Elevation TrainingMask
Global Initiative
China & Germany

Table of Contents | Executive Summary | 1 | Proposal NEI | 2 | Company Information | 4 | Product Information | 5 | Preliminary Indicators of Need | 6-11 | China | 6 | Germany | 10 | Industry Information | 11-18 | China | 11 | Germany | 14 | Competition Information | 18-22 | China | 18 | Germany | 19 | Target Audience | 22-24 | China | 22 | Germany | 23 | Ch 1: Globalization Imperative | 14-18 | Ch 2: Economic Environment | 18-21 | Ch 3: Political Environment | 22-23 | Ch 4: Legal/Regulatory Environment | 24 | Ch 5: Global Cultural Environment | 27 | Hofstede’s Analysis | 31 | Ch 6: Global Market Research | 33 | Ch 7: Products & Service for Consumers | 35 | Ch 8: International Marketing Channels | 37 | Ch9: Communication with the World Consumer | 39 | Ch 10: Pricing Decisions | 40 | Final Decisions | | Work Cited | | Appendix | ## |

NEI PROPOSAL The United States currently has the world’s strongest economy and contains a labor force of 155.4 million as of 2013, including unemployment. When compared to the year 2010 we had 154.9 million people in the labor force, giving a pretty stagnant amount of labor over these years. Manufacturing as well as other fields of work such including transportation and extraction make up a large portion for labor (20.3%). Sectors with managerial and technical positions contain the largest (37.3%) and sales are the second highest (24.2%). These figures come from the year 2010 and have remained stable when compared to the labor force of today. When we look at the labor force for our potential host countries, the estimates seem positive. China has become second largest in the world in GDP in terms of economic size and population. The U.S. is the only country that is currently larger. It is estimated that China had a labor force of 797.6 million in 2012, and 780 million in 2010. This is a much more significant growth compared to the U.S. China also has the largest labor force in the world while the U.S. ranks fourth. Their occupation was fairly evenly divided between service (36.1%), agriculture (33.6%) and industry (30.3%) during the 2012 period. Our second potential market, Germany, had a labor force of 44.2 million in 2013 with dominating a majority in services (73.8%) and industry (24.6%) during 2011. This has remained fairly stagnant over the years. Germany has the fifteenth largest labor force in the world and has the fourth largest economy by GDP. (CIA World Fact Book, Economy Watch) In terms of revenue, United States takes the top spot in the world, with a GDP of $16.72 million during 2013. This has seen subsequent rises in the previous two years. Budgeted revenues for the US are $2.849 trillion, with 1 trillion from social contributions. When looking at the amount of money made in exporting by U.S. the total for 2013 is $1.575 trillion, a 14 trillion dollar increase from the previous year. The United State’s top exporting partners are its neighbors, Canada and Mexico, with China trailing at number three. The top exported good for the U.S. are industrial supplies and capital goods. However, importing is almost reversed; China in the number one importer followed by Canada and Mexico. The U.S. spent $2.273 trillion on imports during 2013; this has decreased by $30 trillion since 2012. The most imported goods for the U.S. are industrial supplies, capital goods and consumer goods. It is estimated that the U.S. will soon fall behind China as the largest economy in the world. It’s projected that the effects of this new takeover could cause GDP (PPP) of the US to fall from 18.87% to 17.68% during the 2018 year. With these figures and numbers in mind, it appears our plan for exporting our product into Germany and China is very feasible. Of course, there are the factors involving additional costs for distribution, as well as taxes and tariffs that will affect the price and profit margin for the product. However, our product is currently produced in China. This will allow us to produce from within the country without any exporting costs, as we will see with Germany. Additional production will be required for China, but the costs of exporting will be very small. We will only need to factor in ground distribution in China of this product to appropriate locations. This will aid to our implementation in China, but again, costs will be higher for Germany but to exporting and tariff costs. Additional resources will be allocated in this aspect relative to the amount of sales we begin to see. China is expected to overcome the United States and have the largest world market share. The dollar amounts for the GDP and GDP (PPP) for China reflects this. A high $13.39 trillion in GDP (PPP) in 2013 has continued to rise with almost a trillion dollar increase since 2012. The GDP from China, although not completely accurate because it is a fiat estimate and not the market, estimates $9.33 trillion in 2013. Their budgeted revenues are $2.118 trillion. China is the largest exporter at $2.21 trillion for 2013. Primary exports for China are electrical and machinery, motor vehicles, natural resources. The highest exporting partners for China are US followed by Hong Kong and Japan. China is currently the third largest importer at $1.95 trillion during 2013. This is up $177 billion from 2012. The top imported goods are similar to the top exported goods. The top importing partners are all Asian based South Korea, Japan, Taiwan and the US. (CIA World Fact Book, Economy Watch)
Germany is a leading exporter in Europe and the largest economy. Their GDP (PPP) is estimated to be 3.227 trillion in 2013 with a steady rise over the past two years. This places them as the sixth largest economy in the world. Their accumulated GDP was $3.593 trillion during the same year. Germany has revenues of about $1.626 trillion. Germany is the fourth largest exporter with an amount of $1.493 trillion for 2013. Exported goods from Germany include electronic products, machinery and pharmaceuticals. The largest partners in order for exporting are France, the United States and the United Kingdom. Imported goods estimate at about 1.233 trillion and places Germany at fourth for world imports. They increased in imports by 11 billion between 2012 and 2013. Sources for Imported goods include the same types of goods mentioned in their exporting. The strongest importing partners with Germany are with the Netherlands, France and China in this order. (CIA World Fact Book, Economy Watch)

COMPANY INFORMATION Casey Danford founded the privately held company TrainingMask in 2010. Casey started his shop locally in Cadillac, Michigan, his hometown. Danford released his first TrainingMask 1.0 to the public after keeping the mask as his secret for a while to only premier MMA athletes. Once he realized how big this mask could get, the company took off immediately. In May 2012, TrainingMask released their TrainingMask 2.0 model which is still their current model to this day. Since releasing the TrainingMask 2.0 they have sponsored several of the top Professional MMA fighters all over the world. TrainingMask holds one hundred percent of the market share for portable elevation training systems. Their products are one of a kind and fully adjustable. There are somewhat comparable products on the market that simulate elevation, but are hooked up to separate machines that leave a person bound in one location. That is the uniqueness to the TrainingMask. The 2.0 mask can be made as versatile as the customer would like. The customer can simulate training up to as much as eighteen thousand feet and down to as little as three thousand feet while wearing the mask during workouts. Training Mask’s mission statement is “Here at Elevation TrainingMask, we bring the elevation to you. We are committed to our customers one hundred percent; helping athletes to become one step better than the competition as well as improving one’s overall respiratory health” TrainingMask is a privately owned company and we were limited to only a certain amount of information. (Could Not Find, # of Employees, Revenue, and there isn’t any financial stock prices available since they are a private company)

PRODUCT INFORMAITON The Elevation Training Mask was originally created for athletes that wanted a new way to train and gain a competitive advantage. This product is meant to simulate high altitude training which will increase lung capacity, mental focus, and make your workout more efficient. This is a New-To-The-World innovation that has found success in not only athletes, but the medical field also as a tool to strengthen patient’s lungs. This product is patented (PAT.8.590.533 B2) as a “Resistance Training Device” that helps condition the lungs by creating pulmonary resistance and strengthening the diaphragm, making your workout seem like it is being held at high altitudes.
Image 0.1
Image 0.1
The Elevation Training Mask starts with a rubber piece that covers the nose and mouth. This piece has three holes made into it which hold the altitude air resistance chambers. The two chambers on the side of the mask is where the resistance can be adjusted to your liking. There are six different resistance settings that the mask can be set to. The easiest and recommended first setting is three thousand feet. After that, the resistance can be increased by increments of three thousand feet all the way up to eighteen thousand feet. Image 0.1 shows the how each piece is different how it is applied to the mask. Image 0.2 shows how each resistance level is reached when setting up the mask.

Image 0.2
Image 0.2
The last major piece of this product is the neoprene mask cover that goes over the mouth piece and straps around your head to hold the product steady. This is where multiple different styling options come into play. Since the release of this product in 2010, there have been hundreds of different designs for the neoprene mask cover. Image 0.3 shows the mask in its entirety in just a few of the different designs.
The Elevation Training Mask has a pretty set pricing scheme for their product and accessories. The pricing involved with this product is as followed: * $79.99: The Elevation Training Mask with the original black neoprene casing. * $4.99-$24.99: Various sleeves for your training mask. (refer to Image 0.3 for examples) * $2.00: Head strap to increase stability when in use. * $11.99: Cleaning Spray * $19.99: New resistance valves in various colors.
These prices will vary only slightly in different circumstances like bundle prices, bulk purchasing, and used products through places like Ebay or Craigslist, but this pricing scheme is what should be abided by when considering retail pricing.
As an innovation to the resistance training device brand, the competition for this product is almost nonexistent. There are very expensive machines that can be used to simulate the same effect, but it is not something that an everyday person can use. It is hard to say what incoming competition will come up with, but we expect something similar to our product to make its entry into the market at some point in time. For now we have complete control of the market share and that doesn’t look like it will change any time soon.

INDICATORS FOR NEED: CHINA
Currently China is the number one country in the world with the highest population consisting of 1.34 billion individuals. China’s current population consists of 19% of the total world’s population. With such a high number of individuals residing in China it appeals to many companies around the world to try and market their goods and services to this market however; China is one of the most challenging markets to enter. China is one of the most industrialized nations in the world meaning that their country has thousands of factories that produce goods and services that are to be shipped around the world to companies who sell those goods and services in their store however; the one problem with all the factories in China is that they rely on the burning of coal for energy in their factories in order to produce all those goods and services which isn’t good for the environment and is one of the major contributing factor to China’s pollution problem.
Our company Elevation Training Mask which is based in Cadillac, MI is a company that manufacturers Elevation Training Masks which is a resistance training mask that individuals use to simulate training at high altitudes ranging anywhere from 3,000 feet all the way up to 18,000 feet. This mask is used by individuals who are athletes who use it to train in order to strengthen their lungs however; this mask can be used by the average person because it has many positive health benefits that a person can gain from.

