Canada - New Zealand
Dev Kiran Patel
Table of Contents
Background Information 2
Political Information 5
Economic Information 6
Cultural information 13
Marketing Information 17
New Zealand is located in the continent of Oceania & Australia. Placing in the south-west Pacific, New Zealand has two main island which are North Island and South Island. Stewart Island and many islands lie offshore. Furthermore, New Zealand's topography is distinctive, forming an extremely sharp, and straight northwest diving the tallest mountain of New Zealand, the Southern Alps
In New Zealand, the highest population people live in Auckland, which beats of the 67 districts as Male has 687,495 and female with the total of 728,055 which give the total population of 1,415,651.
The area of New Zealand is 268,021km² and it is bigger than the United Kingdom by 11% 242.495km² and Canada with the area of 9.985 million km².
The Language spoken in New Zealand is English then followed by Māori, Samoan, Hindi, Northern Chinese, French, and Yue known as Cantonese.
Moreover, New Zealand is placed in the far north has subtropical weather during summer, and inland alpine areas of the South Island can be as cold as -10°C (14°F) in winter, most of the country lies close to the coast, which means mild temperatures. The average New Zealand temperature decreases as you travel south. January and February are the warmest months, and July is the coldest month of the year. The country consist four seasons which are spring, summer, autumn/fall, and winter.
The 10 biggest cities in New Zealand are Auckland, Wellington, and Christchurch then followed by Hamilton, Tauranga, Napier, Dunedin, Palmerston, New Plymouth and Nelson.
The working hours in New Zealand is no more than 40 hours per week (not including overtime) with the working days of no more than 5 days. Furthermore, the current minimum wage rate are for employees 16 years above:
Type of minimum wages
The literacy rate in New Zealand remained stable at 99% shows that the country's people can read and write with understanding a short simple statement on his/her everyday life.
Type of government
The type of government are consist in three type which are parliamentary system, the Executive, and the Judiciary. The parliamentary system is made up of only one house which sit 120 members in the house of representatives who are votes in using mixed number of proportional voting system. Furthermore, New Zealand has a constitutional monarchy system with the chief of state Queen Elizabeth II. The representative Queen in New Zealand is the Governor-General Dame Patsy Reddy. Moreover, The Executive (Ministers of the Crown also known as the Government) administers the law. The Judiciary interprets the law through the courts. The government's work by going through a democratic election in every 3 years.
Political issues affecting the business climate and international business.
There are no existent political issues in New Zealand, the country is absurd stable and fair dealing towards those who are interested in investing in New Zealand. According to Doing Business by The World Bank connotes that New Zealand are the 1st among 190 countries in starting a business and dealing with permits.
Tariffs, quotas, embargoes
The tariffs in New Zealand starts from zero to 10% depending on types of business. However, vehicles, and most of computer softwares are tariff free where Alcoholic beverages, cigarettes and tobacco and petroleum products are duty paid. Furthermore, all imported goods are charged to a 15% Goods and Service Tax (GST). According to HS tariff, chocolates in New Zealand are charges 5% on MFN duty rates and 15% on sales tax. The government of New Zealand execute the import transaction fee of NZ$18 on commercial import which has a duty of NZ$50 above, however, the fee is not charges on foreign commodity declarations for goods under NZ$1000. As for trade embargoes, New Zealand is a member of UN, the current UN sanctions are North Korea, Iran, Sudan, Syria, Africa and many other third world countries but sanction can be lifted if the countries accepts UN's international laws.
No countries are corruption free. According to the corruption perception index from transparency international, New Zealand is ranked number 1 but below Denmark because they have the same score of 90 out of 100 in 2016. Furthermore, Canada is ranked number 9 with the score of 82 out of 100.
Type of economy
New Zealand is a mixed economy which operates on free market principle. It has substantial manufacturing and services sectors quotas a highly efficient agricultural sector.
According to the World Bank, the GDP for New Zealand is 185 billion USD (2016).
As we can see, New Zealand GDP increase by 10 billion USD between 2015 and 2016.
