THE MINISTRY OF FINANCE

UNIVERSITY OF FINANCE – MARKETING

FACULTY OF MARKETING

----------

Class: CLC_19DMA04
Course code: 2031702031204

FINAL REPORT
INTERNATIONAL MARKETING PLAN
FOR WHITE CLAW ENTRY INTO
CHINA MARKET

Major: MARKETING
Specialized: INTERNATIONAL MARKETING
 Ho Chi Minh city, 2021

THE MINISTRY OF FINANCE

UNIVERSITY OF FINANCE – MARKETING

FACULTY OF MARKETING

----------

Class: CLC_19DMA04
Course code: 2031702031204

FINAL REPORT
INTERNATIONAL MARKETING PLAN
FOR WHITE CLAW ENTRY INTO
CHINA MARKET

Ho Chi Minh city, 2021

 CONTENTS

CONTENTS ................................................................................................................................ i
List of Figures ............................................................................................................................ iv
List of Tables ............................................................................................................................. iv

Executive Summary .................................................................................................................... v

1. Introduction ............................................................................................................................ 6

2. Situation analysis .................................................................................................................... 6

2.1. Company analysis ................................................................................................................ 6

2.2. Internal environment............................................................................................................ 6

2.3. External environment .......................................................................................................... 7

2.3.1. Sociocultural distance ....................................................................................................... 7

2.3.2. Market analysis ................................................................................................................. 7

2.3.3. Trade barriers .................................................................................................................... 8

2.4. Customer environment ........................................................................................................ 9

2.5. Entry mode ........................................................................................................................ 10

3. Analysis of the Internal Environment................................................................................... 10

3.1. White Claw Business model .............................................................................................. 10

3.2. Assessment of a firm’s resources ...................................................................................... 10

3.3. Review of a firm’s current international marketing mix ................................................... 11

3.3.1. Appealing to its fans’ tastes ............................................................................................ 11

3.3.2. Viral Marketing .............................................................................................................. 11

3.3.3. Standing Apart ................................................................................................................ 11

3.3.4. Assessment of the image of the White Claw .................................................................. 11

4. Analysis of the External Environment.................................................................................. 11
4.1. Macro-environment ........................................................................................................... 11

4.1.1. Political/Legal forces ...................................................................................................... 12

4.1.2. Economic factors ............................................................................................................ 12
i
4.1.3. Socio-Cultural forces ...................................................................................................... 13
4.1.4. Technological forces....................................................................................................... 13

4.1.5. Environmental forces ...................................................................................................... 13

4.2. Micro Environment ........................................................................................................... 13

4.2.1. Industry-level Competitive Advantage ........................................................................... 13

4.2.2. Competitors .................................................................................................................... 15

5. SWOT Analysis .................................................................................................................... 16

6. Target Market Description ................................................................................................... 17

6.1. Segment Strategy ............................................................................................................... 17

6.2. Targeting Strategy ............................................................................................................. 17
6.3. Positioning Strategy........................................................................................................... 18
7. International Marketing Goals and Objectives ..................................................................... 19
8. Marketing Program ............................................................................................................... 19

8.1. Product Strategy ................................................................................................................ 19

8.1.1. Product mix management ............................................................................................... 19

8.1.2. Product Matrix ................................................................................................................ 21

8.1.3. Building powerful international brands .......................................................................... 22

8.1.4. Contingency approach .................................................................................................... 23

8.1.5. Global innovation ........................................................................................................... 23

8.2. Pricing Strategy ................................................................................................................. 23

8.2.1. Pricing Objectives .......................................................................................................... 24

8.2.2. Pricing strategy ............................................................................................................... 24

8.2.3. Pricing discounts ............................................................................................................ 25

8.3. Place: Distribution Strategy ............................................................................................... 25

8.3.1. Distribution Intensity ...................................................................................................... 25

8.3.2. Selection of distribution channels................................................................................... 26

8.3.3. Managing international distribution channels ................................................................ 27

8.4. Promotion: Integrated Marketing Communications Strategy ............................................ 27

ii
8.4.1. International IMC objectives .......................................................................................... 27
8.4.2. Approach ........................................................................................................................ 28

8.4.3. Promotional Mix and IMC Tools ................................................................................... 29

8.4.4. Advertising ..................................................................................................................... 29

8.4.5. Social media ................................................................................................................... 30

8.4.6. Sales Promotion .............................................................................................................. 31

8.4.7. Public Relations .............................................................................................................. 31

9. EVALUATION, MEASUREMENT, AND CONTROL ..................................................... 33

9.1. Action plan ........................................................................................................................ 33

9.2. Control for Implementation of Recommendations ............................................................ 37
10. Conclusion .......................................................................................................................... 38
References .................................................................................................................................. a
Appendix .................................................................................................................................... b

Appendix 1: Administrative licensing system ............................................................................ b

Appendix 2: Financial paper ...................................................................................................... c

Break-even analysis .................................................................................................................... c

Expected profit ........................................................................................................................... c

Appendix 3: Expense budget ...................................................................................................... d

