2

April 16, 2019 Critical Thinking

2.0 Introduction
Beginning with the history of Oldtown white Coffee, it started in the year 1999. Oldtown aim is to deliver high quality of white coffee to the Malaysian household as well as the food service industry. Blend 3 in 1 instant coffee is formulated by Mr. Goh Ching Mun the co-founders and Mr. Tan Say Yap the executive directors. The growth of the Oldtown were helped by the co-founders with the provision of Mr. Lee Siew Heng who is holding the position of Managing director of the company. The role that he was responsible was implementing the company vision, development and strategy. Oldtown currently exports beverages to 17 markets globally (Oldtown AR, 2017).

In this assignment, I had choose China as my host country. I will be doing research on analyzing the global marketing strategies that Oldtown adopted in China.
3.0 Deeplist analysis.
356870102870Demographics
Demographics

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Age: 0-14 years: 17.15% 15-24 years: 12.78%
25-54 years: 48.51%
55-64 years: 10.75%
65 years above : 10.81% (CIA World Factbook, 2018)
Urban population: 59.3 % of total population (Worldometers, 2018).
In china, 32% of Chinese millennials earn average below 700 Rmb per month. (Statista, 2018). Statistics is shown in appendix 1. 301625154305Environmental
Environmental

In China, water pollution is the country worst environmental issue.
339725158115Political
Political

China have banned few websites such as Facebook, Instagram, YouTube, Twitter and etc.

.

China has offered tax breaks for foreign companies (South China Morning post, 2017).
30289528575Economy
0Economy

Poverty has largely decreased in China.

In China inflation rate is averaged about 5.26 percent from the year 1986 until 2018 (Trading economics, 2018).
GDP in China was 11199.15 billion US dollars in 2016 (Trading economics, 2018). Second largest economy.
In 2017, disposable income reached 36,396 Yuan in urban and 13,432 Yuan in rural respectively. Up 6.5 percent and 7.3 percent in real terms after deducting price factors (National Bureau of Statistics, 2017). 30797561595Legal
Legal

Tariffs and regulations- value added tax (VAT) which is subject to 13% to 17% dependent on the products category.
32067591440Social
Social

China is one of the biggest coffee consumers in the world.
Population among youngsters are influenced by the western culture.
China history shows that it is a tea drinker country. 434975100965Technology
Technology

In 2017, 36.4% from the age 25-34 purchases their food through online. (Statista, 2017).

China stores are now using pay applications such as Alipay and WeChat Pay. (CNBC, 2017).
3.2 Porter 5 forces.
236220107315 Competitive rivalry (High)
00 Competitive rivalry (High)

Starbucks is of the main competitor of Oldtown white coffee. This is because Starbucks has more than 3000 outlets in China. (CNBC, 2017).

Dio coffee has captured an advantage over Oldtown white coffee as it serves variety of traditional Chinese cuisines.

254000112395Threat of substitutes (Substantial) substantial)
00Threat of substitutes (Substantial) substantial)

China is traditionally a tea consuming country.
There are many fast food restaurants that offers similar product as Oldtown white coffee such as Mcd, KFC and pizza hut which offers coffee with low relatively low price.

Local Chinese café which are offering Chinese cuisines together with coffee is considered to be a major threat.

7429576200Bargaining powers of suppliers (moderate)
00Bargaining powers of suppliers (moderate)

China raw material price has increased sharply.
23622078105Bargaining power of buyers (High)
00Bargaining power of buyers (High)

Bargaining power of buyers has increased over the few years after multinational food company has entered such as Starbucks, costa coffee, McDonald, kfc and etc.
Since local coffee shops in china has increase in competitive, it gives more power to the buyers.
31686593345Threat for new entrants (moderate)
00Threat for new entrants (moderate)

3.3 Hofstede

center104140Power Distance
Power Distance

21272593345Malaysia
Malaysia

206375102870China
China

center-152400Individualism
Individualism

184150112395Malaysia
Malaysia
196850121920China
China

center123190Masculinity
Masculinity

274320172720Malaysia
Malaysia
213995167005China
0China

center104775Uncertainty avoidance
Uncertainty avoidance

231775102870Malaysia
Malaysia
206375102870China
0China

center9525Long term orientation
Long term orientation

250825102870Malaysia
Malaysia
177800140970China
0China

18383250Indulgence
Indulgence

213995117475Malaysia
Malaysia
25527097790China
0China

3.4 Marketing strategies
4p’s, segmentation and consumer behaviour and degree of adaptation.
32194560325Product
0Product

Oldtown have different types of products which will suite all different coffee lovers.