GDP per capita
According to the World Bank, New Zealand's GDP per capita in 2016 is 36,842 USD (2016). Furthermore, New Zealand is ranked 46 in the world but Canada has a higher GDP per capita than New Zealand with 50231 USD (2016).
New Zealand inflation increase to 1.9% in 2017 which is above market expectations of 1.8%. WIth the increase of inflation, the cost for consumers increase in the food group, clothing & footwear, transport and miscellaneous goods and services, these are the main stimulate behind the increase.
Currency, stability of currency & currency vs. CDN
The comparison of the CDN & NZD shows that CDN is a stronger currency. As the graph picture shows that the currency of NZD decreases but soon the currency would increase and will be stabilize in the future.
The tax rate in New Zealand for personal income are :
Up to $14,000
Above $14,000 to $48,000
Above $48,000 to $70,000
Remaining income over $70,000
The company tax rates are flat at 28% & the Goods and Services Tax (GST) of 15% on nearly purchases.
Importing partners and products
In 2016, New Zealand imported $35.7 billion worth of product, making the 48th largest importer in the world. Furthermore, in the last 5 years of imports have decreased at the annual rate of -0.823%, from 35.3 billon in 2011. New Zealand most recent imports are Cars with 9.4% then Crude Petroleum for 4.99%. This is because has no own brand of cars or natural resources of petroleum. The importing partners for New Zealand are Australia ($6.38B), China($4.76B), USA($3.57), Japan($2.19) and Singapore($1.46B).
Exporting partners and products.
In 2016, New Zealand exported $32.5 billion worth of products, making them the 44th largest exporter in the world. In the last 5 years exports of New Zealand have decreased at the annual rate of -1.557% from 38.7 billion in 2011. The most exports are concentrated milk for 12.2% and then sheep and goat meat for 5.58% The exporting partners are China ($6.59B), Australia ($5.78B), USA ($3.7B), Japan ($2.08) and South Korea ($1.04B)
The natural resources in New Zealand is oil and gas which is very important for their economy because oil is a major export for the country and gas is important for their domestic economy. Furthermore, minerals are rich in New Zealand, and they're best known for their production of gold and coal, them could be found in iron sands, seafloor gold, base metals, phosphate and other minerals on offshore. With the potential of this minerals, the government of New Zealand contemple the environment responsible of development for the resources as it is key to the economy. Lastly, geothermal is extracted energy from heat beneath the earth's surface and in New Zealand they're rich for it.
Stability of economy
New Zealand has a stable and competitive economy and has been stable for and had effective positive economic growth for the last 35 years. The export of goods and services are around 30% of GDP. Furthermore, New Zealand has muscular macroeconomic foundations and they're among the top 20 rated in the world. Not only that, the Standard & Poors gave New Zealand an AA+ currency rating, and AAA for T&C assessment. New Zealand have continued a low inflation environment for more than 20 years. The independent monetary policy on price stability, a durable floating exchange rate and no exchange controls or restrictions on volunteering of funds.
The trade barriers can make business costly and difficult to export a market. The trade barriers for any type of export from food to good and services. There are
Data storage requirement
According to Trading Economics, the unemployment rate in New Zealand is 4.6%. In Jan 2017 the percentage was at high at 5.2% because of fresh graduates finding jobs.
New Zealand have agreed a few treaty internationally. For example, the Antarctica treaty system to ensure the interest of all human that Antarctica will be peaceful and shall not be harm. Furthermore, the convention on biological diversity was embraced in 1992 to help develop a national strategies for conservation and sustainable biodiversity. The convention on international trade in endangered species (CITES) is to monitor trades in animal and plant species that is not threatened in their survival in the wild. The international union for conservation of nature is to conserve natural resources and New Zealand is a member of IUCN. Moreover, New Zealand came up with the Whale policies to ensure the securities and conservation of whale being killed or harm. The world heritage convention motivates the identification, protection, preservation of the world's cultural and heritage sites for future generations. Furthermore, New Zealand signed the international agreement with United Nation, World Trade Organisation, and World Bank to follow international law.