Appendix 4: Member’s group work assessment....................... Error! Bookmark not defined.

iii
 LIST OF FIGURES

Figure 1: GNI per capita - China .............................................................................................. 12

Figure 2: Conceptual map for hard seltzer markets .................................................................. 18

Figure 3: Product line and mix of White Claw ......................................................................... 20

Figure 4: Packaging of White Claw in China ........................................................................... 21

Figure 5: Change in advertising expenditure in China from 2012 to 2019 with forecasts until
2021 .......................................................................................................................................... 29

Figure 6 Budget for promotion activities of the first year .......................................................... d

LIST OF TABLES

Table 1: Porter’s five forces model .......................................................................................... 14

Table 2: White Claw's direct competitors ................................................................................ 15

Table 3: SWOT analysis ........................................................................................................... 16

Table 4: Ansoff’s product market expansion matrix ................................................................ 21

Table 5: Analyze competitor price ........................................................................................... 24

Table 6: Timeline summarizing marketing activities 2022 ...................................................... 36

iv
 EXECUTIVE SUMMARY

The purpose of this report is to provide an international marketing plan for White Claw
to enter the Chinese market. White Claw Hard Seltzer is an alcoholic seltzer water beverage
with, gluten-free alcohol base, and a hint of fruit flavor. The company has launched quite
successfully in the US and European countries, so after nearly 6 years of launch, we decided to
penetrate the Asian market, first in China. We first conducted a SWOT analysis that showed
that the advantage is the products that we provide are expected to be very suitable to the tastes
of the target customers. Regarding entry mode, White Claw entered China's hard recruiting
machine market through a joint venture - China Resources Beer (JV). In terms of target
customers, young people aged 18-24, who pursue new things and are willing to explore different
experiences. Therefore, according to the positioning map, White Claw will position itself at a
lower price than other brands to gain a competitive advantage as well as be suitable for the
company's target segment. We performed an analysis of product strategy, pricing strategy,
distribution strategy, and promotion strategy to complete this marketing plan. First, combining
standardization and adaptation is a suitable market penetration method for White Claw. We will
change the partial packaging to comply with Chinese laws and add flavor to a product line.
Next, we decided on the Penetration Pricing strategy. The goal of applying penetration pricing
is to attract and increase market share. Thirdly, White Claw uses intensive distribution in China
markets. Using a vertical marketing system and international strategic alliances, they will work
with China Resources Beer (Holdings) Company Limited to form an alliance to compete in the
hard seltzer market in China. Finally, our promotion strategy will harness the best Integrated
Marketing Communications model to find out which communications activities work best for
each promotion objective. We will make communication activities dependent on social
networks more than traditional advertising.

Marketing goal: 30% of brand awareness will be achieved. Gross the financial goals are
to achieve the company's first-year revenue of 3,900,000 CNY. To achieve the desired, we
implement rigorous performance controls including Salesforce, Delivery efficiency,
Advertising efficiency, and Effective sales promotion.

v
1. INTRODUCTION

The craze seemed to have ramped up in early 2018 with White Claw trending on the scene
first. The trend was quickly followed by big brands such as Anheuser Busch with Bud Light
Seltzer, Truly from Boston Beer, Corona Hard Seltzer, and many more. With hard seltzers
continuing to gain solid market share, crossing over $100m in sales for the 10th week in a row
(Greg, 2020). More and more breweries are starting to shift their strategy to making hard
seltzers to help meet the growing demographic of drinkers that are looking for something
different. We've heard first hand from brewers who've lamented at first when thinking about
testing the waters with hard seltzers, but sales have shown that it's a win/win for consumers and
local breweries in trying to regain consumer interest in a COVID world.

2. SITUATION ANALYSIS

2.1. Company analysis

Mark Anthony Brands International is a member of the Mark Anthony Group of

Companies, one of North America’s largest privately-owned alcohol beverage businesses. Led
by Davin Nugent, Mark Anthony Brands International was established in Dublin in 2014. Mark
Anthony Brands International; an alcohol beverage business of distinction, creating and
developing a diverse portfolio of category defining brands across ready-to-drink and premium
craft spirits. A member of the Mark Anthony group of companies, Mark Anthony Brands
International is located in Dublin, Ireland.

2.2. Internal environment

Mark Anthony Group in the US, run by Vancouverite Anthony von Mandl and also
known for producing Mike's Hard Lemonade. Mark Anthony Brands Inc. is located in Chicago,
IL, the United States and is part of the Advertising, Public Relations, and Related Services
Industry. Mark Anthony Brands Inc. has 210 total employees across all of its locations and
generates $101.03 million in sales (USD). Regarding popularity, White Claw is well known in
the hard seltzer market. White Claw in America is always at the top of the most famous Hard
Seltzer brands. This will probably make a big splash before entering the market if there are
effective marketing strategies. White claw has been very successful in the US market and has
experience penetrating other markets as well, so may have accumulated experience when

6
attacking other markets. The proof is that the brand is now available in Austria, Belgium,
Finland, Germany, Switzerland, and Sweden.