We chose to export our Elevation Training Mask to China because they have a major pollution problem and the Chinese people could greatly benefit from using our mask in order to improve their overall health. One way that these training masks would help improve the overall health of the typical Chinese person is our Elevation Training Mask has a flux valve system which not only helps to strengthen your lungs by simulating training at high altitudes but also our mask would help filter the air that you breathe by an added feature that we have incorporated into our product. When we take our Elevation Training Mask to China our focus will be on those individuals who value sports and are competitive individuals who want to better their bodies. These individuals live in urban areas where they have access to gym memberships. These areas where the Chinese people live are heavily polluted with smog and they don’t have access to cars so they either walk or bike into work in the heavy polluted cities so therefore not only would Chinese athletes benefit from wearing our training mask but also the typical Chinese person who is a healthy conscious individual who walks or bikes into work on a daily basis. When marketing this product to the Chinese people we may want to sell this item essentially as a piece of medical equipment which may open our market meaning more revenue for our company.
Figure 2 – Shows the current and future areas where individuals live with the highest pollution rates.

Although companies like 3M are selling disposable masks at an affordable rate, disposable masks do not offer the same health benefits and environmental friendliness as our product provides to the end user.
In China there is demand for disposable surgical masks that you would see someone such as a doctor or nurse wear. Companies such as 3M provide disposable masks that people walk around in downtown China with that they currently use to help combat air pollution in the city at a costly expense as they have to continue to repeatedly purchase a mask as they become dirty or worm out. Our company caters to this market in that we offer a healthy air fitness mask that helps not only strengthens your lungs but also helps filters the air that you breathe. This mask allows the user to purchase a mask that is able to be used multiple times rather than only being able to use a mask a hand full of times.
Because of the high toxicity in the air in China, mask are a hot item. In ABC news report 500,000 masks were sold in 2 days when China had issued a high health watch for its people because of the high levels of toxicity in the air. The EPA also known as the Environmental Protection Agency deems any tiny particle matter 2.5 micrometers or smaller a hazard to one’s own health.
When we take our product to China we will want to have a clear set of distribution channels setup before we enter the market. This will include having a supplier who has access to ample amount of rubber and enough neoprene material because that is core materials that go into making our product. Our product is currently being manufactured in China so we will want to use that to our advantage meaning having the product be able to be in the hands of consumers without a complex set of logistics. Currently our product is only sold online so we will need to establish a new set of ways that the consumer will be able get the product. Our company may have great success marketing our product through direct marketing where you directly sell to the consumer through mail, telephone, or door to door sales where the salesmen demonstrates the product to the consumer and talks about the features and benefits. This approach has been a huge successful for companies trying to expand their product into the Latin America and Asia countries. Another option we may want to pursue is to contract with an export management company to successfully launch our product into the country where they take full or partial responsibility depending on the involvement you want in promoting our goods and they would also handle credit arrangements, market research, and take care of financial and legal issues in the foreign country.
A third option that our company may want to pursue is to hire an agent middleman. Agent middlemen work on commission and arrange for sales in foreign countries. By using agents like these our company assumes all trading risks involved and ownership of the goods. When conducting business with agents such as these it will be important that we establish a clear set of guideline policies and dictate what price we want to charge in terms of selling, and require that these agents provide sales records to show not only that they are trying to sell quantity but also to set goals for them to achieve in terms of sales. It may also be helpful for our company in order to find the right distributor to consult with Chinese consulting firms, trade organizations, government agencies, or get referrals from other similar companies in finding the right way to distribute our product successfully in China. When we export our Elevation Training Mask to China we will want to establish a local sales team in China in order to get the numbers we want in terms of selling product because the more we sell the more money in our pocket. By having a sales team in China is another way that we are able to be in tune with our market because we will be able to work with a knowledge sales staff who will be able to give us knowledge about this market. This sales support staff will target sporting good and health fitness stores. In order to effectively promote our product we will need to use a combination of techniques. We will want to put out a press release stating how our product works and that we have incorporated a filter into our mask that helps filter the air that the typical Chinese person breathes and stress the health benefits of wearing our mask and how poor the air quality is in China. In terms of promoting our product there are a couple of different avenues that we could pursue. We could promote our product at health and fitness expos such as at the 2014 Shanghai International Health, Fitness and Wellness Expo where companies come together to promote their health and fitness related products. We could cross promote our product with health and fitness gear such as a watch that measures your heart rate as you work out. We could also sponsor well known coaches and athletes that train for sporting events in which they compete.

INDICATIORS FOR NEED: GERMANY
When deciding on a market to enter in there were many factors that had to be considered. In my opinion, Market size was the first and most important dimension to consider. This played a big role in why China was chosen for our other target country. Because China was chosen largely on market size and market growth we looked for different reasons that would make Germany a successful choice for our venture. Market intensity was a factor that was considered when making this decision. In general, Germany is one of the top ten countries in the world when it comes to market intensity. This alone was an attractive number, but what really made us like Germany in this aspect was the intense devotion to their athletics. They are the current World Cup champions which is the biggest worldwide sporting event short of the Olympics. Soccer, Basketball, and Ice Hockey are the most popular spectator sports in Germany and they all compete internationally in these sports. Initially, Germany didn’t look like the best choice because there were four other European countries that exceeded Germany in marketing intensity, according to the Market Potential Index (MPI). Germany quickly became a better option in market intensity once we learned the country’s devotion to their athletics. Germany was also an exciting country when it came to market consumption capacity. In a survey done this year, 56% of Germany’s middle class stated that they were satisfied with the general business environment. This had risen 3% from just six months prior. 32% of the remaining middle class stated that their position was more favorable than in the past even though they didn’t state their position as “favorable”. The middle class will decide the success of our product so a rise in financially satisfied middle class patrons is a positive for our product. Germany also placed #3 in Market Consumption Capacity on the MPI behind China and Japan. (Middle Class, n.d.) Market receptivity was one of our last dimensions that we studied. Germany shows a rather low score of 18 in this year’s MPI, but after further research we found out why this was considerably low and we didn’t find this to be as disturbing as initially thought. Market receptivity is measured by the annual growth rate of imports from the U.S. over the past five years and is responsible for 60% of the weighted total score. The second measurement is the per capita imports from the U.S. which holds the other 40%. (Measuring, n.d.)
The U.S. is the second most important trading partner for Germany. 18.4% of imported goods to Germany are from the U.S. The only country that surpasses that 18,4% is the United Kingdom which is accountable for 20.6%. (Germany, n.d.)
Since 60% of the calculation of receptivity is based on growth we didn’t feel like MPI gave an accurate description of the relationship between the U.S. and Germany. Although there has not been a considerable growth in the recent years, there has not been a decline either. The U.S. and Germany have maintained their strong relationship which proves to be beneficial for our venture.
Earlier we stated that market size would not be our first dimension considered when making a decision because that was our first indicator when choosing China. Although it wasn’t the most important to us, it was still important to know before making a final decision. According to the MPI, Germany scored a 12 in market size. Initially we assumed that this was a bad score. We learned though that their score actually ranked 6th in the world, along with being the largest market in Europe which helped influence our decision. With this information combined with the other dimensions studied before making our decision, we decided that the combination of Germany and China was the best decision to enter our new product. (MPI, n.d.) CHINA INDUSTRY INFORMATION With Chinese industry continuing to expand and very quickly over the past years one of the sectors included is the healthcare industry, in both healthcare related products as well as healthcare services. Between the years 2009 and 2013 an immense growth within the range of 2 billion dollars occurred within the healthcare providers industry as seen in Table 1 below from MarketLine. Even though a rise has been seen it wasn’t a smooth process over the years as very low sums of Chinas GDP would be used towards healthcare services, such as 5.8% of its GDP for the year 2002. Factors relating to this number is of course disproportionate spending, but others including the expense for seeing healthcare professionals and utilizing state-of –the-art technology for the medical services required. These changes are not limited to just the industry however and the people of China had begun to further educate themselves not only on the industry, but on their own health and take action. Controlling costs was another factor the government began to implement, with initiatives securing time limits for prescriptions for patients to cut back on possibly over-prescribing them. Putting strength into the healthcare system as a whole was another focus through creating a stronger channel for information between all of the parties in healthcare, from financing to supplying and so forth. A MarketLine Industry Profile from June 2014 indicates that the Chinese healthcare system has indeed seen big growth over the past few years with a compound annual growth rate of 16% within a four year period prior to 2013. The portion surrounding medical products was very promising in regards to the Training Mask, for 209.5 billion was seen making up 40.8% of that areas overall value and making it the largest area in the Chinese healthcare industry.

Table 1: China healthcare providers sector value: $ billion, 2009–13 Year | $ billion | CNY billion | € billion | % Growth | 2009 | 283.2 | 1,754.2 | 213.3 | | 2010 | 322.5 | 1,998.0 | 242.9 | 13.9% | 2011 | 393.0 | 2,434.6 | 296.0 | 21.8% | 2012 | 453.9 | 2,811.9 | 341.8 | 15.5% | 2013 | 512.8 | 3,176.8 | 386.2 | 13.0% | CAGR: 2009–13 | 16.0% |

Source: MARKETLINE

Overall competition seen in this industry focuses on elements such as the size of healthcare firms, products with high quality that can sell at higher prices compared to competitors and strict restrictions regarding regulations that keep new services out. When looking at the five forces effecting industry analysis what’s found in China is a healthcare system and industry that’s very complicated compared to other countries.