Laws on investment/ exports/ international business
All goods coming into New Zealand must be declared by the customs because New Zealand doesn't want any disease or virus. To declare your goods, you can lodge the goods details in advance, by sea - no more than 5 days and by air - no more than a day. One can never retrieve their goods without customs verifications. To start a business in New Zealand, we must follow their country laws and steps to ensure 100% transition. The business will have to register for tax number, get a lawyer, accountant and bank can help setting up bank account for transferring funds from oversea, it is also advice to find legal and financial advice. Before setting the business, Goodies, Inc will have search the company office and intellectual property to ensure the name is not already protected. If Goodies are responsible for foreign investment in New Zealand, an application must be done to the OIC who are planning to invest more than NZD $50 million establishing a brand plant or purchasing more than 25% in a New Zealand company. Moreover, OIC approval is needed to invest land over 5 hectares. In order for Goodies to be operational, the corporates are taxed flast 28% and with the GST of 15%.
To conduct a business in New Zealand, one must be familiar the business etiquette so that the business reputation won't be harm. New Zealanders can be very reserved toward people/business they don't know but once relationship are developed, they are friendly and social. The business meeting etiquette are:
Schedule an appointments should be a week advance by telephone or email. It is easier to schedule meetings with senior managers if you're coming from overseas. Tips, it may be difficult to schedule meetings during December and January because it's summer vacation
One must arrive at meeting on time but better to be few minutes early and as expected a small talk will be occurred before getting into business. If one do not arrive on time, the behaviour may be interpreted as an indication that you are unreliable or they may think that your time is more important than the person whom you are meeting
While, getting down into business, present the business case with facts and statistics and emotions are not important in the New Zealand climate.
While discussing, it is important to maintain eye contact and have a few feet of personal space.
New Zealand business climate are serious but have a relaxed atmosphere.
When presentation, do not exaggerate on what they say they can do but what you can do.
When negotiating with New Zealanders:
Don't be hussle, because they love taking them time to process.
Don't pressure them.
Start your negotiations with real statistic, it is not a bargaining culture and they do not expect to bargain over the price.
Be straight and they'll give you the same in return. Kiwis don't mind economy of language and are not impressed by more detail than is required
Lastly, agreements and proposals must state in point form and with clarity and all T&C must be explained with respect.
Gift giving aren;t normally exchanged in business situation but if invited over to someone's home, it is advised to bring gifts such as chocolate, wine or small bites. Furthermore, to address people is by using, Mr., Mrs., or Miss, followed by the surname or full name. Moreover, there's no specific formalities surrounding the giving and receiving of business cards but it normally happened at the end of the discussions.
New Zealand is a monochronic culture. Significance, they like doing things one at a time because they utilise a certain structure and being appropriate at time and place for everything. They do not like interruptions because love to concentrate on the task on hand and taking their time to commit. Moreover, Canada is also a monochronic culture.
Hofstede's cultural dimensions
The power distance in New Zealand is much better because, there's more convenient access to hierarchy but both employees and managers must be consulted and the communication is informal.
New Zealand individualism which is expected is that people look after themselves and their families but in the business world, employees are expected to be self-reliant and display initiative. Hiring and promotion are decided based on evidence who can do more.
New Zealand masculinity is 6 points higher than Canada, this shows New Zealanders are proud of their achievements in life and it offers basis for hiring or promotion decision in a workplace.
The uncertainty avoidance is 1 point higher than Canada, connotes that new ideas are easy to be accepted. New Zealand's tolerant of ideas or opinions from anyone and allow the freedom to express.
The long term orientation is New Zealand with a score of 33 shows that New Zealand is a normative country. This stats shows that people in societies have strong concerns with establishing the truth by achieving quick result.
New Zealand indulgence is 7 points higher than Canada, this suggest that people in societies generally shows willingness to realise their impulses of enjoying life. They contain positive attitudes and have optimism. Moreover, they're very flexible on leisure time, because they love spending to make them life happier.
The market-entry strategies that we chose the brownfield investment by joint venturing to enter a foreign market. This joint venture will be partnering with a local investor because this would benefits Goodies by having an existing distribution network.
Limited outside opportunities because partners would have to sign an agreement or a non-compete agreements that would potentially affect partners relationships by having conflicts.
