Current situation 2 Current Situation: 2 1. Company purpose 2 2. Industry Sector 2 3. Size and Location 2 4. Location 2 5. Number of employees 2 6. Current exporting activities 3 7. Other relevant information 3 8. Company product / services / markets 3 9. Initial description of chosen product/service for export and country 6
Planning export offering 7 1. Customer Profile and Needs 7 3. Potential size of this Market 11 4. Partners / associates that you will need 11
Initial Country Analysis 14 1. Country risk rating 14 2. Issues/ Product modifications required for market 15
Environmental Analysis of Market 16 Macro Analysis 16 Micro Environment 17 Entry Strategy, Implementation & Operational Changes 19 Entry Strategy 19 Implementation 19 Operational Changes 20 Conclusions and Recommendations 20 Bibliography 20 Appendices 20

Current situation 1. Company purpose
The way I explain the purpose is as company named “ECO STORE”. The meaning by ECO is GREEN, the reason I use the word GREEN because when people see green things which the first idea comes in mind is nature and free from contamination and nothing chemical and 100% sure harmless for human body. And the meaning by STORE is “putting every ECOed things together”.
So the purpose of the company is making human’s life healthier and not let any chemical thing to harm us. 2. Industry Sector
As a company who has been focusing on the career in “Green (As explained above)”. The company has its own way to do it with advanced technology and also improve its own product to be more prefects. 3. Size and Location
The company was born in 1993 by a couple named Malcolm and Melanie in the basement of their home in an eco-village in New Zealand. And now the company is growing to be a large company in Auckland NZ with 262 official stores NZ wild and also available at Countdown, New world, Pankn’save and 4 Square. And also overseas market. (Overseas market will explain later in exporting activities) 4. Location
The company located in 1 Scotland Street Auckland, New Zealand. 5. Number of employees
The business is comprised of an estimated 40 employees who are situated New Zealand. 55% of the workforce is in the production line. The other 45% is in Finance, Marketing, HR and company CEO. * Production = 22 employees in NZ * Finance = 4 employees * Marketing = 5 in NZ,(one of them is Chinese who responsible for the Chinese market ) * HR = 1 in NZ * CEO : Malcolm Rands, whose personal and business stories are told in Ecoman, is the founder and CEO of Eco-store 6. Current exporting activities
The methods of the company doing the overseas market are by online shop and local dealers.
Online shops are direct from NZ but in charged by local supervisor.
Local dealers are supported by NZ as well but they are different when compare to online shops’ supervisors because online shops’ supervisors are employees of the company and local dealers are individual owned. Which means the company just supplies all products to them in trade price?
As the company grows, the supply chain is now all over the world. Mainly include: USA, UK, Singapore and Europe etc. 7. Other relevant information
From the beginning the couple Malcolm and Melanie are focusing on the point of “Health, Pure and free from contamination” and now as a large company they even put those things above the company as company’s culture. As the culture of the company they created a good healthy background. Because of this background of the company, the company's development is steady and fast. 8. Company product / services / markets
The company has a lot of different product and all products are fellow the point (as explained above).
Product include 8 categories in each category has many different products. 1. Laundry
- Laundry Powder, Top & Front Loader
- Laundry Powder, Front Loader
- Laundry Liquid, Top and Front loader
- Laundry Soaker & Stain Remover
- Delicates & Wool Wash
- Fabric Softener 2. Dish
- Dish washes Liquid
- Dishwasher Tablets
- Auto Dish Powder
- Rinse Aid 3. Home
- Multi Purpose Cleaner
- Multi Purpose Cleaner Concentrate
- Bathroom & Shower Cleaner
- Glass & Surface Cleaner
- Cream Cleanser
- Toilet Cleaner 4. Hand & Body Wash
- Body Wash
- Hand Wash
- Foaming Hand Wash
- Lemongrass Soap
- Grapefruit & Mint Soap
- Coconut Soap
- Manuka Honey & Kelp Soap
- Vanilla Soap
- Goat's Milk Soap 5. Skin Care
- Body Lotion, Extra Moisturizing
- Body Butter
- Hand Cream, Extra Moisturizing
- Lip Balm - Stick
- Lip Balm - Tub 6. Hair
- Normal Shampoo
- Normal Conditioner
- Volatizing Shampoo
- Volatizing Conditioner
- Dry, Damaged, Colored Shampoo
- Anti-Dandruff Shampoo
- Anti-Dandruff Conditioner
7 Babies
- Baby Soap
- Baby Body Wash
- Baby Shampoo
- Bubble Bath
- Sleepy time Bath
- Baby Moisturizer
- Baby Nappy Balm
8 Fragrances Free
- Laundry Powder, Top & Front Loader
- Laundry Liquid, Top and Front loader
- Laundry Soaker & Stain Remover
- Dishwasher Tablets
- Dish washes Liquid
- Glass & Surface Cleaner
- Cream Cleanser
- Normal Shampoo
- Normal Conditioner
- Hand Wash
- Body Wash
- Goat's Milk Soap
- Baby Nappy Balm
- Lip Balm - Tub
- Lip Balm - Stick
Services as an important part of a company ECO STORE is doing well in the market. During the time from the very beginning till now, the company has been through lots of issues about services, but the company kept developing the system of services. Now the system of services include: online report, call center, callback and feedback system etc.
Market as most important part of any company, ECO STORE has created a multi ways to achieving the market target. For example: the company dealing with local dealers, dealing overseas dealers, retail stores, online market. So basically the company’s marketing team is doing both ways of wholesaling and retailing. Planned Export Offering
9. Initial description of chosen product/service for export and country
The country that I chose is China.
The service we will be providing to customers are finding the way to build a relationship with NZ dealers first and once I achieved higher level I will direct bond with ECO STORE. Because at first I am not be able to have lots of customers so I am not be able to have better trade price but once I reached the level as similar as other dealers I can get better wholesale price from ECO STORE, so once I achieved that level which I get more profit.
Services part is bond with ECO directly at first. And as fellow the business grows I will provide more, as in any damaged products when customer got them then refund system to ECO or some other policy
We show the export products as below that are all the products we will be exported to the middle premium end and of the market, we will focus on baby’s goods shops and maternal stores , which are located in Shanghai, Beijing and Guangzhou.