BUYING POWER The buying power in China’s health industries is relative towards its multiple layer insurance policies that causes a large quantity in the different types of sizes for buyers of single customers to big health insurance companies. The fastest growing segment in China as of 2011 is private healthcare, even though a small number of people have it growing. These private companies are funded by the payments of the patients served and the insurance agencies for these patients. With medical products of these companies they normally are found to be undifferentiated, and differentiation will be key to entering this market and selling the product through hospitals and medical suppliers. (MarketLine Industry Profile, Healthcare Providers in China, June 2014)

SUPPLIER POWER The power of suppliers in China regarding medical equipment is very competitive due to the presence of larger forced incumbents in which they are very price competitive and can make strong deals based on pricing. The existence of these large companies also causes weakened supplier power in which many similar products are produced, from high priced to low price and buyers will go to the suppliers selling a similar product for cheaper. Government regulations can have a high cost against revenues for companies due to the increases of possible compliance cists based on the area of the market. (MarketLine Industry Profile, Healthcare Providers in China, June 2014)

NEW ENTRANTS As reflected on in the supplier portion new entrants seek heavy competition from multi-billion dollar incumbents. The smaller buyers, individual buyers though contain switching costs at a lower rate than compared to these large ones. Differentiation is mainly found within the various specialists and care they provide for hospitals in China and these hospitals require a lot of resources and capital in order to begin being built, whereas small clinics have easier access outside of the cities. Medical products and other health products must go through rigorous regulations with SFDA or known as the Chinese Food and Drug Administration. The sellers and suppliers for these products have the capability to product cost effective products that are efficient will be the ones to win over customers. The idea of brand loyalty however is not a strong essence and can cause individuals to move from one hospital to another, all based on the quality of care that is provided to them. (MarketLine Industry Profile, Healthcare Providers in China, June 2014)

THREAT OF SUBSTITUES Substitutes that may be more competitive towards health products and medicines is the idea of alternative medicine, which are medical practices that are more focused on holistic and traditional ways pf healing. These types of medicines and products lie outside the boundaries of what medical science has discovered and are used in the sense of more cultural and ancient practices, such as herbal medicines and the popular know acupuncture. (MarketLine Industry Profile, Healthcare Providers in China, June 2014)

DEGREE OF RIVALRY As stated many rivals exist for larger hospitals found in cities and areas of very high populations. The competition seen lie along the common factors one would expect from users of these services like the prices and quality of the hospitals and products. Other factors affecting new buyers can be the location of the services, those who live close to one are more likely to visit as opposed to traveling much farther for what they need. The additions of new medical innovations has also had an effect on the amounts of patients for hospitals, causing few which in turn means costs have to go up for these patients. The higher these costs have gone up the more competitive things have become for healthcare and hospitals. (MarketLine Industry Profile, Healthcare Providers in China, June 2014)

GERMANY INDUSTRY INFORMATION
INDUSTRY STRUCTURE
The German sports equipment market has been on a slow decline since up until recent years where the growth rate has become stagnant. It is to be expected that the market will start to grow slowly for a 5 year market forecast. In Germany, only 7% of people are playing sports regularly. Since 2009, these numbers were around 9%. Two percent out of the entire population is pretty drastic. In recent years the compound annual growth rate (CAGR) has surfaced to be near .8% from 2009-2013. With the industry growing back at a slow rate, the numbers are still beneficial for the market. Germany’s overall population is at a steady 80.6 million people. If these numbers of active sports players were to grow by the forecasted 1% for the next 5 years, that would provide an extra 4.031 million people that were play sports daily (MarketLine, 2014) . This data is shown in Table 1.
Table 1: Germany sports equipment market value: $ million, 2009–13 Year | $ million | € million | % Growth | 2009 | 3,472.4 | 2,615.8 | | 2010 | 3,517.0 | 2,649.4 | 1.3% | 2011 | 3,564.5 | 2,685.2 | 1.4% | 2012 | 3,591.6 | 2,705.6 | 0.8% | 2013 | 3,586.2 | 2,701.6 | (0.1%) | CAGR: 2009–13 | 0.8% |

Source: MARKETLINE
Overall, the growth of the industry seems be coming back slowly. Revenue and sales are on the way to the top by coming in at an annual rate of 1696.7 million dollars per year for sports equipment.
FIVE FORCES ANALYSIS
The sports equipment industry in Germany has become stagnant in the previous year but has been on the slightest incline recently. The German market of sports equipment has branched out diversely with the exception of some of the very large companies such as Nike and Adidas. Most of the main accounts within the industry have shuffled more towards more retail sales which in return, prevents buyer power from becoming disportionately strong within the market structure. With the market acting the way it has in recent years, it has become more difficult to enter as a new company. Overall, the 5 forces are fair even minus the probability of new entrants (Marketline, 2014). This is displayed in Figure 5.
Figure 5: Forces driving competition in the sports equipment market in Germany, 2013

Source: MARKETLINE
BUYER POWER
This category is in the middle of the road. Mostly, all buyers within the market are individual customers. The downside of having all individual customers is the small funds available. It goes hand in hand when weakening buyer power furthermore. In Germany, customer Loyalty seems to be lower than normal and most of the time it is from a manufacturer brand rather than to a retailer. Most retail stores will stock several different brands that buyers can be price sensitive towards and makes it frowned upon to switch costs. This is why it strengthens buyers power and it is moderately ranked within Figure 5.
SUPPLIER POWER
Within Germany, the supplier power is substantially high. The amount of cases where a supplier is in control seems to be happening more times than not. Our product is to be considered a new and innovative product. Materials used to create the mask are outsourced, but that information would not be given out specifically to us upon request via phone call to TrainingMask. We have one big supplier upon creation of the mask that delivers and happens import rubber, plastic, and neoprene materials. The supplier power goes into a strong effect when costs are increased and when product availability goes down the drain. The German market is well known for outsourcing to small factories which strengthens bargain power to manufacturers(Marketline, 2014). Which in turn, goes back to supplier size as one of the key factors in determining supplier power as noted in Figure 7.
Figure 7: Drivers of supplier power in the sports equipment market in Germany, 2013

Source: MARKETLINE
In recent years, it is very common for the supplier power to rise if a company slows down on production. TrainingMask could have all the cards in our favor if we keep producing product and maintaining high demand (MarketLine, 2014).
NEW ENTRANTS & THREATS OF SUBSITUTES
In the efforts of entering a new market, we have discovered what it takes to become successful and the struggles that go along with it. With the market being on such a high scale, there are opportunities to enter on a small scale with chances of working up the brand recognition ladder. The projected forecast for the sports equipment market is expected to grow. This is an excellent sign as we get our foot in the door. Along with becoming a new entrant, there are regulations, protection laws, and limited regulations for retailers to allow new entrants. We need to food more or less on distribution and transportation of goods. As of now, we plan on distributing product to Sports Scheck, Intersport, and Schuster. There is on key factor from Figure 8, it claims that the market growth is very small. This means that any company entering a new market must have a solid foundation and their feet planted on the ground. This makes it very difficult to enter unless you are already an established successful company (MarketLine, 2014).
Figure 8: Factors influencing the likelihood of new entrants in the sports equipment market in Germany, 2013

Source: MARKETLINE
As we are considered a new and innovative product with zero competition, we have to worry about the threat of substitutes as well. Companies are always trying to one up one another to acquire the most revenue or come up with the best product.
Figure 9: Factors influencing the threat of substitutes in the sports equipment market in Germany, 2013

Source: MARKETLINE
The threat of substitutes is assessed as strong. Products that are considered substitutes for sports equipment within Germany are things that will better leisure time. Products as such could be sold as books, music, and electronics. This is fairly easy to determine because most people would rather skip their workouts and relax than rather go to the gym, bust their rump, and breathe at an equivalent to 13,000 feet. It’s programmed into the human mind to take the easy route. Also, with becoming the only elevation simulation training mask, there will be threats of counterfeit masks being produced with less quality and designed to work for short periods of time (MarketLine, 2014). There is no directs substitute for the TrainingMask.
DEGREE OF RIVALRY
As of right now, TrainingMask has no rivalries for elevation simulation training products consumed by the general public. Hypoxico is the possible substitute for a permanent product. Elevation training mask is the only portable on the go workout device in the market. Hypoxico strictly deals with commercial sales and is not cost effective.

COMPETITION
CHINA
Our product to sell in China is a unique product, one that is particular for its kind other than one known competitor called Hypoxico, whom has a similar product known as an altitude training mask. Within China though the competition is much broader, a competition that goes across products that may be similar, or completely different but which serve the same purpose, which is to better your lung strength and health. Products can vary from a simply face mask you would commonly see in hospitals, which are worn by heavy portions of populations in cities, as well as specialty masks that are just for serving cleaner air to the wearer. There are also prescription drugs one could take that may serve the purpose of helping with any lung related ailments and even exercises or the sales of traditional Chinese medicine/alternative medicine. When looking at this scope though the biggest competitor for the sales of the elevation training mask will be strongest amongst these companies who are part of the healthcare industry and it will take strong convincing to have a product such as this take place within hospitals and doctors’ offices for recommendations and sales to patients. Such a company would be Chindex International, Inc and they are involved with the sales for healthcare services and also products such as medical equipment that serves not only in China, but for the United States as well. This company is broken up between these different segments and the field of medical equipment is one to focus on for the mask. Unless somehow we can strike a partnership with a company such as Chindex and include the elevation training mask brand and product with them it will be a big competitor for the company to stand up to. The company has a strong reach across hospitals in the major cities of China including Beijing and Shanghai with services and sales bringing in strong revenue. At the end of 2013 Chindex International, Inc had revenues at around 179 million which is a figure that was up 17.7% compared to the previous year, showing a growing reach for the company. Their profit margin has seen decreasing numbers while the net income has remained steady between the years 2009 and 2013. If we were to try and strike a partnership and try to sell the brand under a company such as this it would be beneficial due to the amount of coverage they have, although that is if such a thing would be successful and accepted by them. Below is table 6 that reflects the company’s progress across the time period this data was discussing in a report from MarketLine. (MarketLine Industry Profile, Healthcare Providers in China, June 2014)
Table 6: Chindex International, Inc.: key financials ($) $ million | 2009 | 2010 | 2011 | 2012 | 2013 | Revenues | 171.4 | 171.2 | 114.4 | 152.4 | 179.4 | Net income (loss) | 5.0 | 8.2 | 3.2 | 4.1 | (6.1) | Total assets | 162.6 | 170.8 | 199.4 | 222.4 | 244.6 | Total liabilities | 66.2 | 61.9 | 56.9 | 72.4 | 78.5 |

