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Final Report

By Ronald Hunt,2014-07-04 11:07
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Final Report

    Low Fat Milk’s Overseas Development

    Process Report

     Major ; International Economics and Trade

     International Business School under

     Chongqing Nanfang Translators College of SISU

     Dec.2013

     Contents

Part1. Introduction

     1. The purpose of the report

     2. The writer of report

Part 2 .The main body

     1. The reason to choose the country and the importer

     2. Business negotiation

     3. The performance of the contract

     4. The market research and the consumer feedback

Part 3. Conclusion

     1.The advantages and problems of the importer:

     2.The summary of this business

     Part1. Introduction

    1. The purpose of the report:

    This is the low fat milk’s overseas development process report .And in this report you will see the whole process about the product’s overseas development process. Because of the first exporting to China, we do not sure the sales prospects. So, we

    choose the low fat milk. Because the expiration date of this product is long. And we can choose shipping as a mode of transportation, which can save freight cost. In general, our cost is relatively low and the risk we faced is relatively small.

    First, this report introduces the situation about the import country and the importer. And we also introduce the reason why we chose China as our market and the importer---- Shanghai Hansen Investment Developing Co. Ltd. And we also introduce the advantages about the importer---- Shanghai Hansen Investment Developing Co. Ltd in Chinese sales market. In the second part, it is the business negotiation, which including the discrimination between us and the way to solve. First, the assignment about the expense of products’ advertisement is a big problem. Though many times

    talking about it, we reached an agreement that we pay for 70% advertising expense they pay for another. If they can sale our products good and reach our requirement, we will establish long business with them. Second, there is another problem between us. They think we should use beautiful and characteristic packaging in our products so that they can sale the product well in Chinese market. However, considering our cost, it is impossible to design new packaging with low unit price. With the comprehensive consideration, we decide to use new packaging with original unit price in this time. And then, we conclude the business with the company. So the next part introduces the carry out of contract. We are satisfied with the way the importer to advertise, however, they charge a fee of all the advertisements, which makes us amazed. Through considering, we accept their requirement and agree on we only pay for the commission in advance for a half year. After a month, we make a research to know the sales situation in China .Though the analysis, we combine the situation about the import company with the citys development. We believe that the importer can

    complete the 30% share by agreement. In report, the forth part is the market research and the consumer feedback. After our new products into Chinese market, we make the research to know the sales, the consumers’ feedback on our products and the market shares about our products——low fat milk. And then, we analyze the results about

    our market researches and know that we are easy to break into Chinese market. But the higher price about our products and the low level of consumer know are the main

    problems. So that, we need to strengthen advertise our products and reduce the price of our products. This is to say, we also need to reduce the cost about our products.

     In the last but least, it is the conclusion about the report. This is the first time that

    our company has entered the Chinese market and established business with Shanghai Hansen Investment Developing Co. Ltd. We found some problems about the agency cost and the announcement about our products in China. And then, we make the corresponding ways to improve. We can take some advertisements in network and telephone; put our advertisement in a small game in the mobile phone. In all, we also

    need to make the corresponding changes and do some improvement on our products.

    2. The writer of report: the sales department minister.

     Part 2 The main body

    1. The reason to choose the country and the importer

    China has large population so that is a vast market. And with the economic development, China has become a dairy product in emerging market. In recent years, China has opened their foreign trade market so that it is easier for us to export in China. And as the improvement of Chinese people's life, the demand for milk is increasing. And with the increase of obesity, the demand of low fat milk has expanded. Therefore, our product the high calcium low-fat milk will have broad market prospects in Chinese market. China is an important step to expand Asian’s market, once opened the Chinese market, our company will has a place in Asia’s dairy market.

    With the rapid growth of importing snack foods in China recent years, Shanghai Hansen Investment Developing Co. Ltd. has actively participated in domestic snack food procurement trade. For decades, the development of the company has obtained remarkable achievements. It is through the ISO9001-2008 international quality certification for ten consecutive years and fully implementing the ERP information management. It also has won the title of the class A and class AA enterprise. So the company provides customers with effective fast good faith professional import and export trade and agent service, won the domestic and foreign customers trust and praise. Shanghai Hansen investment and development CO., Ltd nearly three times the

average annual import and export volume 300 million U.S. dollars or

    more .therefore ,the company year after year won the national export 500 and 100 companies in shanghai glorious title and access to the shanghai Municipal Government issued the export contribution sliver, bronze.

    At present, the company's business scope has changed from the original single textile supplies to dairy products and all kinds of food. And it is the large comprehensive professional foreign trade company which has foreign send qualification. Besides, the company has a franchise qualifications include: dairy, olive oil, grains, meat and so on, which helps to save lots of time and storage costs. And it also becomes easy to through the customs.