2.3. External environment

2.3.1. Sociocultural distance

Chinese society is all about the group, while Americans celebrate the individual. In
Chinese drinking culture, the taste of the liquor or wine isn’t so important as the people
involved. When it comes to some social events, the Chinese care more about who they drink
with, no matter for business meetings, family, or celebrations. This phenomenon also indicates
the collectivistic culture in China. For western people, the taste of the actual drink means a lot
to them, as they are more concerned about an individual’s feelings. Moreover, for some
westerners, wine-tasting is an enjoyable moment, which plays an important role in their life.

Chinese people are inclined to foster deeper friendships than Americans. They may see
Americans as initially gregarious but difficult to get to know in a deeper context. A friend in
China is someone to whom you feel deeply obligated and for whom you will do favors when
necessary. This translates into business, where the Chinese will try to forge relationships and
connections, known as guanxi. Trust is essential before doing business. Colleagues tend to
socialize together as part of relationship building and business entertainment is lavish.
Americans, on the other hand, tend to keep work and personal life separate.

2.3.2. Market analysis

Market size

According to the "Market Prospects and Status Quo Analysis of Low-alcohol Drink
Industry 2020" issued by Academia Sinica, the market size of China's domestic fruit wine
industry in 2019 was approximately 231.5 billion yuan (US$36.28 billion). Although still a
small share compared to the rest of the beverage industry, it has grown by more than 50% year-
over-year.

Market growth

The market for low alcohol beverages like Hard Soda or Hard seltzer is one of the niches
compared to wine and beer. But its development potential in the future will hopefully meet the
needs of consumers. According to the analysis of the market outlook and current situation of
the low-end wine industry 2020 published by the China Research Institute, the market size of
7
the domestic fruit wine industry in 2019 is about 231.5 billion yuan. In the past two years,
China's low alcohol market has grown by more than 50%, low alcohol has grown by more than
80%.

The market potential for Hard Seltzer products

According Grand View Research China is one of the regional prospects in Hard Seltzer
Market Size, Share & Trends. Hard seltzer, as one of the sub-categories of low-alcohol
beverages, is still in its early stages in China, with significant commercial potential. As a low-
sugar, fat-free, and low-alcohol alcoholic beverage, its low-sugar, fat-free, and low-alcohol
ingredients cater to the younger generation's desire for a "lighter" lifestyle and are attracting an
increasing number of individuals with increased consumption.

2.3.3. Trade barriers

Despite growing commercial ties, the bilateral economic relationship has become
increasingly complex and often fraught with tension. From the U.S. perspective, many trade
tensions stem from China's incomplete transition to a free-market economy. While China has
significantly liberalized its economic and trade regimes over the past three decades, it continues
to maintain (or has recently imposed) several state-directed policies that appear to distort trade
and investment flows.

The Trump Administration has pledged to take a more aggressive stance to reduce U.S.
bilateral trade deficits, enforce U.S. trade laws and agreements, and promote "free and fair
trade," including concerning China. These tit-for-tat actions threaten to sharply reduce U.S-
China commercial ties, disrupt global supply chains, raise import prices for U.S. consumers and
importers of Chinese inputs, and diminish economic growth in the United States and abroad.

8
2.4. Customer environment

Current customer: Young people in China, many of them are women

and have high and have high disposable income.
1. Who
Potential customer: In the future, we hope that among young to middle-
aged (21 to 44) from affluent areas and it appeals to both genders equally.
- Young people in China love to keep up with trends and are interested in
healthy living. Many of them are women, they look for alcoholic drinks
but healthier than beer and Hard seltzer as an alternative, while still
allowing them to drink and socialize with their friends.
- About potential customers: The growth of the vast healthcare market
reflects that more than ever, consumers are prioritizing their lifestyles
and taking control of their health. And at any age or gender, everyone
2. Why is interested in health and maintaining a healthy lifestyle.
- These products are expected to be one of the favorite choices among
people who prefer to drink alcoholic beverages while restricting their
carbohydrate or calorie intake. Drinking less alcohol is an important
choice for young consumers.
- Hard Seltzer is a lower-calorie alternative to many other sweet-flavored
drinks. This makes them a great beverage option for those who prefer
low-carb.
- Customers may be like the taste of high alcohol wines.
3. Why not - They are not aware of health issues but how many calories or how much
sugar is ingested can be when enjoying heavy beers or alcohol.
- Customers enjoy Hard seltzer at parties and even meals at home.
- Thanks to its convenience (pre-mixed and canned drinks), it is perfect
for parties, festivals, or the beach. It can completely replace carrying
around heavy bottles of vodka and glass mixers and leaving your glasses
4. What
at home because you can drink spirits straight from the can.
- During this COVID-crisis, the demand for drinks ‘on the go’ has rapidly
increased. Consumers are looking for drinks that are easy to get, prepare
and consume.
5. Where - In restaurants, shops near your home, supermarkets, etc.
6. When - When they need a low alcohol drink for parties or festivals

9
2.5. Entry mode

According to Ansoff’s product-market expansion matrix, White Claw can apply a market-
development strategy as White Claw expands its existing product in the new market in China.
White Claw enter China’s hard seltzer market through a joint venture (JV). White Claw will
join a business with a Chinese partner. Chinese JV partner will help the company to develop
local knowledge and Chinese culture faster and easier. White Claw can share profit and loss
with its partner. However, managerial management must communicate well to avoid conflict in
the future.

