Consumer taste preferences in favor of foreign brands

Assignment Help Operation Management

Reference no: EM131801236

Food and beverage has been one of the fastest growing categories in China, driven in part by changing consumer taste preferences in favor of foreign brands. Mars Inc., parent company of sweet treats such as Snickers, M&M's, and Dove, decided to capitalize on this trend in order to expand its business. The company formed a strategic partnership with Alibaba, the world's largest online retailer. Under the agreement, Mars will sell 17 brands on Tmall.com, Alibaba's business-to-consumer (B2C) platform, as well as Ruraltaobao.com, Alibaba's new platform targeting China's 600 million rural citizens. The partnership benefits Mars by helping improve the brand's reach and distribution, particularly to the China's more geographically dispersed, harder-to-serve rural population. It also enables Mars to leverage Alibaba's local marketing expertise, extensive media properties, and big data insights. For example, in a Snickers test campaign earlier in the year, the brand partnered with a Chinese pop group and used Alibaba's targeting and big data analysis capabilities to maximize the campaign's ROI. In only three days, the campaign generated almost a year's worth of sales! For strategic partnerships to endure though, they need to benefit both parties. A major advantage for Alibaba is that the deal includes an “e-commerce food safety initiative” that will be managed by Mars' Global Food Safety Center in China. The Center has built a reputation for world-class scientific research and effective global food safety education. This knowledge and skill will be important for Alibaba as they continue to grow their B2C consumer goods business, as food safety is a top concern for Chinese consumers. Mars' financial gains from the partnership are yet to be determined, but look promising given the size of the market and other foreign brands' performance in China to date. China's e-commerce market is made up of 550 million consumers who made $589 billion in purchases last year alone. Should these buying patterns continue among Chinese consumers, Mars will likely be well positioned to grow its footprint in the region.

Questions:

1. Strategic partners often seek exclusive deals—in this case, Alibaba would only sell Mars products and/or Mars will only sell its product on Alibaba e-commerce sites (other brick and mortar stores would not be included in the deal). Why would these partners strike such a deal? What other alternate agreements could have been put in place? What are the advantages and disadvantages of each alternative?

2. Chocolate consumption decreased in China during the recent recessionary period in a country that is starting to opt for healthier treats and with lower chocolate consumption compared to Western Europe, United States, and Brazil to begin with. Develop one other strategy for improving adoption in the Chinese market? Explain fully.

Reference no: EM131801236

Questions Cloud

What is the best source for ethical business practices : What is the best source for ethical business practices: The individual employee, or the business organization itself?

Major elements of the modern approach to quality management : Draw a diagram and explain the major elements of the Modern approach to Quality Management which emphasizes defect prevention.

Measurement initiatives perception of participating managers : The success and failure of performance measurement initiatives perceptions of participating managers

Why organizations create capacity which exceeds demand : What are the reasons why organizations create capacity which exceeds demand? What are the strategies used to manage excess capacity?

Consumer taste preferences in favor of foreign brands : Food and beverage has been one of the fastest growing categories in China, driven in part by changing consumer taste preferences in favor of foreign brands.

Activities designed to utilize inputs to produce product : A set of activities designed to utilize inputs to produce a product or service for an internal or external customer is referred to as a(n)

The objective of the center-of-gravity technique : The average percentage of orders filled on or before the requested delivery date is referred to as. The objective of the center-of-gravity technique is to

Making products to satisfy target markets : Making products to satisfy target markets is associated with which of the key supply chain processes?

Employee hired to vet potential suppliers is performing : An employee hired to vet potential suppliers is likely performing which function?

User Account

All Pages