     There are some differences between Shanghai Hansen Investment Developing Co. Ltd. and traditional enterprises in import and export agent services. The company through good qualification and rich resources, intensive conform the buyer (the seller), export enterprises, logistics companies, customs, financial institutions such as the import and export trade links, really realize the comprehensive service functions. It makes the enterprise can achieve the whole in and out of the service outsourcing business.

    The company pursues intentions achievements in quality ,cooperation and the

    creation of wealth “ the entrepreneurial spirit, they sincerely welcome customers to

    negotiate snack food import and export agency business and are willing to major domestic dairy manufactures, buyers work together to develop prospects. So, according to Hansen’s resources we can open Chinese market quickly, we think it

    could be reliable partner.

    2. Business negotiation

    (1). To develop our market in China, we require the importer advertise our products in their country. So we hope them could pay for the 50% advertising expense, we pay for another, because we don’t know the advertising situation in China. But the

    importer doesn’t agree, they think we quote the CIF Guangzhou, all of price is very expensive to pay, they hope we can pay for all the advertising expense. But to

    consider, this is the first time to deal business between us in China, we need they help us bear some risk of product promotion, it can build reputation between us and be available for we cooperate in future. Though we consultation about that for many times, in the end, we decide that we pay for 70% advertising expense and they pay for another. If they can sale our products good and over 30% in the dairy industry during they start sale in 6 months, we will consider pay for all of the advertising expense in future. The first time, we need the importer as our agent to execute the advertisements, and transmit the report about every expense of advertising each two weeks. We will pay for it every month by telegraphic transfer. But they think it not convenient for them, they need us send our worker to supervise the implementation of advertising and to learn the advertising market in China, After considering we accept their idea and we will send three people to China and to e-mail report to company every week. (2). As usual, for the products we use the general packaging, but our importer said Chinese people like beautiful and characteristic packaging, it is benefit to sale the products, and the market will be lager in China, it is a good idea. But we need design new packaging and make out it. It also large expenses for us. First we need design a sample which can satisfy consumers require. Second we need to make is out and maybe change the casing box, so we require they pay for the appropriate fee, they are have no objection. We make out five packaging samples by our professional. Finally they choose two. Owing to the new packaging, we change another box to casing them. Because the huge expense we need to raise the unit price of our products, they are not agreeing with it. They think high price is not accepted in China, and they also have high tax, we think it is not good for us to develop Chinese market in China first time. So we think again and decide this time we use usual unit price, because we can use new packaging to sale to other countries maybe it is better market, but we require that the box price need they pay for additionally. If the product has a good market, when the second time and more, we will use new unit price for them and raise the threshold of sales. It is a good way for both of us to make a profit.

    3. The performance of the contract

    (1). After the importer received our products and all of the import and export procedures are accomplished smoothly. As their required, we send three people in our company to China to help and supervise the importer precede the publicity by advertisements and other activities. On the basis of report, the importer makes severe measures as follow. 1).they commissions the famous advertising agency and requires the pop star as the image ambassador. They apply for putting the advertisement in the TV prime time and playing in television channel which having highly audience rating. 2).they have putted the products in many supermarkets, every markets are required to propagandize the commodities for one week at least. They use the way to buy one (a box) and give a beautiful bottle or a T-shirt with cute design or other snakes by lottery. 3).they made the picture poster to stick to the buses and people can see it everywhere. We think they are good for advertising our products. But the importer presents that they need to charge a fee of all the advertisements. Its amazing, and they said

    advertisement is not included within the scope of their business. We need pay for the other service fee, through considering this is first time deal with them, so we accept their requirement and agree on we only pay for the commission in advance for a half year. The commission is 2% based on the advertising expense we pay for every quarter.

    (2). It is had been a month when the products received by importer. We want to learn about the sales situation in China, As agreed they sale goods over 30% share, they can not pay the advertising expense, so we research the sales channels of products. The importer use all of their resources to sale the products. As we know, they not only business in Dairy but Snack foods, Beauty and Personal Care, Health care products and more, so they sale the products to all kinds of supermarket, Patisserie shop, Beauty Shop, Health food stores which do business with them, It is surprise! That a great idea to sale, it is not only to sale but to advertise. And it is looks like to say that the products are health and it can keep you be younger. On the

    another hand, the importer located in Shanghai China, it is a developed city, the financial center of China, with the developed logistics industry, they can distribute to all over the country. Around the Shanghai are high developing cities, the Chinese is

    pay more attention to health and safe food, the mother believes that foreign dairy is much healthier and safer to their children than domesticate. Old man in upper-class family also need exclusive dairy, so they see the young man especially the children on the education and the people with high quality of life as their sales target. So, when they distribute the products, they choose the supermarket near the upscale residential district, the campus and the downtown area. We think the importer expected to complete the 30% share by agreement.