Baby’s Products

Pregnant’s Products

Planning export offering

1. Customer Profile and Needs
The first thing if I create a business is start to build a database of every customer that I deal with, include address, contact phone number, products that customer chose, description of the customer, range of the product last (customer bought a baby wash and it can be use 3 weeks approx so I need give a call to the customer after, make sure the next purchase) etc.
Customer needs is a thing that what I called “must done” which is after - sale service, the reason why I call it “must done” because this is the only way to keep them continue purchase products from us. We must treat them as good as we can. There is another word I used to say is “warm up”. And there is other thing that we can get from after - sale service which is feedbacks. It is also important because once we get all those in formations we can use them to develop ourselves to achieve batter.

The target accounts will be the middle and high consumption group in China.

a) The Chinese middle and high class

Baby products are one of the fast-growing consumer product categories.

Older generations raised their babies with self-supplied products—such as cotton diapers and homemade baby food—but younger generations will rely on disposable diapers and canned baby food. New parents and grandparents hope to buy the best products possible for their children, especially given recent food safety concerns. For example, after the Sanlu Group melamine-tainted milk incident in 2008, most parents interviewed said they no longer trusted local brands of infant formula and would buy imported brands if they can afford them. In addition, many new parents will turn to Western baby products because the variety of traditional Chinese baby products is limited. Many young parents are already buying baby products online from US, European and other producers.

Many Chinese parents are desperate to get their hands on foreign-made baby products after numerous food safety scandals in recent years. In 2008 at least 22 Chinese companies were found to have sold dairy products containing melamine, a toxic chemical that can make diluted milk appear to have higher protein content. Six babies died as a result. In 2011, China’s largest milk producer, China Mengniu Dairy, said in a statement that mouldy cattle feed led to excessive toxin levels in its milk. Last year another large milk producer, Inner Mongolia Yili Industrial Group, recalled formula tainted with mercury. “Chinese consumers are so frightened and so sensitive to safety issues with milk powder that they are willing to pay a higher premium than consumers anywhere else,” says James Roy, a Shanghai-based senior analyst at China Market Research Group.

Allianz Group recently released the fourth edition of the "Global Wealth Report, more than 50 countries personal family assets and the debt situation included. According to the report, the total assets of the global individual households in 2012 increased by 8.1%. From the report, China's net assets reached 6.5 trillion Euros, ranked second in Asia, after Japan. From the net assets of the per capita, in the global range, China ranks thirty-eighth in.
The Data shows that from 2000 onwards, Asia (except Japan) the average annual growth of net financial assets of 14%, other emerging regions, such as Latin America (11.6%), Eastern Europe (11%) is significantly backward. Asia is the fastest growing region in the world, but it can't be ignored that this growth is driven by debt. In recent years, personal debt growth has exceeded the asset growth. In the past 12 years, Asia (except Japan) household debt to an average of 12.7% per year of the rate of growth.