Shared business risk, because each partnership will have to distribute or sell the same amount of product making a burden as a motivation for a join venture and it will decrease the negative impact on profitability lower because everyone is putting an effort.
Increased liability because the company is responsible for it claims on an equal.
Flexibility, because partners won;t have to give up control because each partner would have to able to maintain its own identity and business can go back to normal until joint venture is complete.
Inconsistent division of work and resources because it can cost the company to produce unequal productivity and will lead to conflicts and a lower rate of success for a joint venture
Shared resources & responsibility, since company lack of knowledge and technology. Newcomers would come together to access to resources without spending capital to obtain it
The disadvantages of brownfield investment is, it might produce obstacle when joining the company with the attain personnel, because they're forced to take in new policies of behavior. Furthermore, brownfield sites are sometimes located in plain-looking sites that are hard to develop for the employees. Provided that investors are not attracted to the business, the business may not be able to sustain itself. The other variable cost is the environmental remediation can come costly and slow the process down.
Brownfield investment is cheaper than greenfield because it has an investment strategy is that the building is already constructed and the start-up cost will be cheaper. This investment gives another advantage to skip a few steps that are required to build a new plant, such as building permits. Furthermore, the other advantage is that the facility already have the required equipment, this reduces the cost of expense to only maintenance, if there;s the need to add a new equipment, it still be cost friendly. This investment save time and money.
Primary & Secondary research
Goodies, Inc will carry out market research for both primary and secondary research to ensure that if New Zealand is a good place to start out first Asia-Pacific branch plant.
Primary research can be known as field research involving collecting new data that has not been collected. We will be collecting fresh surveys via questionnaire, short interviews in a focus group. For example, asking question what flavours do you like?.
Secondary research can be known as desk research involving collecting existing data that has been produced. We will be finding existing data from the internet, and company reports. This secondary research will help to see existing chocolate company on how well they did.
Both primary & secondary can be either qualitative or quantitative because they can be factual or opinion informations.
They advantages for primary research are specific to your needs and quality control, as for secondary research are cheap and quick. The disadvantages for primary search are expensive and takes a longer time to accomplish, as for secondary data could be old and unreliable, and may be not your specific needs. Market research is very important because it helps reduce the risk of launching a product.
Since, New Zealand are one of the most consumers of chocolate in the world, there won't be any changes required to adjust the product into their culture because Canada and New Zealand have similar cultures.
To determined our product price, we will be analysis different pricing strategy and looking over our competitive prices in order to find the best price.
The table below shows the pricing for a chocolate block that are sold on hypermarket and
supermarket. By calculating the average price for a chocolate block from our three main competitors is NZD $4.05, CAD $3.54. The analysis shows that Goodies we will have to either place a pricing that is lower, similar, or higher.
Price for a chocolate block
Cadbury Milk Chocolate
NZD $3.79, CAD $3.32
NZD $4.99, CAD $5.24
NZD $3.39, CAD $2.97
Goodies will use two pricing strategy which are penetrating pricing & psychological pricing. Penetrating pricing is a good way to exhibit our new product by setting our price at a low price to gain market share since our product will be new in the market. Once, penetrating pricing are satisfied, the price will then be normal. The second pricing strategy is psychological pricing is the way to manipulate consumer to think and make an emotional decision on a product. For example, instead of putting 6$, we put at 6.99$, this can earn us that 1$ extra profit.
Using Penetrating Pricing as a start to gain market share
After Success of Penetrating Strategy, then comes Psychological Pricing
NZD $4.30 , CAD $3.76
NZD $4.99 , CAD $4.37
This prices will be competed with Whittaker's mainly, as they are a local product since 1896 and there're local's favourite.
New Zealand is one of the top consumer in the world for chocolate. As we are gaining market share in the New Zealand market, Goodies will be selling their organic classic milk chocolate and white chocolate.
The milk chocolate will consist organic ingredient such as milk, cocoa, cocoa butter, sugar, lactose, soya lecithin and vanilla. This are required to make our milk chocolate tasty. Furthermore, the white chocolate will consists the same ingredient but without cocoa solid which makes the the chocolate brown. Quality is very important to Goodies because we pick premium ingredient to make our chocolate long-lasting and tasty.