3. ANALYSIS OF THE INTERNAL ENVIRONMENT

3.1. White Claw Business model

White Claw generates revenues by selling products through distributors to retail stores.
The product is positioned in a uniquely unremarkable way; the name and the wave logo are
neutral from a customer segment perspective. This has allowed it to appeal to a wide audience.
This has led social media content creators to eagerly rush in to fill the gap with memes and
videos; this provides the company with free marketing tailored to a likely target customer
demographic.

3.2. Assessment of a firm’s resources

DEC 2020 HKD USD China Resources Beer, the company

Revenue 35,337.90M
which will now sell White Claw in China is
Gross Profit 13,496.68M
a state-owned major beverage maker and a
Operating income 2,414.81M
Income before tax 3,381.19M core subsidiary of China Resources
Net income 2,353.01M (Holdings). China Resources beer's
EBITDA 4,376.78M business is well known for its "Snow"
Diluted EPS 0.72 beverage, accounting for about 20% of the
Dividends Per Share 0.30
Chinese beer market. The company has a
Total Assets 51,901.40M
strong distribution throughout all channels
Total liabilities 24,713.48M
Total equity 25,155.72M in China and Drinks and More has already
Operating cash flow 5,124.04M proven to be successful with other brands.

10
3.3. Review of a firm’s current international marketing mix

3.3.1. Appealing to its fans’ tastes

Listening is important, very important indeed. The company tapped into its internet fans
and selected these flavors based on 70,000 requests from social media. Paying attention to the
preferences of your fans who reach out can go a long way. Positive word of mouth has been the
strongest marketing advantage for White Claw.

3.3.2. Viral Marketing

White Claw’s success can be attributed to the free social media marketing it received in
the summer of 2019. After comedian Trevor Wallace’s skit on the drink, the internet exploded
with memes that popularized the drink. Everything from the college “bro” demographic it
attracted to sayings like “Claw is the Law” reinforced the popularity of the drink, leading to a
nationwide shortage.

3.3.3. Standing Apart

White Claw receives 171,000,000 search volumes in Google, 12 times the search volume
of “SpikedSeltzer” (307,000 results) and “hard seltzer” (13,400,000 results) combined. The
brand’s greatest strength is that they seem to have the ability to read the market well and the
willingness to devote resources to the best of what they do.

3.3.4. Assessment of the image of the White Claw

Despite the fact the product has not been available in China up until now, it has well and
truly earned its place in popular culture and is the market leader globally in this exciting new
category. Perhaps is a "natural fit" for the company's range of beverages as it taps into the low
calorie and low sugar trends.

4. ANALYSIS OF THE EXTERNAL ENVIRONMENT

4.1. Macro-environment

The PESTLE technique is used to assess the external environment. The analysis of these
elements will provide a better picture of an organization's external environment from all angles,
as well as a prognosis of potential risks and possibilities in the market.

11
4.1.1. Political/Legal forces

First, the political situation in China has been stable, with the Chinese Communist Party
(CCP) firmly in power. In 2020, the Chinese government reinforced its official political rhetoric
and control, both internally and in terms of foreign policy. Weak global demand and strained
foreign relations are expected to intensify calls for economic self-sufficiency emphasizing the
importance of the domestic market (Zhang, 2020). To cushion the economic hit caused by the
COVID-19 outbreak, China’s central and local governments have been rolling out a series of
supporting policies to shore up the confidence of businesses and ease some of their compliance
burdens, besides ensuring steady medical supplies and daily necessities.

Second, China has implemented an administrative licensing system on imported low-

alcohol products (see Appendix 1 for more details). Third, China cooperates in international
trade with major organizations such as WTO, EFTA, EU, ... China is now the EU's second-
biggest trading partner behind the United States and the EU is China's biggest trading partner
(European Commission, 2013). Sino-EU economic and trade relationship has maintained a
good momentum of development.

4.1.2. Economic factors

China is the world's second-largest economy in terms of nominal GDP, with rising
consumer buying power. According to FocusEconomics (2021), the panel foresees GDP
expanding 5.2% in 2022. According to The World Bank (2021), in the past 5 years, the Gross
national income (GNI) in China has also increased continuously from $12,930 to $17,200.
Regarding inflation, the forecast is that consumer price inflation will average 1.6% in 2021,
which is unchanged from last month’s estimate, and 2.3% in 2022 (Focus Economic, 2021).

Figure 1: GNI per capita - China

12
 Besides, China has overtaken the USA to become the top destination for new FDI in the
world. The urbanization factor in China is also assisting the country's economy is becoming
more consumer-friendly, enticing more global companies to invest in the country.