Source: COMPANY FILINGS
4 p’s for Chindex International, Inc
Product: As mentioned above their products range in variety regarding medical equipment and procedural equipment. They have patented technology for surgical products and blood transfusion equipment and other equipment for imaging purposes. What they offer also varies across locations ad some hospitals in specific cities may contain more products and specialty services to offer and others may not have the same ones as another. For example Shanghai United Family Hospital offers family medicine, internal medicine and physical medicine/rehabilitation, but Guangzhou united Family Clinic is not listed as having the physical/rehabilitation offerings.
Place: This Company has operations in China and provides services with hospitals while providing products here in the United States. They have focuses for hospital operations in major cities/regions and seem to be more active in these areas including Beijing, Shanghai, Guangzhou, Wuxi and Tiajin.
Price: Due to the amount of products they sell and represent the prices for these items are expected to be costly depending on what it is and who is buying them.
Promotion: The products can be seen promoted heavily on the website, which is in Chinese but can be translated and they feature the products in detailed images with descriptions pertaining to their uses. Another big competitor inside China is a company called IHH Healthcare, Berhand and this is another company related to healthcare services and they span across numerous countries. They have the power to influence medical choices and this includes how our product could be either well received by a company such as this who operates in many medical centers, or could be rejected in favor of other methods/products for the betterment of lung health. Their head office is in Malaysia, yet they are big in China with 10 medical centers in operation currently and plans are in development to open up a hospital in Shanghai as of this year. Revenue was seen to be over 2 million dollars during 2013 which was actually a decrease for them and their net profits had decreased as well.
4 p’s for IHH Healthcare, Berhand
Product: This Company is focused more on services provided such as secondary healthcare, primary healthcare and tertiary care, which means they have the ability to recommend health products to patients, or give them the direction to somebody who can give them these recommendations.
Price: The prices will vary based on medical services provided and how other factors such as an individual’s insurance will play and other healthcare factors.
Place: Their operations are heavy in Asia with services in countries like China, Vietnam, Iraq, India and the United Arab Emirates. They have operations in hospitals and also medical centers and clinics.
Promotions: Part of the way they have been able to spread awareness about themselves was to take part in initiatives with other countries, such as collaborating with Vietnam through a consultancy agreement and also a hospital management agreement to open a hospital within Ho Chi Minh City.
(MarketLine Industry Profile, Healthcare Providers in China, June 2014)
As mentioned these competitors have a strong presence in the major medical fields, hospitals and clinics in China and a course of action to be taken will be to have our product placed into these areas. Doctor recommendations will be helpful for those who need a product that will help with lung betterment and health and my recommending this to those whom are concerned with pollution or have an ailment that can be helped with the product then doctors’ offices would be ideal. The competition however is present and perhaps a partnership could occur with a company to help sell the training mask trough, otherwise there could be difficulties for a company such as ours to break into these offices.

GERMANY
The only real competitor for the Elevation Training Mask is Hypoxico, which is a company that designs and sells various high altitude simulation devices. The devices that they sell include altitude generators, sleep training products, exercise training products, room conversion products, altitude chambers, and varies accessories that go along with these products. In order for the sleep training products, room conversion products, and altitude chambers to be affective, an altitude generator is needed. They do have a distribution center in Germany that would pose for competition for our product however, not all of their products are sold in Germany. Germany does not have any version of their elevation training mask systems for sale. Hypoxico was started in 1996 and is known for their innovation in the highest quality of hypoxic equipment used by elite athletes, trainers, universities, and military. The name Hypoxico was taken from the word hypoxia, which refers to situations when the air holds less than the normal amount of oxygen which is 20.9%.
Hypoxico does not do any advertising for their products outside of their facebook page, twitter handle, and youtube channel. I think this proves that they are definitely a niche company that relies heavily on a narrow target market. The extreme prices for their equipment show no threat to enter into other markets. U.S. products vary greatly from $190 for a universal mask circuit, to $7,000 for an altitude trainer. The prices for the products offered in Germany are considerably higher that we assume are from the various costs that come with offering products internationally. One product that is offered in Germany is the Hypoxico portable queen size tent. In the U.S. this product is offered at $340. When this product reaches the final selling channel when it is available for the consumer the price is 745 Euro. Today that converts to just over $923. This is one of the cheaper products offered in Germany and it will still exceed to price of our product by over $800. “http://shop.hoehenbalance.de/de/bereiche/3/#details” They have positioned themselves as an elite name and can satisfy any needs when wanting to achieve high altitude training. Their competitive advantage on our product is that they have a wider range of products that essentially achieve the same goal of increased physical performance as a result of high altitude training. Although they don’t share any information on who they are selling to, we have to assume that only the extreme elitists would pay the money for products from Hypoxico. They could have their hand in on different professional sports, but because there is no advertising done that includes relationships with other entities these are just assumptions. In Germany, Hypoxico shows that they are very limited as far as who they are able to target for their product. The Hypoxico tents can fill a different need for athletes that are looking for that competitive edge, but when it comes to training for their specific sport or interest they do not have a product that can imitate the convenience of the Elevation Training Mask.

TARGET AUDIENCE
CHINA
When we take our health fitness training mask to China we will essentially be targeting two types of individuals because our mask was designed and made for athletes who want to train harder in order to give their best performance however, because of the health benefits that these athletes gain from we have also targeted healthy conscious individuals because of how poor the air quality is in China. “Only 1 percent of China’s population breath air considered safe by European Union standards according to a World Bank study.” A cause of the high amounts of pollution in cities of China is from the dirty smoke that these factories give off however; it cannot be blamed on just these factories for the high amounts of pollution in the air.
The sports enthusiasts who would likely use our product are in the age frame of mid-twenties to early thirties. They live in the urban cities that are close to gyms where they have memberships at in which they train and participate in other sporting events close to their home in proximity. These individuals tend to be thrill seekers because they are involved in sports ranging from extreme sports such as flipping heavy tires to playing basketball or running track at the gym. These individuals are in the middle to upper class and can easily afford our product which priced at $79.99 in the United States and $_______ in China. They live an active lifestyle and need the time to be successful which is important in their life. They promote a healthy type of lifestyle. They are competitive individuals who try to excel at everything they do and are goal oriented. These individuals tend to have a healthy mind, spirit and body which may be because they are heavily into exercising and being fit. They likely practice Taoism, Buddhism, or the work of Confucius and likely speak the main dialect in China known as Mandarin Chinese.
The individuals who we will be targeting who are healthy conscious individuals are in the mid-twenties to early fifties. They live in urban cities that are heavily polluted with smog that is partially due to factories that pour out smoke in order to produce the goods of the city that most people work at which are manufacturer jobs. They come from the middle class so much is affordable. They live a busy active lifestyle where they go to work every day to support their family. They do not have a car, only 12% of the total population in China has a vehicle so they either use public transportation, walk, or bike into work on a daily basis so they would greatly benefit from using our mask because of the health benefits associated with using our product and being exposed to pollutants in the city as they make their daily commute to work. They live in a collective society meaning that they live in a uniform society that is a “one for all” society with high amounts of government intervention. A large emphasis is placed on being healthy and taking care of their families. Like sport enthusiast these individuals likely practice Taoism, Buddhism, or the work of Confucius and likely speak the main dialect in China known as Mandarin Chinese.

GERMANY
The persona that we’ve created is a 26 year old woman named Amelia Amery. Amelia lives in a town right outside of Berlin called Kreuzberg, which is still close enough to be a short train ride into the city. Her home is a big studio style apartment, which she lives alone in. As a profession, Amelia is an elite sales representative for Volkswagen as one of the most competitive within her store. She is currently in the dating scene, but is more focused on work and perusing a healthy lifestyle. Miss Amery is considered to be middle class, active, and believes in the idea of maintaining a healthy lifestyle. Amelia is looking to settle down and creating a family of her own. She purchases our products to benefit her overall athletic health.
The German culture has a high priority for hard work and industriousness. There is no lack of effort when it comes to bettering ones self for a competitive advantage against others. Sporting equipment that can better athletes or health of everyday people is an advantage. With that being said, the hard work and industriousness of the German culture goes hand in hand in trying to create that elite profile. Our target market would use our products during every workout for a specific amount of time to produce the best-desired results. A lot of the German culture is considered perfectionists as well. Knowing that our product could benefit our target market to help reach the overall goal of becoming a fine tuned athletic machine is a key advantage standing alone. Owning this product will separate the ‘average’ athletes to the elite athletes (Zimmerman, 2014).
This product will be sold in various sporting good stores in major cities throughout Germany. Mostly focusing on the highly populated cities such as Berlin, Hamburg, and Munchen to create the greatest exposure. Product will be sold in stores such as Sports Scheck, Schuster, and Intersport. These are some of the major sports equipment distributors throughout Germany. Female – Amelia Age : 25 Religion: Catholic
Profession: Volkswagen Sales Representative Income: $65,000 annual = 53,000 Euros Residence: Berlin, Germany Hobbies: Hiking, Cycling, and Socializing

CHAPTER ONE: GLOBALIZATION IMPARATIVE
When we begin our search to take the TrainingMask international, we look for reasons to take a product beyond our country. One of the greatest aspects about this product it that it is unique, patented, and created in the U.S. It is also helpful that this product is used by those with a competitive nature. Our product is one that can “sell itself” because it is the latest technology to help people become more competitive. More than just that, it has been proven to work. Endless testimonials have stated that this product has truly helped them strengthen their lungs and become a greater competitor. This alone is something that all athletes want, especially those who compete on the world scale. With this product we should not be asking if we should sell internationally, but when.
When we take our product international there will be a number of things that we must consider in order to successfully launch our product into two new countries. What will be the best way to gain entry into both the Chinese and German marketplace? The TrainingMask so far has only had to deal with the uncontrollable environment domestically like U.S. legal forces and the competitive structure, but now we have to begin to look at the uncontrollables of the foreign environment. (Cateora, 2013) It will be important that we know the laws and regulations that pertain to the manufacturing and selling of our product. As another example, the cultural differences in both countries to appeal to the consumer and create relationships with suppliers. It will be crucial that we know the best geographical region to place out product in order to suit the needs of the consumer.
CHINA
Exporting and commercial contracts with China can be quite tricky. To enter into a commercial contract with China, the TrainingMask company must first be considered a “legal person” to become this, the company must be registered with the Chinese government. (Cateora, 2013) This process will need to forgo any plans to sell to the people of China. Once the company becomes a legal person, commercially selling in China would become more seamless. Working in China can also pose a large amount of stress on those looking to break into the marketing place.
This is not to say that exporting and distributing within china cannot be done. The Chinese culture weighs heavily on face-to-face visits. It is highly advised to anyone looking to start business with the Chinese to create relationships. (export.gov/china, 2014) For the chinese culture, this can be tricky. Many of the “old style” Chinese business people believe in creating personal relationships before the business relationship. This may include taking a potential distributor to lunch, or to an event. However, unlike when Americans do this, there will be no business to be spoken of during these times. This is when the relationship is created, only after that can the business be discussed. However, in some cases, the “new style” chinese business people prefer to be direct, and get straight to the point. (Cardon, 2009) This is becoming much more popular in Chinese culture, and should be considered when beginning business with Chinese.
Regardless of the market being difficult to enter into, the trends for sports equipment is very promising. In just the past five years, the market growth has increased an average of 9%. in 2013, it increase by 14.3%. (Marketline, 2014) This is vastly greater than the world trends on sports equipment, which are actually on a slight decline. This increase, as show below, creates a market that is at the point of entering. This market trend also makes it possible for other companies to take advantage of the opportunity as well. The companies that are currently leading in the sports equipment market are Nike and Adidas. However, neither of these companies have a product that is similar to TrainingMask. This, and the fact that TrainingMask is so unique, and is under a patent, the likelihood of us having a large amount of competition is fairly low.
Figure 1: China sports equipment market value: $ million, 2009–13