    4. The market research and the consumer feedback

    This survey is to know the market acceptance and share about our

    products——low fat milk. Because culturesocietypsychology and age influence

    consumers behavior , we designed some questions to learn about our consumers market share. In fact, we issued 1000 questionnaires and back 960. The survey consists of 56% youngest27% adult and 13% old. In order to as far as possible to

    find closing to the actual, we are from the questionnaire’s design and analysis carried out repeatedly demonstrated. In the survey of the choice is also all over the various sectors of the groups with a certain representation. So this survey is a typical market research and the consumer feedback.

     Survey results analysis

     1).12% students buy milk everyday ,35%students buy milk every week.

    2).63%Chinese think that foreign dairy product is better, 37%Chinese think national product is better.

    3).According to the survey, 54% Chinese would like to buy foreign dairy product, 45%only buy national product, 81% buy all.

    4). 67%investigators know low fat milk, 21% investigators think low fat milk is beneficial to body.

    5). According to this survey, we know that almost 21% know our products and about 11% consumers buy our products.

    6).About 35% consumer think that our products’ price is so high, and 37%

    consumer think it is acceptable.

    7)10%buy milk in 100ml bag,45%buy 250ml,17%buy 500ml,28% buy 1L

    8).Competitor analysis7% consumers buy our products, 57%consumer buy the

    other famous company’s product, and some foreign share a lot.

    9).Market share analysis: we share about 25.3%, the other share about 40%.

    According to the survey and analysis, we know that , due to the state of china’s

    dairy industry ,we are easy to break into this market .Our products could get an insight in this market, but our product’s price is bit high, so about 35% consumer

    can’t accept it. As a result, we need to reduce the price. And then, according to the

    consumer groups and the market, we need do advertisements more for youngest. To competitors, we need to expand the variety of our products. All told, we need made improvements in this aspect:1) Product packaging: we need to make the corresponding changes in the form of packaging. And the packaging forms for the crowd ensures the unity of packaging style, bright colors and the visual impact. And in order to personalized products, we make the big packaging products for the old .While for the young people, we make the small packaging so that they can carry it convenient. 2) Taste: taste is one of the most important factors in consumers’ choice of beverage products. So the products taste must conduct consumers' testing.3) Increase the brand marketing strategy: according to the survey, we know that our product is little famous but with lots competitors. So in order to increase our product’s popularity, we need strengthen brand building. We can strengthen the advertising on the Internet and mobile phones.In the time of mobile Internet, we need increase in mobile Internet advertising. At the same time, expand sales channels, internship specialization, large-scale sales.

    Part 3. Conclusion

    This is the first time that our company entered the Chinese market. Because Chinese is a large market, we think that putting our products into Chinese market is a very wise choice. We hope through this product can smoothly open the Chinese

    market. Of course, there are also appeared some problems when we discussing this project .But we have made the corresponding answer here.

    1. The advantages and problems of the importer:

    1). Advantages: The importer is among the highest in the industry in China, and their company has done a lot of this aspect of the import business. Besides, it has high credibility and deals problems fast, which helps us a lot. They can help us solve some production problems in China, which reduce the burden for our company. And under the company there are many retailers, it can distribute the goods to retailers directly. It is very convenient.

    2). Problems: we are first cooperated with each other but they asked 8% of the agency cost, which makes us feel very not cost-effective. But we are actively negotiated with each other and want to reduce the agency cost to 5%. And they agreed with us so that we conclude the business.

    At all, we think Shanghai Hansen Investment Developing Co. Ltd. is a good

    partner, so we also want to corporate with it. Hope we can establish long-term trade relations with this company.

    2. The summary of this business

    Although we do many advertising on TV to show our company and our products, many consumers even do not know our products. Because this is the first we put our products in Chinese market and there are many foreign products so that the market is very competitive. And this way is too single. In order to expand our markets, we can strengthen the advertising on the Internet and mobile phones. Now, the world is a very development information times, the network and telephone in everywhere which gives us a good plat to advertising. So it is necessary for us to do some advertising on network and telephone. We want to contact with each big click volume on the Internet network operators. And then discuss with them about putting some our advertising in a certain time period. But as we know, the cost is equivalent to 20% of the television advertising costs. It is very cheap and makes us save many money in which we can use to do more advertising. So it is a good things to our company .And through this

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