4.1.3. Socio-Cultural forces

China is the world's most populated country, with a population of over 1.4 billion people
(World Meters, 2021). Social and cultural values influence a major percentage of China's
societal trends. According to Global Religious Future (2021), religious variety is seeming a lot
in this country (21.9% Folk Religion,18.3 percent Buddhists, 5.2 percent Christians, and the
rest of other religions). Overall, China leads a social and educated life and keeps its tradition
widely with respect. Thus, it can be concluded that the social factors are very supportive of the
White Claw hard seltzer entry into China.

4.1.4. Technological forces

The rapid development of online shopping had a powerful impact on the life of Chinese
people. More people are willing to shop online due to the convenience of the Internet. In 2019,
the country’s share of online retail sales reached a new high, with more than 20 percent of the
total retail made online. Thanks to the rapid adoption of the internet across China, the
penetration rate of online shopping reached almost 80 percent.

4.1.5. Environmental forces

China is one of the ten most polluted countries on the planet right now (Selectra, 2021).
Thus, many companies must spend more money to ensure that their products meet
environmental requirements. As a result, China's top priority should be eliminating systems that
harm the environment.

4.2. Micro Environment

4.2.1. Industry-level Competitive Advantage

Porter’s five forces model is applied to analyze the hard seltzer industry’s attractiveness
in China. Table 1 suggests that the nature of competition in the hard seltzer industry contributes
to a fast pace movement in China. Hence the hard seltzer industry is considered to be attractive
as the industry is expected to continually grow.

13
 Table 1: Porter’s five forces model

Forces Content

- The Chinese Government's regulations on product brand approval are

still complicated, value-added tax and consumption are still very high
The threat of new (accounting for about 50% of total import costs).
entrants
- Finding a reliable manufacturer partner and building a distribution
channel is very expensive

- Alcoholic beverages are all interchangeable, especially in the Chinese

The threat of market
substitute products
- The cost of switching between different products is very low

- The bargaining power of suppliers is very high due to the

Bargaining power competitiveness of the industry
of supplies - High switching costs because of the difference in the quality of the
supply for the product

- The influence of buyers is high due to fierce competition between

Bargaining power distributors and brands, forcing them to reduce costs.
of consumers
- Low buyer conversions

- The level of competition among competitors is very high, increasing

Rivalry among volatility and fierce competition.
competitors
- Consumers are not easily loyal to the brand

14
4.2.2. Competitors

Table 2: White Claw's direct competitors

Brand RIO BLUE HOUR TOPO CHICO ZEYA
Formed in 2003 BlueHour is a The Coca-Cola Founded in June
by Shanghai hard seltzer Company launched 2020, the
Bacchus Limited brand founded Topo Chico Hard Shanghai
Company which in 2020. Aiming Seltzer in China in company first
is an arm of the to create a June 2021. The introduced six
Introduc Australian -based casual, burden- brand was hard seltzer
tion Bacchus free drinking life introduced in Latin products in China.
Distillery. for young America and Then ZEYA re-
people. Europe before launched with
entering the four flavors
Chinese market. following the
customers
Alcohol
4.5%vol, 84
by 5%vol, 330mL, 3%vol, 330mL, 4.7%vol, 330ml
calories,
Volume

Image
brand

green apple Lemon Flavor, lemon and lime, grapefruit,

flavor, green Grape Flavor, strawberry and cucumber, white
Flavor
orange flavor, Hearts, Peach guava, and colorful peach, passion
strawberry flavor Flavor pineapple fruit
Price 79 Yuan/ 9 cans 78 Yuan/6 cans 77 Yuan/6 cans 121 Yuan/ 6 can

Table 2 details a description of White Claw's direct competitors. White Claw's well-
known competitors are Topo Chico, Blue Hour, Rio, Zeya. In China, smaller independent
companies have started entering the hard seltzer space, instead of big players - the exception
being Anheuser-Busch InBev. Most companies were still testing the market. Because people
do not how it is going to perform in China. White Claw's indirect competitors are coca-cola,
Kang Shifu, Wahaha, Gong cha, Royaltea, Qingling of Tsingtao Beer, Weipao of Jianlibao,
Yiran Milk Mineral of Chinese dairy giant Yili.

15
5. SWOT ANALYSIS

Table 3: SWOT analysis

Strengths Weaknesses

- Will face many obstacles when attacking

- Have experience in penetrating the right
the Asia market - a completely new
market at the right time.
market.
- Was born very early and was the first
- Not have as much experience in the next
Hard Seltzer brand to become a household
contact with the multiform text as in
name when integrating into the lives of
China.
consumers. White Claw is well known in
- Zoning and site selection processes are
the hard seltzer market.
more cumbersome and time-consuming
- Relies on social media brand interaction
than those used by domestic competitors
and responsiveness to people's evolving
- It may be difficult to compete with local
tastes and habits. We interact with the
Hard Seltzer brands like ZEYA, RIO.
literal tastes of consumers, like taste buds.
Last year, the company tapped its online
followers and introduced three new
flavors based on 70,000 survey responses.