Source: MARKETLINE The opportunity to expand to China is there, while working past all of the setbacks as far as foreign trade in China will have to be further studied and understood, the possibility to move forward within this country is strong. Their market trends being so strong in the sporting goods area brings great confidence that a competitive athletic tool like the Training Mask would do well in a country like this.
GERMANY
In regards to German trade, the relationship has already been shown to be strong. Germany signed a GATT (General Agreement of Tariffs and Trade) in 1951, they are the fourth largest economy in the world, the largest European trading partner, and he sixth largest market for U.S. exports. (export.gov/germany, 2014) This shows that the U.S. has a rich trading history with Germany. When we try to introduce a new product, it will help that we already have a strong trading relationship. I learned that the trade tariffs for Germany are in a category called the European Union (EU), which is a collection of tariffs that all members of the EU must follow. The big restriction when dealing with the EU is their common agricultural policy, which makes trade of agricultural goods and services very difficult. Germany also has their own restriction on biotech agricultural goods. Since this is virtually the only major restriction for the U.S., developing trade agreements with Germany for our Elevation Training Mask should be a very attainable task. I learned that tariff fees are relatively high for export goods Germany. This may cause some changes in the retail price in Germany compared to the retail price in the U.S. and in China. A higher retail price in Germany may not necessarily be a bad thing however. Germany can be considered a “high quality” country that may see the price as a sign of superiority to other products.
The market outlook in Germany for sports equipment sales has been fairly stagnant over the past five years. The market shrank last year by 0.1%, but over the last five years has a compound growth rate of 0.8% (Marketline, 2014) This makes the market slightly worry some to enter into in the chance the market decides to mot make any type of move. However, because it has stayed even, it is not a market that other sports equipment manufacturers may look into selling.
Figure 1: Germany sports equipment market value: $ million, 2009–13

Source: MARKETLINE
The Germany market may not be showing many signs of movement, but the market is one that American businessmen are much more familiar with. This familiarity creates the possibility for relationships more easily and the chance for Training Mask to set up manufacturing sites more successfully. The markets for both of our countries seem possible, but in slightly different way.

CHAPTER TWO: ECONOMIC ENVIRONMENT
CHINA
The estimated Gross Domestic Product (GDP) of China as of September 2014 was $9240.27 billion ranking them with the fourth largest GDP in the world. Their GDP continues to grow at a fairly slow, but steady rate. The GINI rate for China is 47.3% as of 2013 ranking them with the 27th highest in the world. This ranking is 14 countries higher than the U.S. We would have to concentrate most of our efforts to sell to the elite since they will have more disposable income available to them.

They also have the largest labor force in the world. 30.3% of this labor force working in industry. The industrial growth rate also continues to grow, increasing 7.6% in 2013. The large labor force becomes beneficial to our company assuming a transfer in our product to be developed and created in China. If we continue to import our product, the service industry represents the largest labor force at 36.1%.
If our company chose to import to China, this would also be beneficial. China imports an estimated $1.95 trillion in good, one of their top being medical supplies. The U.S. ranks fourth in overall trading partners holding 7.8% of the total dollar value. The exchange rate as of September 2014 is 1 yaun is equal to $0.1629. This is concerning because we will have to sell our product cheaper in order to reach the appeal of the Chinese consumer.
The balance of trade in China has consistently been a surplus since 1995, as shown above. They also hit a record high in August, 2014. While the rest of the world is facing a steady decline, China continues to grow. While this can be a concern for us as we look to import our product, the possible opportunity to create an industry there continues to be the strategy we will need to look at to consider.
Germany
The GDP in Germany is 3634.82 billion US dollars and growing at a rate of 0.8%. Germany is also ranked with the 6th highest GDP in the world. The GINI rate in Germany is 27.0 placing them 130th in the world. This is a much better state to be in than China. The distribution of wealth in this country is much more promising as we attempt to sell a product that is set at a fairly high price to the average consumer. Germany also has a fairly steady household income saving rate of 10.6%. (Finance, n.d.) This has stayed consistent in the recent years, so we would not have to place as much concern on this suddenly dropping. This information was not available for China. Of the 27 countries that were listed within this study, Germany ranked 5th. This means that Germany has a large amount of income that is coming into the home as spending money. This is promising for us due to the higher cost of our product and the high price elasticity.

Germany currently has a labor force of 44.2 million people ranking it 15th in the world. Of this, 73.8%of the labor force works in service. This would make us more inclined to simply export our good to this country rather than build our own factories. If we do look to set up a production site in Germany, the industrial labor force makes up 26.6%. We would benefit from importing to Germany for many other reasons. Germany imported an estimated $1.233 trillion worth of goods and services in 2013. The U.S. was the 8th largest trade partner with Germany. While consumer goods are not one of the major products that are imported to Germany, they are a market that we could still successfully infiltrate. Germany uses the Euro as its currency which is currently worth 1.277 U.S. dollars. This is beneficial to us because we would be making more money at a possibly cheaper price.

The balance of trade in Germany is also a surplus. Much like China, Germany reached its record high in July of 2014, as shown in the graph above. Germany has also been in a surplus for a long period of time. In our favor, Germany primarily exports and imports a majority of products are not relevant to what we are looking to sell. This is a benefit to us because there is a great chance that there is not an industry in Germany relevant to the market we are looking at entering.
CHAPTER THREE: POLITICAL ENVIRONMENT
CHINA
China has been known for their Communist government led by their President Xi Jinping. Xi Jinping took over the “presidency” in 1970 where he has reigned ever since. Xi Jinping has taken a rather different approach to his leadership since the takeover. He has taken a “collective leadership” approach rather than that of a tyrant like his predecessors. (Power, 2014) He has taken it upon himself to have more of an opinion on decisions regarding all aspects of the government from economical to foreign military relations. He has also looked to take better care of his own personal image. Much more care than any of his predecessors, and has a team that continues to strive to do so. Xi Jinping has also learned from western politics. He has made an effort to keep his wife in the forefront, since she already become famous on her own. He also has allowed for light, very light, jokes to be made at his expense. This has humanized him as a political figure and made him better liked. While he has taken drastic measures to help his own public image, this has not completely changed the way of ruling for the Chinese elite. He has kept a strict secrecy of their foreign policies, and has continued to tighten the restrictions on public social media. He has also launched campaigns against those who show political dissonance. Even as the government seems to be moving into a more westernized political scheme, they still hold their no tolerance for those who try to fight the political power. (Power, 2014) The restrictions are still tight, and when it comes down to it, Xi Jinping’s opinion will be law. This has left the Chinese people with a somewhat more fond opinion of their political leader. However, most do not feel that they are directly affected by any decisions made by the elite and their political power. (Garnaut, 2014) Xi Jinping claims to be making moves to help dismantle the corruption of the Chinese economy, but where the country stands today there has been little to no improvement in the matter. The views of the U.S. brand here are particularly lower than those in Germany. However, they are on the rise. In the Pew Global Research article, there is a general consensus that the world view of the American brand is increasing. This is good for all developing products that are looking to expand, especially one like ours that is completely new to the market. Our product of TrainingMask would do well in an economic community that looks positively on the U.S. brand. This is currently the case in China. The Pew Research states that China is at 50% favorability. While this is not as high as Germany, which will be explained later, it is still a good sign. It has also been on the increase in the past few years. If the U.S. is able to keep this at a steady increase, it will be very beneficial to the sales of our product.
GERMANY
The German government consists of one central federal government and 16 federal states. Most of the governing is still done by the central government leaving only schooling, internal security, and establishing and maintaining local self governments. (Picture, n.d.) The “leader” is President Christian Wulff, however he has little say in what actually happens within the government. Mass decisions are made by the Chancellor, Angela Merkel, who is elected by the parliament. The Chancellor acts much like the U.S. president, making a cabinet and acting as a captain of a ship and running the government. (Navigation, n.d.) After winning the world cup, the Germans have found an entirely new sense of patriotism and pride for their nation. Even as late as the 1990s flag poles remained bare and students were not taught the national anthem. Having patriotism was not something Germans held near to their heart, still feeling the shame of such an awful war. Today, with the recent hosting of the World Cup in 2006, and the most recent win, Germans have begun to spark patriotism and stand behind their nation.
The U.S. and Germany have had an overall symbiotic relationship in the twenty first century. They have both been consistently top ranked leaders economically and have been able to move forward as partners. As far as trade is concerned, they have remained consistent in their work and have continued to progress. Because of this, the overall Germany opinion towards the American brand has been strong. According to a research study done by the Pew Global research firm, Germany has a 75% favorability of the U.S. brand. This has actually been on the increase since the low point of the 40% range during the U.S. recession in 2007. This is positive for the U.S. and for our product. Because Training Mask is a new product, it is something that will have been developed with the image of the U.S. rising. The likelihood of acceptance of the product because of this is very great.

