International Marketing

1
International Marketing

• Taking Sustainability Global with Sichuan Corn-T

Aaron Murphy Emily Ward Lin Yin
2
Company Biography

• Lan Tian Ltd. was built up in 1995
• Successful in the air-conditioning industry
• Sichuan Corn-T Biology Technology Co., Ltd
• Environmentally friendly plastic bag industry

3
(No Transcript)
4
Products

• Grocery bags
• Garbage bags
• Produce bags
• Plastic wrap alternative

5
Product Description

• Raw material PLA (Polylactic acid)
• No harm to human health or the environment
• Decomposes completely in three to six months
• Decomposed product used as organic manure to
  fertilize plants in Chinese farmlands

6
Current Business Operations

• China
• European countries
• the United Kingdom, Italy, Germany
• Distribution Chinese supermarkets
• Carrefour and Trust Mart
• Plans to sell in smaller chain stores and
  privately owned shops

7
International Marketing Proposal

• Export biodegradable and environmentally friendly
  bags from Corn-T
• grocery bags, garbage bags, produce bags and
  plastic wrap alternative
• From Chengdu, China to Mexico City, Mexico
• Direct business to business marketing with
  Comercial Mexicana

8
Comercial Mexicana

• Partnership with Costco Wholesale Mexico
• La Comer en tu Casa
• Restaurantes California
• City Market

9
Benefits to Comercial Mexicana

• Benefits beyond profitability
• Positive impact on Mexico
• Creating awareness for sustainable living and
  showing support to help protect the environment
• Positive brand image

10
Cultural Analysis

• Absolute necessity to come to an understanding of
  cultural differences
• Self referencing criterion
• Can ultimately lead to failure due to
  misunderstandings

11
Cultural Analysis Family Social Institutions

• China
• Large families live together
• Historically men were the center of their
  families
• Family values are very important in Chinese
  culture
• Families have a strong emphasis of saving money

12
Cultural Analysis

• Mexico
• population of over 100 million people
• Mexican families are also very harmonious
• similar to China, large families often live
  together
• 40 million people living under the poverty line
• Richest 250 families in Mexico have 1/3 of the
  countrys wealth
• Computer usage is low (26 of the population has
  internet access)

13
Chinas Economy

• Before 1970 Chinas economy was relatively small
  with little growth
• Since then it has been on the rise
• Foreign trade and GNP have been steadily growing
• Recent strong focus on advanced technologies

14
Chinas Economy

• Several problems have occurred as their economy
  has grown
• availability of energy, transportation of
  critical commodities, and communication
• China is the worlds leading producer of rice
• Also important in producing wheat, corn, tobacco,
  soybeans, peanuts, cotton, coal, and crude oil

15
Mexicos Economy

• Mexico has a free market economy
• Mixture of modern and outdated industry and
  agriculture
• High competition in telecommunications,
  electricity, natural gas distribution, and
  airports

16
Mexicos Economy

• Income distribution within the country is highly
  unequal
• Economic priorities include reducing poverty and
  creating employment

17
Sustainability Needs

• Both China and Mexico have many organizations
  currently focusing on sustainability
• Beneficial for Corn-T to create awareness in
  Mexico
• Current environmental challenges in Mexico
• Scarcity of hazardous waste disposal facilities,
  scarcity of fresh water resources, air and water
  pollution, and deforestation

18
Trade Statistics

• Chinas and Mexicos relationship is heavily
  based on their constant battle in the U.S. market
• As of July 11, 2008 Mexico has a trade deficit
  to China of more than 20 billion
• Mexico is eager for China to invest in the
  country
• Currently 5.4 of Mexicos total imports come
  from China

19
Strategic Marketing Plan

• Marketing Objectives
• Business to business marketing with Comercial
  Mexicana
• Eventually expand to subsidiaries
• Target environmentally conscious consumers

20
Promotion Campaign

• Co-Finance campaign with Comercial Mexicana
• Inform public about consumer shopping habits in
  Mexico
• Advertisements will display the problem and offer
  consumers a solution Corn-T bags from Comercial
  Mexicana

21
Promotion

• Involvement with Pronatura
• Largest environmentalist group in Mexico
• Lobby for new law regarding standard plastic bags
  in Mexico

22
Distribution

• From the Port of Shanghai in China and the Port
  of Acapulco in Mexico
• shipments by truck from Chengdu to Chongqing
• Shipment then placed on a train to go 890 miles
  to the Port of Shanghai
• In Shanghai products will be placed on a ship to
  the Port of Acapulco in Mexico
• Then shipment will be placed on a railway to go
  190 miles north to Mexico City

23
Alternative Distribution

• Price of petroleum falling
• Fly our product from the Chengdu directly to
  Mexico City
• This would create less channels of distribution
• Cut down on delivery times
• If the price of oil per barrel reaches 180 or
  more we would return back to our original plan

24
Documentation

• We would create a contract with the organization
  that lays out the logistics of all of our sale
  activities
• Corn-T would be responsible for insuring and
  paying for transportation from our Chengdu to the
  Port of Shanghai
• Once on the ship payment and insurance would be
  covered by Comercial Mexicana

25
Documentation

• Corn-T expects to be paid 50 of the total cost
  of the products before shipment
• Second half of the payment installment would need
  to be received 15 days after Comercial Mexicana

26
Documentation

• Consular invoice
• Shippers export declaration
• Export packing list
• Bill of Lading
• Sign a six month contract with Comercial Mexicana
  using these stipulations and then negotiate
  adjustments as we see fit

27
SWOT Analysis Strengths

• Technology
• Product Line
• Reputable Image
• Strong Organizational Culture

28
SWOT Analysis Weaknesses

• Lack of materials
• First Time Investing in Mexico

29
SWOT Analysis Opportunities

• Unlimited opportunities for growth
• Comercial Mexicana and partners
• Costco Opportunity to wholesale to private
  grocery store owners and other small businesses
• Pronatura
• Expanding foreign investment to include more of
  Latin America

30
SWOT Analysis Threats

• All contracts, documentations, and regulations
  are looked at strictly
• Protect our product and the technological
  advantage
• Increase research and development
• Look closely at our competition
• Local competition could arise, have the home
  advantage
• Need to make our presence known in Mexico

31
SWOT Analysis Threats

• Transportation issues
• petroleum is low enough now.
• must monitor it closely to ensure profitability
• Searching into alternative transportation methods
  
• Look into alternative fuels for the future of
  transportation

32
Conclusion

• Considering all factors, we see success for
  Corn-T in Mexico
• Our proposal will prove to be beneficial for
• Corn-T
• Comercial Mexicana partners
• The environment and communities of Mexico