From the national total wealth of view, China's net assets reached 6.5 trillion Euros, ranked second in Asia, after Japan. Allianz thinks relatively fast development in Asia China rhythm section may be due to the potential individual family needs. However, from the per capita net assets, China and the more developed emerging regions there are a clear gap: China's per capita wealth of 4720 Euros, significantly lower than South Korea's 19180 Euros. Globally, China ranks thirty-eighth in the.

According to the Allianz calculation, the number of middle-income population has increased to 413000000 in 2012 Chinese. The Allianz Global Wealth Report, "the owner of the assets can be divided into three classes, the global wealth of medium income crowd, people between the euro 4900 ~29200 Euro personal assets;" low wealth "crowd is assets of less than euro 4900; high wealth is the net assets of more than EUR 292 people.

Source: Mckinsey and Company, 2013

According to analyze from Mckinsey & Company, while income is expected to rise across China, some cities and regions are already significantly wealthier than others. Understanding these variations in the rate of development is important because they will affect which categories of goods and services grow most rapidly, and where.
Today, about 85 percent of mainstream consumers live in the 100 wealthiest cities; in the next 300 wealthiest, only 10 percent of consumers are mainstream, but that percentage will rise to nearly 30 percent by 2020. At that point, many families in these cities will be able to afford a range of goods and services (such as flat-screen televisions and overseas travel) that are now largely confined to the wealthiest urban areas. Exhibit 2 explains the distribution of income in four different groups of cities. Some of them (Foshan in Guangdong, for example) are small in terms of absolute GDP or population size. But it’s worth noting that the affluence of their populations could make them as attractive to companies as leading tier-one cities, such as Shanghai and Shenzhen.

2. How you plan to reach this market

We chose China to be the country where we will start the business. As a huge country with large business market, it has many opportunities however the competition is very intense, but the good thing is now the whole Chinese market is not be integrated yet, many dealers in NZ are buying ECO products and sending to China by post office. So the way we think this is a clear point to make the whole market merge together once I achieved that which means the business just successes.
Steps to reach 1. Start with a small business in 1 or 2 cities. 2. Research the market, start with lower price, build a database, and focus on after - sale service. 3. Once the business get up even a bit start do ad on internet and meanwhile try integrating the market. 4. After Ad and integrate the market rise up the price. 5. Hire more staff for marketing 6. Getting deals from ECO NZ for better trade price 7. Getting deals for wholesaling with supermarkets

3. Potential size of this Market

The potential size of this market is huge, because once we achieved the 7 steps as showed above we can do the copy thing in these three cities.
4. Partners / associates that you will need

Partners are important because the way I explain partners are people who are under the business that I created. Once I got successful in the first city, I will fine the partners who will be interested at the price I get from ECO, because ECO will compare who gets more turnovers yearly. And clearly who gets more turnovers who gets cheaper wholesale price.
Below are the known international and domestic companies who sell international brands baby products well as domestic retail companies that sell different baby products.

a) The famous baby products shops in Beijing

Leyou since its inception, always focus on pregnant baby industry, deepening the service, and in the domestic retail industry in the first to introduce the advanced ERP system. There are more than 350 suppliers and manufacturers in 21 countries in the world have cooperation whit Leyou. So we can contact with this company.

Lijia baby was established in Beijing in 2003, through unremitting efforts, established the largest and most advanced professional education baby products retail channel in China. Set products catalogue sales, chain stores, online shopping, comprehensive childcare services for the establishment of one of the new service model, and the LIjia baby has become a leader company in the fastest growing in the nursery industry in China.

b) The famous baby products shops in Shanghai

Les enphants is the meaning of "children" from the French. PIYOPIYO is also a big and famous company in shanghai. These two company mainly sales children’s products from different brands.

c) The famous baby products shops in Guangzhou

Both Love-baby and Xiaoshuxiong provide more and more family the practical nursery and the scientific parenting products.

5. Main competitors and their products / brands

In this case we will not have any products or brands as in competitor. Because ECO-store products are 100% pure (as explained in the beginning of the paper). Not like other brands or products are trying get more “pure”, less chemical. So we will not have that issue.
But competitors will still have who will be someone do the same business or someone has already been doing the business, so that is why I first step of the reach the market is get lower price ( as explain above ).

6. Currency in which you will conduct your business and evaluation of exchange rate fluctuations

As with personal investor, business essentially has four options to counteract our currency exposure.