CHAPTER FOUR: LEGAL ENVIRONMENT Due to the newness of the Elevation TrainingMask, we must be sure to get patents on our products, and be sure they are adaptable to the patent laws in both Germany and in China. To do this, we must first understand the laws in both countries regarding patents, and understand what the likelihood is of our product designs and concepts still being stolen. This will all be covered in this section
CHINA
China is a member of the Patent Corporation Treaty as of January 1994. (World, n.d.) Through this treaty, any patents that are created in the U.S. will be upheld in China. China has three offices to deal with Copyrights, Intellectual Property, and Trademarks all of which are located in Beijing. We would be most concerned with the Intellectual Property office, as this is one of the most prominent forms of corruption in China.
China has been in the news on multiple occasions for the cases of corruption and trademark discrepancies over the years. China ranks 46 of 97 countries in the security of intellectual property in their country. (IPRI, n.d.) This number is based on an analysis of the country both politically and economically. Over the past five years, there has been very little fluctuation in the rank of China.
Global Intellectual Property Percentile Comparison: US vs China China scored significantly lower than the United States. However, in recent years, the distance between the two countries has decreased. It does appear with the recent moves being made by China that they would decrease in their amount of corruption become a significantly more secure place to sell.
The Global Integrity Report gives another look into the corruption of China. In this report, China is given a weak overall score of 64. While their laws and standards received a moderate score of 78, the execution scores as very low, only 47. (Appendix 1) This leads us to believe that while it appears that there is a lot of potential here and that the laws are strong, those enforcing them are doing a lackluster job. We would be very concerned with this. If we decided to enter China, we will not be able to rely solely on the laws, because there is a chance that when it comes down to it, they will not be enforced. This is of great concern that can only be avoided with experience.
China has begun to make moves to fix their corruption. In the past few months, President Xi has made drastic moves to abolish the corruption. The corruption crackdown is said to be the largest in Chinese history snaring both government officials and businessmen. While many believe this is just a clever way for Xi Jinping to consolidate his power, it has begun to make some powerful impacts on the business economy. The purchase of luxury goods has slowed to an increase of only 2% and the Chinese economy is only expected to grow by 7.5%, the slowest it has been in over 20 years. (Oster, 2014) While it is a positive that the crackdown has begun to cure the corruption of this country, it is also a concern that the tightening of the budgets will cause less people to buy unnecessary goods, like a TrainingMask. We will need to work to create a campaign that will make this item a want.
GERMANY
Germany is also a member of the Patent Corporation Treaty as of 1970. (World, n.d.) This is again a positive for us. We will be able to sell our goods without having to go through a process to create a patent for our product within another country. Germany has two offices that focus on copyrights both of which are located in Berlin. They also have three intellectual property offices located in Berlin, Munch and Jena. Again, we will focus on making relations with the intellectual property offices because this is where most, if any, of our issues will be located.
Germany is much more secure as far as intellectual property rights than China. The International Property Rights Index ranks Germany 11 out of the 97 nations that it reported on. It has faced a slight decline over the past five years, but it is not at a rate that would be a concern.
Global Intellectual Property Percentile Comparison: US vs China

Germany is much more closely matched with the United States in their percentile of Intellectual property rights. Germany even appears to have had a slightly higher security than the U.S. This is a positive as we look to enter this country. We would not have to worry any more than we do in the United States about entering a country at risk of losing control of a new entrant market. The g also gives indication of a positive environment to enter for the Elevation TrainingMask. Germany scored a 78 which is moderate in the means of integrity. Much like China, the laws were stronger than how they were physically carried out, but the numbers where higher. The legal framework scored 81, but the actual implementation of them only scored 76. (Appendix 2) This is less of a concern regarding corruptness if we choose to enter this country. While Germany has made less of a move to fix their corruption, they also rank as one of the top nations as far as security in intellectual property and patents. We would not have to add any additional security upon entering this country in comparison to how we currently run our company in the U.S.

CHAPTER FIVE: GLOBAL CULTURE ENVIRONMENT A saying that has been around for years says the world is continuing to grow smaller. With a generation X dependency on technology, there is an ability to have information about anything within a couple of seconds. However, many countries hold true to some of their most basic traditions. While they have adapted their understanding to what is known as a “westernized culture” they still hold tight to the deep traditions. This must be understood to implement a new product into a nation.
CHINA
The Chinese have held very strongly to their roots. With their tight limit on personal technology, they have continued their older traditions more significantly than many other countries. China holds strong to collectivism and family oriented society. They have seamlessly intertwined their very old tradition with a very modern society, which can be seen in their cities and advertisements. We must take into account their grasp on traditionalist roots while also keeping it modern as to not stereotype their country. The official language of China is Mandarin Chinese, but there are many different dialects that can be found, especially in the rural areas of the country. The country declared in 2010 that the official religion was Atheist, but 18% of the nation that practices Buddhism. China has the largest population in the world with over a trillion people that live there with over 50% of them between the ages of 25-54. There is a 95% literacy rate in China. (Factbook, n.d.)
A basic analysis on the four P’s based on an analysis of the countries culture follows:
Price – The 36% consumption of the GDP is based within household purchases. Of the categories this is the area our product would most likely fall. Due to the strong collectivism of this society, there would be very few individuals that would go outside of their circle to purchase an item like this. The price elasticity is very high for our product in this country.
Promotion – Our promotion would need to be based on how this product would better the group. Using our current marketing strategy, helping the individual, would not be successful in a country like China. We would need change this focus to better fit the culture of China
Product – Our product would not need to change much to be sold in China. We had briefly discussed the possibility of adding an air filter feature to help reach those concerned with the very poor air quality in China. We could also provide bands that use designs that may test positively among the Chinese consumer to possibly increase the desire to purchase.
Place – We would not be able to put our ads on a commercial, and we would be limited through internet due to the strict government laws and lack of television stations. These two avenues would be very expensive. We would need to place our focus on print ads for billboards and public transit since these are seen by so many people each day. Selling our product online would also be a difficult avenue due to the internet restrictions.
GERMANY
Germany is much more westernized than China. They have been working with the U.S. in business for a number of years, creating a much more harmonized and seamless transition for marketing efforts. The most major different in a country like Germany, would be the serious, and sophistication of their nation. With all of the negative history in the country, they are very keen on looking forward and focusing on the future. This is an area that we would be able to grasp to help us sell a product like Elevation TrainingMask. The German culture is much less dynamic than that of China. The official language is German, with no mention of other languages spoken. There is no official religion of German, but almost three quarters of the nation practice either Roman Catholicism or Protestant. They have the 18th largest population in the world with over 80 million people, majority being between 25-56 years of age. There is also a 99% literacy rate in Germany. (Factbook, n.d.)
A basic analysis on the four P’s based on an analysis of the countries culture follows:
Price- Again, with a new to the world product, price is very elastic. While we may be able to offer a slightly higher price here due to the high average income, we will still have to be careful not to price as high.
Promotion- Germany is more individualistic than the Chinese, but not as high as the United States. We most likely would be able to run a campaign that is much more similar to the Elevation TrainingMask’s current strategy within Germany.
Product- We would not need to make many changed to the product based on the German culture. The only change we could possibly make would be the possibility for different covers that may test positively among the users within this country.
Place- We would be able sell this product similarly to how we currently do in the United States. There are no as many internet restrictions here, and the context is very similar to that of the United States.

CHAPTER SIX: GLOBAL MARKETING RESEARCH For the marketing research for our product there are a few particular research topics we would need to understand in order to better sell our product to consumers. We have come up with three broad topics we would like to analyze within each country. These topics are: * How do people categorize our product? * How much would be spent on our product? * How to best market this product?
We then asked questions that would allow us to further analyze the product and attempt to figure out what our best marketing approach would be. Our primary research will be done through this survey in China and Germany. We would also speak to current users to find out how they best see our product, and how they think it could be improved. Having as much knowledge of our products issues before we enter other countries could make a huge difference in its success. Our secondary research is limited due to the lack of products like ours. We could possibly track Hypoxico to see how well they have done internationally, and also how much use their product has. However, this is a business to business product, so it is difficult to compare.
HOW WOULD THEY CATEGORIZE Questions asked here were to help use better understand how our product is viewed in the eyes of our potential consumer. Unlike an item of clothing, it is not a product that may have generally the same use in every country. While one consumer may seem the product as a training device, another may see it as health improvement. Finding out where our product ranks will help us to better market to a stigma created in the eye of our consumer. Or, if they have absolutely no current opinion on the product, we could create the image we want them to have. We hypothesize for this that the consumers of China would see this as a health adaptable device. This is based on their collectivist tendencies. They would be more likely to see the product as something that would better the group. We would hope that with this image, we can sell the product as a device that could help entire groups of people with either lung problems or entire teams. We would be concerned if they saw our product as only a training device because they would not be as likely to buy a product that only benefits them. We would hypothesize that the consumers of China would have the same opinion of those in the United States, that this is a product for training. They are a much more competitive and individualistic society. This would be a positive if they react this way because we would be able to sell our product similarly to how we sell in the United States.
HOW MUCH WOULD BE SPENT Questions regarding what our product is worth are very vital to our market entrance. We currently do not have any product that is very similar to our own. Because of this, we cannot confidently say how much would be spent on a product like ours in either country. We would ask questions regarding how much is spent on products in like categories, as well as how much they expect to spend on a product that provides results like ours. We would also ask questions regarding the features and additions that are offered with our products, such as specially designed bands and a cleaning kit. We would need to understand if this is something we should bundle with the product if we wish to sell them there, or if they would be something purchased at all. It is difficult to hypothesize how much an individual in either country would spend on a product like ours because we do not have anything to base the starting point on. We would hope that they would be willing to spend around $100 on our product. This would allow us to still make a good profit margin that is similar to what we make in the United States.
HOW TO MARKET This would be questions on how current consumers find out about new products, and inform themselves on products they are looking to buy. This is vital to understanding where we would need to market, because this is a product that nobody currently knows about. We would expect that a majority of Chinese consumers learn about products from billboards and public transit due to the restrictions on personal technology. We would believe that they find out more information through magazines, or through word of mouth from other member of their collective groups. We would expect the German consumer to also be reached through print ads, but we would expect them to find out more of their in depth information through the internet and consumer reviews. For both of these countries we would need to be sure to have a very positive consumer review in the beginning and strong customer service. We need to be sure that we do not obtain bad press right away in either of these groups if we want to successfully penetrate their markets.
An example of our consumer questionnaire is located in the Appendix. (Appendix 3)

