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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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Andrews Meat Industries is a family-run fresh meat and food manufacturing business located in Paddington, in Sydney's eastern suburbs. The business has successfully ongoing for 58 years, since 1960 under the lead of Peter Andrews Snr, founder of Andrews Meat. Andrews Meat has expanded from a fresh meat cutting business into a wholesaler of diversified food service, value-added cooked and export business. (Andrews Meat Industries, 2014) Andrews Meat also provides delivery service to food industries in regional areas around New South Wales, Australia Capital Territory, Victoria, and Queensland. (Andrews Meat Industries, 2014)  

I choose this company is because  

The demand for beef in China is high.

For Andrews Meat to successfully expand their company into China's market is to consider and understand about the major differences between China and Australia.  

One of the four major differences to consider is the language differences in China. It is important for Andrews Meat to communicate in mandarin with the government, suppliers, partners, and consumers. This is because speaking in their language can build relationships and treated with respect by the people in China (Chauvot, 2016) as it shows that the company is putting an effort to connect with the society. Mark Zuckerberg, the founder of Facebook, who is found delivering his speech and answer questions entirely in mandarin at Tsinghua University in Beijing in October 2014 (Leibowitz, 2017), is a great example where all business people should look up to. He put his time and effort to learn a completely new language, the reason is to understand a country's culture and to promote Facebook into China's market. (NBC News, 2014) Despite that, having the ability to communicate in mandarin allows the company to save time in decision making, which increase productivity. (Chauvot, 2016)  

China's culture is a very interesting and mysterious culture.  

The time zones between these two countries are different. Beijing, China is 2 hours behind from NSW, Australia. The different time zones may affect the business efficiency and may delay deliveries, plans and decisions made. (BME User Manual, 2018, pg. 103)  

China is the world's second largest economy, and an economic downturn may have a huge impact on Andrews Meat. The company will face difficulties in expanding the business and experience loss of sales.

An economic downturn in China may be caused by a high interest rate. This is the main factor why consumers lost their confidence in spending, as consumers are likely to save more money in the bank rather than borrowing due to high debt repayment. Therefore the consumer purchasing power is low. This will lead to a fall in demand for Andrews Meat products. The company will have to reduce its price lower than other competitors to encourage sales, hence the company will not be able to earn much profit.  

Not just that, Andrews Meat may face difficulties in expanding its business in China. According to BME User Manual (2018), if interest rate is high, there will have an impact on cash flow and the ability of a business to borrow money to finance business growth. Andrews Meat will not invest or borrow money to expand its business. With the fall in demand and sales of Andrews Meat's product, the company will make a loss instead.

I would suggest Andrews Meat take up retained profits as internal source of finance. Retained profits is a self-raised fund where the profits are kept in the company rather than paid out to shareholders as a dividend. (BME User Manual, 2018) It is widely regarded as the most important long-term source of finance for a business. (BME User Manual, 2018) Funding through retained profit can be a powerful strategy for Andrews Meat's expansion in China and help built on steady incremental growth. (Decker, 2018) Once the company make a profit, the business owners can decide whether to take the profits out of the business or make investment in the company. (BME User Manual. 2018) This means that Andrews Meat's owners can have full control of the business. There will be no interest to be paid as this funding does not involve the bank.

Guariglia, Liu and Song (n.d., pg. 5) cited Liu and Li (2001) as arguing that the growth of national bank loans and self-raised funds are both positively related to the growth of provincial output. Hence, using retained profits and (secured loans) can help funding in the expansion of the company in China.

Most social media platforms used in Western countries, such as Facebook, Instagram, and Twitter, are blocked in China. Instead, they are all replaced by other social media platforms which government can monitor. ("Social media and censorship in China", 2017) Sina Weibo, or Weibo in short, is a famous micro-blogging platform in China. It is often called as China's Twitter, also can be considered as a combination of both Twitter and Facebook. According to Nha Thai's blog (2018), Weibo has reached 340 million monthly active users. Therefore, it is an effective tool for Andrews Meat to use Weibo to improve brand recognition in China. Big foreign corporations who has created fan pages on Weibo, such as Coca-Cola, see Weibo as an effective social media platform to promote their presence in China. (Lyakina, 2018)

The features in Weibo enable companies, organizations, and celebrities in China to interact and provide services to their customers, fans and followers. (Nha Thai, 2018) Andrews Meat is able to achieve brand loyalty by actively sharing interesting content and videos about the activities in the company or promote their products on Weibo. To build up engagement with more followers or consumers, the company can follow Chinese influencers in Weibo or other well-known companies, as this can maximise brand awareness. Not just that, the company can also save cost in doing marketing research. There are monitoring tools, Weibo's statistics, that can assist businesses in analyzing the performance of their accounts. (Lyakina, 2018) Andrews Meat can easily answer questions asked by the people, and to ask questions on their page for feedbacks. Furthermore, Weibo also have a Weibo Poll, which works exactly like Twitter Polls, where all followers can participate and to vote on the question asked. The poll will show up as a normal post in followers' timeline, making it easier to notice and vote. (Roberts, 2015) Andrews Meat can receive instant results and feedbacks directly from the consumers on what they think and how they feel. This, in other hand, also saved time for Andrews Meat in doing their marketing research.

It is said to be a steep and complicated learning curve for foreign entrepreneurs and companies to choose the right marketing strategy and applying it in China. (Lyakina, 2018) Due to the language differences, outsourcing a marketing professional in China is highly recommended to help Andrews Meat in choosing the right strategy and managing its Weibo page.  

Trademark is a visible sign that indicates the source of goods or services, thus allowing the consumers to differentiate the goods or services of one producer from those of another. (article) A trademark can protect the Andrew Meat's logos, names, products and packaging. (Williams, 2007) In China, the trademark protection adopts the "first-to-file" system for trade mark registration. It is important for Andrews Meat to register trademark with China Trademark Office (CTMO) (IP Aus) before entering into the market as to lower the risk of the trade mark being hijacked. (article) The more you differentiate your brand from others in your industry, the easier it'll be protected. (Williams, 2007) Thus, Andrews Meat is advised to choose a unique name and logo to stand out from competitors and the business will be protected. If a third-party of any unauthorised use of the trademark is likely to deceive or confuse. (BME User Manual, 2018, pg. 75)  

 

Other than that, Andrew Meat's intellectual property can be protected globally by registering a patent under the Patent Cooperation Treaty (PCT), which is administered by the World Intellectual Property Organization (WIPO). (BME User Manual, 2018, pg. 76) The PCT has now takes effect in 152 contracting states, according to WIPO website, and China is in the list. Andrews Meat can take advantages from PCT as the company has the right to prevent others producing, selling, using or otherwise exploiting the patented invention in Andrews Meat. (BME User Manual, 2018, pg. 74) The company also have the time up to 18 months or more to reflect on the desirability of seeking protection in China and appoint local patent agents for patent application.

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