Opportunities Threats

- China is a very complex country in many

- China is the world's second-largest
aspects including political, legal, and
economy in terms of nominal GDP, with
socio-cultural factors. Therefore, all
consumer purchasing power growing.
advertising and marketing strategies need
- The availability of cheap labor will
to be adopted when dealing with the
positively affect the company's staffing
Chinese market.
costs. China is positioning itself as a
- Chinese consumers generally prefer
desirable location for foreign direct
buying local brands over foreign
investment because of its low labor costs
competitors in most sectors including
and better infrastructure (FDI).
food and beverages.
- China has the largest online population in
- Hard seltzer is not yet popular in China,
the world (Statista, 2021). Baidu,
so it will cost the company to educate
Alibaba, and Tencent are just a few of the
consumers in this market.
country's tech giants. The largest and
fastest-growing e-commerce market in
the world.

16
6. TARGET MARKET DESCRIPTION

6.1. Segment Strategy

Market segmentation is the inevitable trend of the development of market maturity.

Segments of the market stand from the point of view of consumers in the division. The overall
market of a certain product is divided into several consumer groups, each consumer group is a
market segment.

Due to the low alcohol consumption of fast-moving consumer goods, the average price is
low by 2–10 yuan (0.30–1.50 USD), and China's average annual income per capita is $17,200
(The World Bank, 2020). So, in the national scope, consumers' purchasing abilities are the
same. Tsingtao beer uses many kinds of segmentation methods. The first is the regional
segmentation. Although the national regional consumer purchasing power is similar, different
areas formed different tastes, because of the influence of their eating habits. Through the
investigation, the northern people like the powerful, roundly type of beer; Jiangsu, Shanghai,
and people from the south like the gentle type of taste. Guangdong, Fujian coastal areas are
fond of tasting strong alcohol and acid with a bitter taste. According to this difference, the
company will form different taste characteristics of beer to meet the needs of the consumers.

Secondly, the company does the vertical segmentation in population. With age as
segmentation criteria, different age paragraphs have different demands. Such as young people
like a light beer. At the party, they can have a good time and do not need to worry about getting
drunk. Middle-aged people are fond of tasting a little strong beer. It is to be in a common
business negotiation or with friends and family to get together to drink. In addition, age is
always related to the income level. Usually, age and consumption are proportional to ability.
Thus, the market can be divided into the high-end market and mid-low market.

6.2. Targeting Strategy

White Claw's target consumers are young people aged 18-24 (the Z-generation young
people group), who pursue new things and are willing to explore different experiences. They
are more concerned about body management and physical health. They live in big cities.
Because here we find the biggest demand for our imported hard seltzer. And especially
Shanghai's people have shown a huge appreciation for alcoholic drinks. Here people are more
open-minded to try new beer brands and are wealthier, which means they can spend more on a

17
night out. Besides, it's generally easier to import the White Claw brand into large cities, as many
shipments are coming in and out every day.

6.3. Positioning Strategy

With the boom of Hard Seltzer and the potential of the Chinese market, Hard Seltzer
brands are more and more popular, some typical brands like Topo Chico, RIO, ZEYA, Blue
Hour. As shown in Figure 2, we will price products lower than other brands to match the target
customer segment. In addition, international quality with diverse designs is the strength of
White Claw, going against other brands with higher prices but lower quality than White Claw.

White Claw Hard Seltzer can compete equally with existing brands in the Chinese market
through its strong image, message, and values, promoting the trend of holistic health and
lifestyle of young consumers.

Figure 2: Conceptual map for hard seltzer markets

Positioning Statement

"We create a zero-pressure world by empowering people to unwind and have fun their
way. With a sugar-free blend of soda water, gluten-free alcohol, and unique flavors, White Claw
Hard Seltzer is a great tasting, zero pressure drink you'll feel good about drinking!"

18
7. INTERNATIONAL MARKETING GOALS AND OBJECTIVES

Our marketing objective is to increase brand awareness, sales volume, and market share
of White Claw hard seltzer in China.

In the short run, during the first year, our marketing objective is to sell 50,000 cans of
White Claw and achieve about 30 percent brand awareness. Initially, it is difficult for customers
to recognize the worth of White Claw. Although this brand is quite famous in Europe and is
popular with young people, the Chinese are still confused about hard seltzers. Thus, the sales
volume will not be so high.

In the medium term, during the next half-year, our marketing objective is to sell 600,000
cans and achieve 5 percent to 8 percent profit margins. After experiencing the first half-year,
White Claw will set up an elementary brand image; more and more young people in Shanghai
are getting to know the hard seltzer of White Claw. Thus, during the next year, there will be
more regular customers. Additionally, our marketing strategies will exert significant influence
on the increase of sales volume.

In the long run, our marketing objective in the next five years is to sell 4,000,000 cans.
We are aiming to occupy 10 percent of the market share of China’s hard seltzers. Due to the
augment of sales volume in the first one and two year, we will expand our distribution channel.
For example, the Chinese agent of White Claw will find more retailers to sell White Claw’s
hard seltzers in Shanghai’s stores. All these will help us fulfill the long-term objectives.