CHAPTER SEVEN: PRODUCTS AND SERVICES FOR CONSUMERS
THE PRODUCT Our product, as described above, is fairly simplistic as far as the number of parts it has. Reduction in order to make this product cheaper would be very difficult. We could however, create sleeves that would be desirable by each consumer group, or possible only available within these countries. By creating sleeves that are only available in these particular countries, we would be playing off of the strong patriotism that is in both countries. We could test bands based on our market research to decide what we believe would be the most successful in our countries. TrainingMask already creates sleeves that are unique to sports teams or groups for an additional fee. We could offer this feature when we sell to groups by allowing them to put their logo on our product. This could help us to create partnerships would companies that have goals similar to ours.
OTHER USES We have created two scenarios that we believe our product will find the most use; athletic training and health rehabilitation. Both of these are the main uses of the product in the United States, and we do believe that this will continue in the use for other countries as well. Under the athletic training category there are multiple avenues. The fist would be individual training. Currently the product is marketed to individuals and training to make one’s self better. This would work in a country like Germany, because they also are very individualistic. However, this would not work for a country like China, who wants to better the entire group.
The other avenue that could work under athletic training would be use by an entire team. By selling to coaches or team managers, we would be able to sell the product in groups to teams. This is currently being done in the U.S. as well as another avenue of sales and marketing. This would be a smart way to sell the product in China if we wanted to sell it as a training device because of the ability to sell in groups and market the product to benefit the entire team.
The second scenario for sale would be for health benefit. Whether it be to help people work out and lose weight, or it be to help people who have certain lung deficiencies like asthma, selling the product for medical purpose is an alternative that is very different than how it is currently marketed. This would be particular helpful in China where air quality is of great concern, and the over populated cities results in large hospitals. While their obesity rate is very low, 5%, the medical ling deficiencies could be a huge business to business partnership. (Factbook, n.d.) This could also be helpful in Germany where the obesity rate is higher, 25%, but there is also a great concern about being healthy. (Factbook, n.d.) They also have very innovative hospitals that could potentially invest in a product like this for their patients.

CHAPTER EIGHT: INTERNATIONAL MARKETING CHANNELS Currently, Elevation TrainingMask focuses primarily online for their sales, but did just recently contract to sell within Dick Sporting Goods. They do not have any stores on their own, and do not currently have any type of print ads that are out and seen by the general public.
CHINA
To sell in China, the marketing channels are limited. China is under a very tight governing hand that will restrict the channels that we will be able to use. There are no personal televisions within the homes, and there are many internet restrictions. If Elevation TrainingMask decides to enter China, there will have to be huge adjustments in how the product is currently marketed. There will have to be more of a physical appearance of the product than what is currently being used and product cannot rely on the internet sales as the primary way to make money. We would need to look into moving into brick and mortar stores to successfully sell our product. Because our product is unique and should not be seen as a common sports product, but we are not big enough to create our own stores, we will need to sell within other sporting goods store. By creating contracts with these stores, we will be able to reach our narrow target market for an efficient cost. We may also look into doing business to business selling. We would want to sell directly to sporting teams and sports groups, such as Olympian trainers or world class coaches. These are people who are already looking to b the best, and most of them would do it for a premium price if it put them above the competition. We could also look to sell directly to hospitals or rehabilitation centers. This would allow us to again, sell in bulk, and sell to people who could and would pay premium prices in order to have the best for their patients.
GERMANY
The marketing channels are much more open in Germany. An average of 129 minutes of media is consumed by a German each day, whether on a computer, television or mobile phone. (Thompson, 2014) Because of this, we would be able to continue our online sales market here, and push this while we looked for companies to partner with who already have sporting goods stores. We would be able to create stronger connections with these companies too because it will not be quite as vital to our success like it would be in China. We can also consider the business to business selling in Germany as well. Much like the avenues we suggested for China, we could use the same ones for Germany. We could also look into partnering with different races, or biking events that happen in Germany to help promote and sell our product. These will be people looking to individually excel and improve themselves, and we would be able show them how our product would help. One example of a marathon we would look to partner with would be the Munich Marathon. This marathon is one of the largest marathons in Germany due to the multiple running options, a full marathon, a half marathon, a relay, etc. We would be able to reach a large number of participant’s at all different levels. Currently, they are only sponsored by German companies, but we could have the opportunity to show off our product simply by creating a company team to participate in the event while wearing the mask.
CHAPTER NINE: ADVERTISING ENVIRONMENT
Elevation Training Mask does all their advertisements in house freelance style. When the company determines that they need to run a new advertisement they contract with a company from Malaysia to do the advertisements. The owner of the company tells the company based out of Malaysia what he wants in the ad and they provide the company with several options to choose from. By using a company based in Malaysia they are able to save a lot of time and money because when you work with an Ad Agency they provide you with only a few examples and you have to choose from one of those ads where this company in Malaysia provides an ample amount of solutions in terms of ads that the owner is able to choose from. An ad agency also wants to meet several times before you choose an advertisement and the owner of the company does not have the time for that because time is money and by meeting several times the owner loses money because he has to focus his energy on that when he could be shifting it elsewhere that may need attention. After speaking with the owner of the company about how he conducts business with working with an ad agency where he told me that he doesn’t he contracts out the to a company based in Malaysia. One question that came about was how long does it take from telling the company in Malaysia what he wants in the ad to actually getting the ad. He said first he Skypes with the company in Malaysia telling them what he wants in the ad and within 24 hours he has an advertisement sent to him so the process is extremely fast compared to using an Ad Agency. By using an option such as this company based in Malaysia it has saved the company several thousands of dollars because the price that the company in Malaysia charges is relatively a lot cheaper than spending thousands of dollars to have an ad agency produce a single ad that may not even be correct requiring several other meetings to get the advertisement correct which in the end again loses valuable time that could be spent elsewhere.
CHINA
When we take our health fitness training mask to China we will want to strategically and creatively come up with an ad so it will be important that we illiterate this point to the company that we work with in Malaysia. It will also work to our advantage by partnering up with this company in Malaysia because they share some of the same core values as does the Chinese culture. When we have these ads produced for our company we will want to incorporate certain aspects of the Chinese culture such as kimonos or incorporate the Chinese monastery so in that aspect our ads will be completely different than the ones produced for our company targeting Americans in the United States. After being exposed to several Nike Chinese ads it was promenade that one element that these ads have in common is the use of bright colors such as red, yellow, green, and blue which all have significant meanings in China. Red is associated with fire and dragons and symbolizes good luck and fortune. Red is found everywhere during the Chinese New Year and holiday events. Yellow was the emperors color and is thought to be associated with palaces, alters, and temples. The color green symbolizes health, prosperity, and harmony. The color blue is thought to have a connection with the sea and wisdom. It will be important that the company that we use in Malaysia knows these significant meanings and how to appeal to the Chinese person’s senses.

Figure 1- This ad was produced at the Weiden and Kennedy branch office in Shanghai which represents the Chinese culture. It uses a lot of red and incorporates dragons into the advertisement. It also shows the man holding the two basketballs in a meditation state which is important in the Chinese culture in order to remain focused.

When we promote our product in China we will want to advertise our product in a variety of different media outlets in order to get a high amount of viewership. One way we may want to promote our training mask is through social media on a website known as RenRen which is equivalent to our FaceBook because in 2013 there were 203 million users online indicating that a lot people in China use the internet. We will want to promote our product at expos such as at the 2014 Shanghai Health, Fitness, and Wellness expo where companies come together to promote their health fitness related products. We may also want to promote our training mask through special event marketing where we would cross promote our product with health fitness gear. Because of high amount of traffic in the morning as people make their daily commute to work either by using public transportation, walking, or biking into work we would get a lot of exposure by having outdoor billboards or advertisements on the side of the means of public transportation.
Germany
The advertisements in Germany use a lot adult humor in order to get the point across because Germans have a unique sense of humor and are more likely to view ads that use humor.
Figure 2-Shows the use of adult humor used in Germany in advertisments. This ad was produced by Kolle Rebbe which is BOLD and makes an excellent point. It states that you cannot hide fat anywhere and it is painfully hard to get rid of it manually. This ad is for Kingdom of Sports which is a sports facility/ weightroom that requires its users to have a membership in order to train.

When advertising our product in Germany we will want to use the same concept for outdoor advertisements. Outdoor advertising has 24 hour publicity to the public. Ads can be placed in positions that will get excellent exposure. This type of media is highly efficient because of its high output and low cost. Outdoor advertising is very flexible. An ad can be placed virtually anywhere if desired.
Another way to gain exposure would be the use of sponsored coaches and athletes. Elevation Training Mask could sponsor professional athletes which would allow for national T.V. exposure. Strictly high profile athletes would be sponsored and our product would be endorsed for example by Olympic athletes. Title sponsorships are another form of sponsoring huge events however they do tend to cost more however it allows us to reach out further to our target market in Germany.
A third option for our company to pursue in regards to advertising is the use of consumer magazines. Small ads are cost effective for the amount of exposure one product can receive. These ads have a very long lifetime span. Once printed, the ad will be available to consumers until the magazine becomes recycled. This allows for images of our product to be clear and precise. Target markets can be reached easily by specific demographics, trades, or specific age groups. The internet is always an option because of its convenience and 24/7 around the clock advertising. This gives Elevation Training Mask the option to pinpoint and reach out to our target audience. The upside of using the internet to advertise our product is that internet ads can overcome any barriers to distance and gives our very cost effective way to advertise our product.

CHAPTER TEN: PRICING ENVIRONMENT
The pricing mark up on our product is a great concern because we have such a new to world product. While we have no immediate competition, we do have a concern with being sure our product will be something consumers will want to try. Because we will want them to try something that they currently know nothing about, we will have to keep a low price to gain an interest and show the TrainingMask is an investment that is worth their money. Our product is already priced considerably high at $79.99, so we need to be more sensitive to pricing. All of our estimates were based off of a worst case scenario pricing strategy. Most of the situations we looked at gave us a range. We would be able to ship a range of 9000-9576 masks. We based all of our estimations on being able to ship the lowest estimated shipment at the highest cost.
CHINA
The mark ups in China were fairly similar. The tariffs were slightly higher, but the shipping was slightly cheaper. The mark up in China was estimated to be $130.32. One area that we go receive a break is on the tariff. Both the US and China are most favoured nations within the WTO. This allows for the tax to be significantly lower on imports from the U.S. to China from a 50% tax to a 5%. We also analyzed all of the ports to find out which would be the most cost efficient in China. We found that the Qingdao port was the most cost efficient for us and would be one way to lessen our costs. A more in depth analysis of the distribution costs is available on page __.
The mark up from year 2012 on a product like this is $2.12 due to shifts in exchange rates and inflation. This is a much smaller price escalation, 0.5% from 2012 to 2013. This is not a concern short term if the trend only makes adjustments be such small amounts. However, taking a look at the 10 year historical value of the Chinese Yuan to US dollar does raise some concern.

