markets only by assessing the macroeconomic and political elements, however, recently people pay more attention to other elements like long-term market capacity, cultural aspects to measure cultural distance, competitive force of an industrial sector and customer receptivity .(Sakarya et al., 2007). Our entrance strategy for the Chinese organic food market in the region Yangtze River Delta is building a partnership with Hipp Holding, and selling our product on a very famous online merchandise—T-mall as our platform.
Bio Baby would certainly utilize the business partnership with Hipp Holding in combination with online platforms as core business concept.Since T-mall is the No. 1 among all Chinese B2C websites, and has more than 70.000 International and Chinese brands. Bio Baby could simply use the concept of the existing online brand operator stores (table-3), which had already benefited from T-mall’s logistic and its buyers the number of which is over 150 million. Since T-mall accounts for 47.
6% of Chinese online retail market and has became the 18th of the most visited online shopping platform globally and the 7th in China.In terms of getting the license to be able to circumvent the trade barriers, and to get high return of investment, we are going to use China Business Consulting (CBC) to be our licensing partner. Penetration of the foreign market requires Bio Baby to a change in how the perception of customer needs in new markets, maintaining a referral capacity competitiveness, maintaining a high level of quality and care for its steady rise, adopting an attitude of respect for habits customers in other countries, using a personal knowledge of several languages and to maintain constant desire to continuously learn from what happens on the world market.
In the specific situation of China’s e-Commerce marketplace, we are devoting to search the appropriate management method of products and services. With the help of CBC, we would also get start to the evaluation of our market strategy, process and partner right after we get our license.