The simplest way is just to monitor the changes, and this can be the best option if companies do not think that we are at a particularly high risk from exchange rate fluctuations.

The second way is to lock into an exchange rate for a fixed period of time by setting up a forward contract. If the exposure estimates are correct, this can be a beneficial approach.

A third way is to hedge against this exposure via derivatives. Although this may be the most complicated option, it can be effective in limiting exposure to volatility. It can also give a clearer picture of how a company's overseas operations are really performing.

Finally, we can also choose to manage their currency exposure through business practices. Where contracts are concerned businesses can also set up clauses that reduce this exposure. In many cases this comes in the form of an agreement to protect the client and the company should exchange rate movements exceed the agreed-upon level. We can also agree on setting all contracts in our core currency, protecting us from any exposure as they will always be paid the same relative amount.

7. ECO-STORE baby Products market Trend

For the parents, the most import things of baby products are healthy and safety. Product quality has long scared Chinese consumers, who often prefer to buy foreign brands they believe are superior to local products. The current product trends have demonstrated the varying needs of the Chinese market with regard to the baby and pregnant woman products industry. Health is a big concern for customers and that's why ECO-store scientists evaluate and minimise the impact of products on people's health every step of the way, from sourcing raw materials to end use. We will provide gentle cleansing nourishment and protection for babies.

8. Distribution channels

From the chart, there are many ways of distribution channel. First of all, marketing and selling of products directly to consumers. Secondly, selling of products through the retailers to consumers. Thirdly, selling products through wholesalers. In this business, we are the wholesalers, we sell the eco-store products to the retailer, and the retailers sell the products to the Chinese consumers.

9. Customers (and users)

China parents worry about the quality problem of domestic infant supplies, are more willing to buy expensive imported products. The report mentioned earlier Chinese authorities on five infant formula manufacturer’s survey. Reported that, for infants and young children and other products in the Chinese prices a lot more expensive, experts say, in part because of the import tax is only imported baby products more expensive, the main or because parents worried that the domestic baby products may have been contaminated.

The experts said: "the vast majority of only one child Chinese parents, don't want to venture to use domestic products may be contaminated. Foreign Company knows it, many of them use such opportunities." The report also quoted analysts as saying, as long as the child is eating, or come into contact with the skin of children activities, China parents are willing to pay big bucks to buy. In addition to these products include toys or food. Many China made toys were found to exceed the standard of lead, mercury and other toxic substances. Our main customers are parents who are in the Chinese middle and high class.

10. Supply partners
在谈论的生意中，我们首先是以一个小生意的模式进入到中国市场，先用较为低的价格拥有一些客人并且我们通过良好的售后服务长期持有这些客人，建立好的data base，在这个时期的供货商或供货伙伴应该是在新西兰最大的供货商，当我们可以有一定量的turnover 之后就可以尝试和ECO总公司拿更好的价格。

11. Legal and contractual issues
New Zealand-China Free Trade Agreement that entered into force on 1 October 2008. The NZ-China FTA (New Zealand Ministry of Foreign Affairs & Trade, 2011) was signed on the 7th of April 2008 in Beijing. It is the foremost developed country that New Zealand reaches a free trade agreement with China. As New Zealand’s fourth largest trading partner, China holds $1.6 billion of merchandise exports in New Zealand. It is estimated that China's middle class nearly accounts for 100 million people that is growing now and takes a large share of New Zealand's dairy products and wood exporting. New Zealand's negotiations with China may encourage the exporters in the 'game' and help guard existing market shares, particularly in areas like dairy products, wood and so on.

Chinese government encourages foreign companies to come to China. Eco-store has already had a lot of funs in china. Many people have to buy the eco products on line and pay high shipping fees. Eco-store has shops in Honkong and Taiwan, but there is no store in mainland. Some people have to buy the products when they travel to Hongkong Taiwan or New Zealand. So many baby’s product shop wants to sell the products from Eco-store.

Export Country Analysis

1. Country Description

It is viable to export our products to China. Political and trade ties between New Zealand and China is at its strongest presently. Currently, there will be no tariffs applied to beauty products which results to lesser costs of exporting. The RMB currency is stable with no reservations about currency exchange, translating to stable profits.

Furthermore, according to the studies done by Coface (2013) on China’s Risk Assessment, its country rating is A3, which means “changes are generally good but somewhat volatile political and economic environment can affect corporate payment behaviour. A basically secure business environment can nonetheless give rise to occasional difficulties for companies.”