8. MARKETING PROGRAM

8.1. Product Strategy

8.1.1. Product mix management

Product lines

White Claw's product lines consist of White Claw Hard Seltzer Surge, White Claw Hard
Seltzer Iced Tea, White Claw Variety Flavor Collection, and White Claw Hard Seltzer. More
specifically, the number of product lines include:

19
 Figure 3: Product line and mix of White Claw
Packaging

Except for the White Claw Variety Flavor Collection, all other lines are unpackaged,
which is a purpose-based product line that meets the needs of customers who want to buy in
bulk. We focused on the packaging of each product, each type has its characteristics and name.
Their common point is that they are all made of paper, shaped according to the trend of
environmental protection. This makes it easy for White Claw customers to choose the desired
product according to their preferences for products of the same or different line. The packaging
could not be more on-trend too – portable, recyclable cans with Instagram-friendly designs set
against a white background.

20
 Figure 4: Packaging of White Claw in China
Labeling

To be able to export through the Chinese market, labeling is a mandatory and extremely
important factor. According to the Food Labeling Standards of China (GB7718-2011), imported
foods like White Claw shall have clear markings that indicate the country of origin, in addition
to the name and address of the general distributor registered in the country.

Obtaining the CCC mark, White Claw needs to be done through an application process
with authorized Chinese certification bodies. At present, six foreign testing organizations have
been designated to test certain categories of products to CCC mark GB standards. The
application process can take several months or more and can cost upward of $4,500 in fees, in
addition to inspectors’ travel costs.

8.1.2. Product Matrix

A useful tool for conceptualizing the various strategies is the market/product matrix. As
shown, the matrix is divided into four possibilities: Market Penetration, Product Development,
Market Development, and Diversification.

Table 4: Ansoff’s product market expansion matrix

MARKET

Existing New
PRODUCT
Existing Market Penetration Market Development

New Product Development Diversification

21
 The above four strategies each have their characteristics, but the most suitable strategy
right now for White Claw Hard Seltzer is the market development strategy. With the
development potential of the product, it has been successful in many markets such as the US
and is looking for a market that helps to grow product sales like China.

8.1.3. Building powerful international brands

With a new market like China, it is not yet possible for consumers to know about White
Claw, harder than the hard seltzer industry in alcoholic beverages, which is still an emerging
and growing trend.

Brand awareness

White Claw needs to promote its own brand identity to customers. In the Chinese market,
White Claw's target customers are Gen Z and millennials, so branding in the eyes of young
consumers should be a top priority. Updating the trends and lifestyles of customers to be able
to offer a good brand identity method in the eyes of consumers of White Claw. China is a
country with strong development in technology, especially social networking, and e-commerce,
White Claw uses the media to promote this strength, affirm its image, mission, vision, and
competitive values of White Claw are widely known to customers over a long period. During
that time, White Claw needs to correct if the brand has weaknesses or misunderstandings in the
process of building a brand identity with consumers. Because White Claw's brand identity is
global and rarely changeable like the logo. This is the process of marketing efforts that place
the brand in a consumer's mind. Instilling brand awareness begins with creating simple
recognition. Brand awareness in global markets helps create marketing success.

Brand image

Brand image plays an important role in sales. White Claw wants customers to be able to
perceive the image in potential customers as based on the values for the spirit of freedom and
rebellion, self-expression, and creativity.

Brand loyalty

Making White Claw a loyal brand in the minds of Chinese customers is quite difficult.
The disloyalty to any brand, not only Gen Z but also a third of millennials, is due to the effects
of trends, especially online shopping by the celebrity movement, KOL. Therefore, White Claw
not only focuses on strengthening the brand through product quality but also building our

22
sympathy, trust, and interest in the brand through loyalty programs. For China, the products of
each industry are already numerous, so it is very necessary to create a point through White
Claw's own value and services in the Chinese market.

8.1.4. Contingency approach

With the need and desire to receive more and more foreign products from the target
customers in China, product standardization is a good choice because it has many advantages
such as lower production costs, less cost, save time, bigger sales volume, bigger profits, easier
production, and inventory control. However, for White Claw not to be eliminated from the
potential market and compete with other competitors in the alcoholic beverage industry, it is
extremely necessary to adjust to the tastes of customers. The Chinese are often interested in
products that have a unique style but still fit their culture in each product. Besides, the Hard
Seltzer product is a nondurable commodity that is less likely to be standardized, an adaptive
approach would be more appropriate. Therefore, the contingency approach or combining
standardization and adaptation is a suitable market penetration method for White Claw
preparing to expand the market in China.

8.1.5. Global innovation

For White Claw to be able to meet the unique needs and tastes of Chinese customers,
product innovation is the decisive factor that makes customers interested in White Claw
products.

White Claw can add flavors to a product line, an addition to protect a brand in a product
portfolio from competitors or fill a taste gap in the product line. It is quite common for
multinational companies to have different product lines in each country.