The packaging for our chocolate block will be the size 7cm X 4.5cm and will consist 3 colours to attract consumers. The chocolate block packaging will be the plain simple with 3 colours blue, white, black with the Brand name will stand out at the front of the packaging and a small brand name at the back to remind consumers who we are.
Size is available in 3 weighs 135g, and 200g, this sizes can be enjoyed with friends and family.
Goodies Label requirements will include address, nutrition information, ingredient, websites, customer service for International, and local (New Zealand), bar code to insure our authenticity.
English and Maori to satisfy their culture.
Milk, soya, vanilla, and chocolate.
According to our research, we have chosen branch plant by using centralized strategy in New Zealand although it is expensive but it will be the first Goodies branch plant at a foreign country. The advantages of using branch plant strategy is lower shipping costs to other country for example, it is cheaper to transport from New Zealand to Singapore rather than Canada to Singapore because it take shorter time to transport. Furthermore, import regulations and tariffs are no longer an issue and product modification are easier, for example, Malaysia language requirement are both Malay and English.
Furthermore, the locations Goodies will be selling their product is at Hypermarket, Supermarket and E-commerce. E-commerce is very beneficial for consumers because customers can quickly and easily choose and pay with whatever method do the company wants. Example of supermarket Goodies will distribute are, Countdown, Tesco and Woolworths. Moreover, the product will be also placed in convenience stores such as Dairy. This will cover the whole North and South Island.
The product placements in Supermarket and Convenience stores are at eye level so at the middle shelf next to Whittaker's and Cadbury, this will increase our cost but it will catch potential consumers to purchase our product
To distribute our product to Supermarkets and Convenience store, Goodies will use land and air transportation or train throughout New Zealand.
Goodies will be also using the trade show strategy by renting a booth and displaying/selling product. This will attracts thousands of potential customers to buy our product and making money fast. Moreover, Goodies could get attention from other business and make deals within the trade show to increase market share.
Promotion is key in making sales and brand loyalty. Since, Goodies is at a foreign country, we have decided to make new ads for New Zealand. Goodies have decided to do two marketing strategy which are Sales Promotion, Public Relations and Digital Marketing.
Applying Public Relations, we chose to use TV advertising because it will the tv advertisement would cover the whole New Zealand target audience. This can introduce Goodies product background, and what makes Goodies so unique than other brands.
Strategizing Digital Marketing, we will be spreading out news and promotions via Social Media such as Facebook, Instagram and Twitter using the hashtag #Goodieschoco, Youtube (by blogging) by sponsoring Shaaanxo to vlog our product to introduce them by tasting and explaining our product.
Sales Promotions are needed to attract customers, by accomplishing that we have chosen to give free Goodies keychain as a gift when customer buys 2 blocks of Goodies chocolate and we will be giving out free samples of our product because consumers love trying what they like before purchasing. Furthermore, during Christmas we will doing a sales promotion of 15% for a week.
There may not be any logistical challenges at New Zealand because, the government have gave good transportation routes. Furthermore, New Zealand is very peaceful and stable country and this will reduce any legal, political and financial issues if we stick and follow their laws. If Goodies is encounter with any challenges, it would easy to solve the problem when occur.
Based on all the information and by analysing the information that we gathered. Goodies should invest in New Zealand by branch planting. Furthermore, Goodies must be patience, because to gain market will take months. Moreover, the advantages in New Zealand that challenges will be easy to solve as the Government will do whatever to help Goodies if there's any problem since, New Zealand has the least corruption in the world. When Goodies is successfully established in New Zealand, Goodies can go international by distributing their product to few other foreign country such as Australia, Singapore or Malaysia. There are three main competitors which are Cadbury, Whittaker's and Kitkat but Goodies will no problem taking away their spot in the market share. Milk, area,
By restating and reaffirming the desirability of New Zealand, Goodies investment will be successful even though with competitors like Whittaker's and Cadbury, Goodies will get a placed in the market share but Goodies must be patience in order to be success.
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