For any organization, whether its products will be sold or bought by its target customers largely depends on how it prices the products. Pricing is even more a delicate marketing tool especially in international marketing where international companies face challenges ranging from additional costs of operation due to lack of experience curves to unfavorable tax schemes for foreign companies.
The ice cream market in china is basically cluttered with many companies now competing on prices, for instance Walla did slash its prices for the different ranges of ice cream by 20-30% in the year 2007, (Wang Yung 1). For this reason in order to prosper Marble slab ice-cream will seek to offer a relatively affordable price (slightly higher than the lowest priced ice cream in the market, but lower than the highly priced,) for its product ranges for both the single and double scoops. This will be possible through investing in current ice cream production machines that embrace the modern technologies thus help reduce on the operational costs and initial costs that are always higher for international companies entering new markets. This coupled by offering quality to the customers will provide values for the price charged.
For the products to reach their target customers, they will have to be transported or made available to the customers/consumers at their most convenient locations. (Wang Yung 1).In china the so called the big five market players in the ice cream industry that command a combined 57% of the market share namely: Mengniu, Yili, Walls, Nestle and Meadow Gold are already employing distribution tactics in a bid to edge out competitors from the industry and keep of new competition. (Wang Yung 1).For instance, Nestle has decided to consolidate its distribution in china to reduce costs and serve its customers more efficiently.
Due to the fact that cold storage system is not fully developed in china, in that each year cold chain logistics actually results into massive loses by companies and only 15% of all perishable products are actually transported by refrigerated vehicles or trucks. (Bolton 4) For this reason, distribution is actually a big problem especially for a new company that may have not developed lasting distribution networks and relationships with its core markets.
For this reason Marble slab ice cream will seek to strengthen its production capacity throughout the countries major cities like Beijing, Guangzhou and Shanghai, through the establishment of processing plants in the stated regions or towns to help reach out to the target customers more easily and avoid the trouble of transportation.
This strategy will be deemed fit in that in establishing the ice cream processing plants across the country, helps reduce the transportation cost as well as the losses due to spoilage of the products and raw materials(Milk) that would now be sourced locally and thus do not need to be acquired else where.
In addition intensive distribution will be quite appropriate since ice cream Is a fast moving good(FMG)and thus need to be available to the consumers as near as possible, also the expansion of production destinations will also enable the company tailor its specific products or brands to specific regions under which the production plant is located.
Bolton Jamie, Creating an effective china “cold supply chain”, 2006, pp4-5Accessed on
Wang Yung “who will become ice cream king” China business weekly 20th march
2007:1Accesed on 3rd Nov 2008 from http://chinadaily.com.cn/english/doc/2005-03/20/content_426484.htm