In the risk assessment, Coface has listed below strengths and weakness of the China market.

Strengths * External accounts benefitting from competitiveness and industrial diversification * Risk of foreign over-indebtedness limited thanks to the high level of foreign exchange reserves and to the current account surplus * Sovereign risk contained: public debt mostly domestic and denominated in local currency * Gradual move up-market * Infrastructure development spurred by the stimulus package * Very high corporate savings rate that funds most investments

Weaknesses * Growing social tensions linked to mounting inequalities * Aging of the population and gradual drying up of the pool of abundant cheap labour * Overcapacity in industry and trade * Weakness of Chinese banks due to credit dynamism and uncertainty as to the level of non-performing loans * Environmental problems

Environmental Analysis of Market

Driving force | Opportunity | Threat | 2,Economy | - second largest economy- China’s beauty industry is worth $26 billion a year, 3rd largest in the world- Growing income and awareness of personal appearance- Fixed exchange rate for RMB provides for new import/export businesses. | - Rising cost in manufacturing and shipping | 3.Ethical issues to consider | - Chinese men are more open to use products these days- Chinese consumers look for real value in products, paying attention to the ingredients, how they function and how effective they are.- Increasing environmental and social awareness- More emphasis on natural and healthy lifestyle.- Appearance is considered as a code of etiquette in most of social life. | - Packaging of the products should respect Chinese customs. i.e. black symbolizes death. The number 4 is considered to be unlucky. | 4.Political and legal systems | * No tariffs on beauty and skin care products from New Zealand * Government interest in free trade- Chinese government encourages foreign companies to Invest in China. | | 5.FDI and collaborative venture | | | 6.Trade agreements | - The pollution makes people in China keen to buy products specially skincare from the organic places like New Zealand. | | 7.Monetary systems used | - Chinese consumers are looking for organic and natural products | | 8.Sociocultural systems | - Not so many from New Zealand or focus on organic | - So many competitors have already marketed in China | 9.Technological | - having a joint venture with a high end boutique spa would suit the company. | - The usual distribution channels are too costly for the company.- training of staff in China might be challenging | 10.Natural enviroment | - The increasing number of middle class. | - Since we will be the supplier to the spa, there will be no contact with the end user and it will be difficult to get valid feedback. |

Entry Strategy, Implementation & Operational Changes

Entry Strategy 1. 100% Vegetarian
No animal testing, artificial colours, parabens or phthalates
Sent using New Zealand Post or buy from supermarkets
Aust & NZ Supermarkets or Online
-
Current Value chain `
Inbound Logistics
Operations
Outbound Logistics
Marketing and Sales
Service

2. Export added-value value chain
100% pure & organic from New Zealand
No animal testing, artificial colours, parabens or phthalates

Buy from our high end SPA or Hotel
High end SPA & Hotel, sale with service as well
Facial & body SPA
Inbound Logistics
Operations

Outbound Logistics

Marketing and Sales

Service

3. Entry strategy
The product is made out exclusively from natural ingredients, so the product price will be higher.
Primal Earth has got a wide range products for both men and women, with the price range of $50 to $70 NZD
Products are supplied only to the boutique SPAs and hotels, in limited cities in china.
Products also sell with service in SPAs and hotels.
Implementation
1. Partners/intermediaries and their roles 2. Risk analysis with mitigations. 3. Timeline of operational activities. 4. Costs and pricing

Operational Changes 1. Existing organisational chart showing export related activities. 2. HRM policies and practices 3. New HRM positions and their purpose 4. Marketing decisions required 5. Amendments to the product/service and its related packaging/advertising. 6. Financial systems and report changes.

Conclusions and Recommendations

We will sell our products via high-end boutique hotel spas of the URBN Hotel Chain – the first “carbon neutral” hotel in the Tier 1 cities in China (Beijing will be our first aim). The target local market for our products will be the middle class in the city and the travellers from all over the world.

The employees of the SPAs and hotels need to be trained how to introduce and use our products properly. Sales status and changes need to be reported by the SPAs and hotels to help us change our product like packaging or types to meet our customers.

The price of our products will be relatively high- $50 to $70 NZD- due to the characteristic of natural and organic, and also the fees of transportation and training. Products sell both by pack and with services in limited SPAs and hotels.

Bibliography

Appendices

Reference

Allianz Global Wealth Report from Allianz Company

http://www.chinafta.govt.nz/1-The-agreement/2-Text-of-the-agreement/04-Chapt-3-Trade-in-goods/index.php