Unlike the Euro, the Yuan seems to be on a steady decline and has been for the past 10 years. TrainingMask would need to continue to adjust the prices to stay competitive and relevant to the continual decrease in the worth of the Yuan. While we current have a large profit margin on our product, we may not continue to have something like this. The steady decline should be watched carefully. If China cannot turn around its currency, we may be faced with a decision to not leave the TrainingMask for sale for a long period of time.
GERMANY
After adjusting the pricing to include all of the excess shipping charges, a TrainingMask would cost an estimate of $125.70 US dollars. The shipping charges were found through a process of understanding shipping costs, tariffs, and retail percent mark up. We also analyzed all of the ports to find which port, Bremen, Germany, would estimate the cheapest price available to us. However, the large, potential increase of $125.70 compared to the $79.99 US dollars. While the German people are generally wealthier, a $55 increase is a very high expectation. A more in depth analysis of the distribution costs is available on page __.
The analysis on the price escalation in exchange rates for Germany in one year is also a concern. The estimated mark up in U.S. dollars from 2012 to 2013 is about $7.57. If this change in exchange rates continue, TrainingMask could potentially be losing a large amount of money. Germany currently uses the Euro as its currency. In the past year, the Euro has decreased in value by 8.4%. However, based on a ten year analysis of the Euro, it has generally stayed in the same value range.

The graph shows the Euro has generally stayed within a $0.05 range over the past 10 years, with some outliers. This is promising because it means we will probably not have to worry about doing too much price adjusting or profit adjustments over the course of the time TrainingMask is being sold in Germany. While there are some outliers, in general it does hold a fairly steady value. We will be able to set a price here and not have to worry too much about price escalation.
OPTIONS
Of the two options, it appears that the cheaper place ship our product will be to Germany. We would need to look into ways to possibly reduce our price because the product will have a lot of price elasticity to begin with. The text give three options regarding pricing and the ability reduce the extra costs created by distribution to other countries. We have already looked at one of the options, reduce the distribution costs. As stated above, the estimates were made based on worst case scenario shipping. In either company we do have the potential to decrease the distribution costs by shipping our max product of 9576 masks, or by making better contracts with our shipping yards. This would probably be the best option a far as effectiveness and efficiency. The second option mentioned was to reduce the product quality for shipment. We would not want to pursue this option because the product is so new to the market. We want to be sure to offer the best quality to potential new customers because the image rating of our product is vital to our entrance into a new country. The third option mentioned is assembling the product in the country, verses sending whole products through in order to potentially reduce tariff costs. Again, for our product, we are already estimated to pay low tariffs. The largest cost factors seem to be within the cost to ship from the U.S. to the other nations. The best option continues to be to assemble our product and ship into both Germany and China.
FINAL DECISION After a careful analysis of the Elevation TrainingMask, China, and Germany, we have made the decision to enter into the German market with a standardized marketing mix. Both of these countries offer a lot of opportunity. China has a large population with a very dynamic culture. They also offer the opportunity to grow at very large rates if we were able to successfully infiltrate their market. Our product is also currently manufactured here, which offers us the opportunity to produce at a much lower cost, and we have already built relationships within the manufacturing industry. However, there are a lot of red flags that will make this a difficult market to enter. China has high corruption rates, although they are beginning to take steps to fix them, they are still of great concern as we look to enter a new market with a new product. China also has a market culture that is very different than what our product symbolizes. We are looking to make our users more competitive and better individuals. This is completely opposite of the rooted feeling for a user of a product like this. Overall we could not find a niche that would fit our product without altering the design and the marketing for the product. This would be costly and very time consuming for our product.
MARKETING MIX Germany is a culture that is rooted in a lot of the same ideals as an American citizen. The Hofstead analysis offers a very clear look into how similar the two markets are and how the rooted culture is very similar. Germany is also just coming off of some huge success on the world scale. It would be ideal if we could infiltrate this market while this excitement is still high.
STRATEGIC TIMEFRAME We would want to enter this market as soon as we could, but we have to be sure that we do it as strategic as possible. The first step that would involve the least amount of risk would be infiltrating the online market. We have found that mobile marketing and online purchasing is high in Germany. By placing ads on some of their top used social media and search engines, we will begin to spark the interest of the German users.
After one year we will want to begin to look at different outdoor athletic events that are spread out to different seasons. Example events are the Berlin Marathon and the Biathlon World Cup in Oberhof. These two events happen at different times of the year and would draw different types of athletes. We would want to start by first having booths at these events to introduce potential customers to the product while we work to possible sponsor events or athletes within 5 years. We would also look at possibly enter athletes into some of the marathon events to give the product even more opportunities to be seen by perspective customers.
After about two years of being primarily online, we will want to join with a sporting goods store that is in Germany. We would want to find a store that is specific for sporting goods, and strategically be placed by training devices. We would want to be sure that in our contracts with these stores that we are allowed to have in store advertizing and possible chances for demonstrations. This would help people to understand what our product does because it is a new to world product. We would want to look for stores that are closer to sea level as well. Because our product allows the user to train at a higher elevation, it would not make sense to sell in the areas of German that run within the mountains at already max elevations. We would never look to open a store that is specific to TrainingMask because we have such a limited number of products.
Within this two year period, we will also want to find top athletes that have strong appeal to the German population. We would want to find three athletes to begin with, one who is primarily a winter athlete, primarily a summer athlete, and a team athlete. This will help us to reach a dynamic market and a large amount of people. We will want to try and find athletes that are in sports that are popular in Germany, like soccer, so it is something that they can relate to. Once we have made all of these moves, we will have successfully infiltrated the market of Germany within a 5 year period.
ADVERTIZING PLAN We plan to use an adaptation of our plan as we enter the German market. We want our ads to have the same strong energy about how they make the user more competitive, but we do not want to show it at such an extreme level. The German market is not quite as individualistic as the U.S. so we would not what to show the athletics quite as extreme. We would want the users in our ads to be training for sports, possibly the athletes that we are looking to get and are mentioned above. We would start with just generic people that fit our target market. We would have them use the mask during a run, or while they played a sport. The German culture has not taken hold of the extreme workouts quite like the U.S. has.
FINAL ANALYSIS Both countries would be viable to enter, and over time this company could do well on the international scale. This product, in time, could easily be moved to a world scale by looking at markets like the Olympic Games or the World Cup. However, the company first needs to work itself up to a world scale and a corporate company before this happens. We look forward to helping this company move forward into their international endeavors.

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APPENDIX
Appendix 1

Appendix 2

Appendix 3
Appendix 4
China Shipping Analysis EXW EX WORKS $ | CHINA | | Wholesale price (not including GST or delivery) | $ 50 | | | | | FOB FREE ON BOARD | | | EXW Price plus 100 | $ 50 | | + Transport to carrier (eg wharf, airport) 17% | $ 9 | | + Customs clearance (ECN) 8% | $ 4 | | + Additional packing/labour for transport 5% | $ 3 | | + Agent’s commission (eg 10% of FOB price) 13% | $ 7 | | FOB (Named Place) | $ 72 | | | | | CFR COST AND FREIGHT | | | or | | | CPT CARRIAGE PAID TO | | | FOB Price plus 143 | $ 72 | | + Sea/air freight charges to wharf/airport 32% | $ 0.23 | | + Sea/air document fees (eg Airway Bill, B/L) 11% | $ 6 | | + BAF (Bunker Adjustment Factor)*A35* 2% | $ 1 | | + Transport contingency# 2% | $ 1 | | CFR or CPT (Named Place) | $ 80 | | | | | CIF COST, INSURANCE, FREIGHT | | | CFR or CPT price plus | $ 80 | | + Marine Insurance Premium 2 | $ 1 | | CIF (Named Place) | $ 81 | | | | | DDP DELIVERY DUTY PAID*** | | | CIF plus | $ 81 | | + Import duty/tax (calculated as 20% of CIF price) 39 | $ 5 | | + Customs clearance fees 8 | $ 4 | | + Delivery charge from airport to customer 10 | $ 5 | | DDP (Named Place) | $ 95 | | | | | Retail Markup for your product | 37.50% | $ 130.32 | | | | Convert and compare price to local currency and products | 6.12 | 797.57 |

Appendix 5
Germany Shipping Analysis EXW EX WORKS $ | | Wholesale price (not including GST or delivery) | $ 50 | | | FOB FREE ON BOARD | | EXW Price plus 100 | $ 50 | + Transport to carrier (eg wharf, airport) 17% | $ 9 | + Customs clearance (ECN) 8% | $ 4 | + Additional packing/labour for transport 5% | $ 3 | + Agent’s commission (eg 10% of FOB price) 13% | $ 7 | FOB (Named Place) | $ 72 | | | | CFR COST AND FREIGHT | | | or | | | CPT CARRIAGE PAID TO | | | FOB Price plus 143 | $ 72 | | + Sea/air freight charges to wharf/airport 32% | $ 0.25 | | + Sea/air document fees (eg Airway Bill, B/L) 11% | $ 6 | | + BAF (Bunker Adjustment Factor)*A35* 2% | $ 1 | | + Transport contingency# 2% | $ 1 | | CFR or CPT (Named Place) | $ 79 | | | | | CIF COST, INSURANCE, FREIGHT | | | CFR or CPT price plus | $ 79 | | + Marine Insurance Premium 2 | $ 1 | | CIF (Named Place) | $ 80 | | | | | DDP DELIVERY DUTY PAID*** | | | CIF plus | $ 80 | + Import duty/tax (calculated as 20% of CIF price) 39 | $ 2 | + Customs clearance fees 8 | $ 4 | | + Delivery charge from airport to customer 10 | $ 5 | | DDP (Named Place) | $ 91 | | | | | Retail Markup for your product | 37.50% | $ 125.70 | | | | Convert and compare price to local currency and products | 0.80 | 100.56 |