They have 3 in1 coffee as instant coffee grows popularity in China.
47434579375Price
0Price

Oldtown uses market penetration pricing for their products to attract middle income and below.

They also are using product bundle pricing where they combine several products together and offer in a cheaper price.
398145127000Promotion
0Promotion

Oldtown have promotions on their products during the festive season with good deals (Oldtown AR, 2017).
398145117475Place
00Place

Oldtown white coffee has currently only 4 outlets at China which are in Guangzhou, Guagdong and Shenzhen. The four outlets are located at shopping mall, street road and corporate headquarter (Oldtown).
Oldtown is also selling their products almost on 100 online platforms at China.
13970072390Segmentation and consumer behaviour
00Segmentation and consumer behaviour

Targeting new generation of millennials and Gen Z consumers (Oldtown AR, 2017).
8382086360Degree of adaptation
00Degree of adaptation

Product packaging is written in Chinese language.

Focused on e-commerce as consumers in China prefers virtual stores.
.

Oldtown follows different standard technique marketing strategies in Malaysia but in China, it has adapted to the global localization which is using the polycentric orientation influenced by the local culture and also market conditions in gaining Chinese consumers confidence and trust.
Oldtown have been present since 2014 in China’s main platforms and reported to been doing very well on the key supermarket chains and also online retailers, for instance, jd.com and t-mall. (Oldtown AR, 2017.) They are also presently supported well at almost 100 online major platforms in China. A website which uses the native language might increase the consumers’ confidence in purchasing their products. This builds a connection between Oldtown and the consumers in China. Rendering to t-mall, Oldtown online flagship stores in t-mall was ranked as No.3 as in June 2016 based on coffee mix powder sales (DBS group research, 2017).
China is recognized as a tea traditional country. In that, they have come up with a white milk tea which will attract more consumers because tea consumers in China are more then coffee and expect to increase more in coming years (Statista, 2018). Moreover, Oldtown had launched the mocha flavour in China in 2017 in aiming to target the young consumers and individuals that do not drink coffee (minime insights, 2018).
The company targeted young consumers in China and it predicted that the changing lifestyle of young people in the country would increase their demand for coffee.

References
https://www.statista.com/statistics/805236/china-average-monthly-income-by-generation/https://www.export.gov/article?id=China-Import-Tariffs
http://www.worldometers.info/world-population/china-population/
https://www.indexmundi.com/china/demographics_profile.html
https://www.stlouisfed.org/on-the-economy/2018/january/income-living-standards-chinahttps://www.globalfromasia.com/list-blocked-sites-china/http://www.scmp.com/news/china/economy/article/2126115/china-offers-tax-breaks-foreign-firms-bid-boost-investmenthttps://tradingeconomics.com/china/exportshttps://www.cnbc.com/2017/10/18/chinese-q3-gdp-china-reports-third-quarter-gross-domestic-product.htmlhttps://borgenproject.org/water-pollution-in-china/
https://tradingeconomics.com/china/inflation-cpihttps://www.marketingtochina.com/coffee-market-explodes-china/https://www.cnbc.com/2017/10/08/china-is-living-the-future-of-mobile-pay-right-now.htmlhttps://coffeebi.com/2018/02/05/coffee-houses-consumers-china-brief-look/https://www.cnbc.com/2017/12/05/starbucks-is-opening-a-store-in-china-every-15-hours.htmlhttp://jiangsu.chinadaily.com.cn/kunshan/2013-07/12/content_16766328.htmhttps://www.statista.com/statistics/623672/china-coffee-and-tea-consumption-volume/

https://detail.tmall.com/item.htm?spm=a220o.1000855.1998025129.3.53e128c4pjtGeG;abtest=_AB-LR32-PR32;pvid=78e83264-08ff-4613-9ea3-81828c5defab;pos=2;abbucket=_AB-M32_B0;acm=03054.1003.1.2768562;id=533252825118;scm=1007.16862.95220.23864_0

OldTown hinges growth on China, launches RTD coffee


https://www.linkedin.com/pulse/raw-materials-sharp-price-increase-china-suppliers-mathieu-reignahttp://www.xinhuanet.com/english/2018-01/18/c_136905784.htmhttps://www.statista.com/statistics/259451/annual-per-capita-disposable-income-of-rural-and-urban-households-in-china/https://studymoose.com/plagiarism-checker

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