8.2. Pricing Strategy

The pricing factor plays a significant role in the determination of the way the organization
can position its product in the market. The pricing strategy is pivotal in enabling the
organizations to manage to reach the different customer segments in the market.

Especially the aspect of customer value has a big influence in China. More in detail it
means that the perceived customer value immensely affects the pricing strategies in China. First
of all, that is, because in China prices may convey a meaning. The number 8 (bā) is highly

23
favored in pricing as well. It has a similar pronunciation with the word for 'fortune' or 'wealth'
(fā).

8.2.1. Pricing Objectives

- Revenue maximization
- Penetrate new markets
- Increase sales volume
- Generate interest around new products
8.2.2. Pricing strategy

Penetration pricing—used to gain entry into Hard Seltzer markets in China. The objective
of employing penetration pricing is to attract and grow market share. Once desired levels for
these objectives are reached, product prices will increase. Penetration prices will not garner the
profit that we may want; therefore, this pricing strategy must be used strategically.

Table 5: Analyze competitor price

Brand RIO BLUE HOUR TOPO CHICO ZEYA

Price 79 Yuan/ 9 cans 78 Yuan/6 cans 77 Yuan/6 cans 121 Yuan/ 6 cans

Our market research indicates that the price range for competitors' mustards is CNY 77
to CNY 121 for a pack of six. Since numerous hard seltzers are already available and White
Claw is new to the hard seltzer market, we decide to use penetration pricing to entice customers
to purchase our product. Therefore, we price our White Claw at CNY 76 for a pack of six for
the first year, then CNY 78 for a pack of six. Because it covers our cost of production yet is
lower than what we believe is a good price for our product and is below the lower end of the
market range, which will entice people to purchase our White Claw over the other higher-priced
hard seltzers. Then to pull it off, we need to quickly build loyalty in our customer base and
establish strong relationships before increasing our price.

At each stage in the sales cycle, there are different prices and markups that are charged.
The Price to Wholesaler, or PTW, is the amount the brewery charges to the wholesaler. The
Price to Retailer, or PTR, is the price the wholesaler charges to the retailer. Lastly, the Price to
Consumer, or PTC, is the amount charged to the consumer. This is the amount listed on the
store shelf for your beer.

24
 PTW = 149 CNY for

PTR = 213 CNY for

PTC = 76 CNY for a six-pack

Prices work in the China market

The price of the White Claw hard seltzer on the shelf at the retail account is 67 CNY for
a six-pack.

White Claw charges the wholesaler 149 CNY for a case of beer (24 cans). The wholesaler
needs to make, for example, a 30% margin when they sell it to the retailer. To get a 30% margin,
the wholesaler then charges the retailer 213 CNY for the beer.

The math: 213 CNY minus 149 CNY = 64 CNY Margin for the wholesaler. 64 CNY
divided by 213 CYN = 30.05% Margin percentage.

Continuing the example, let's say the retailer also needs to make 30% on the beer. Since
they will sell it in six packs, they markup the beer and charge the customer 76 CNY per six-
pack.

The math: 4 six-packs times 76 CNY = 304 CNY total sales to consumers for the case of
beer. 304 CNY minus 213 CNY cost of hard seltzers = 91 CNY margin. 91 CNY margin
divided by 304 CNY sales price = 29.9% margin percentage.

8.2.3. Pricing discounts

White Claw applies price-off, bonus pack promotion at official stores, retail, and on e-
commerce, to speed up the process of reaching customers and increase brand awareness when
just entering the market in China.

Quantity discount: The price per unit declines as the volume of purchase rises.

Channel discount: Promotion for flash sale program and freeship for each cart during the
Tet holiday.

8.3. Place: Distribution Strategy

8.3.1. Distribution Intensity

Strategic distribution intensity choices rely primarily on the factors of price, quality, and
competition. In international markets, the same basic approaches are viable, depending on the

25
infrastructure of the host country and any mitigating factors, such as legal restrictions on
imports. White Claw uses intensive distribution in China markets. Marketing efforts focus on
making the product widely available. Because the items are low-price products that retailers
sell with relatively high volume.

8.3.2. Selection of distribution channels

The distribution channel is mainly indirect; beer produced from the factory will go in the
order from the producer to the distribution intermediary and then to the consumer. In particular,
White Claw applies to many different distribution intermediaries. Working with a distributor is
often viewed as a quick and easy way to start selling in China. However, White Claw has
difficulty assessing the true capabilities of individual distributors and our suitability as a partner
in China.

Wholesalers

The wholesalers provide the natural human network of marketing forces, and also provide
value-added services such as dispute settlement, financing for cash tight retailers, etc. At
present, the wholesalers in China serve as an indispensable link of one company's sales channel
and must be integrated into marketing.

Retail Channels

Gen Z consumers in China are more used to omnichannel shopping experiences compared
to Gen Z in other countries. In response to this demand for an omnichannel consumer
experience, White Claw needs to distribute hard seltzers both on-trade and off-trade. In China,
clubs and bars are becoming good leverage to reach the younger consumers as about ¼ of 18-
24 years old consumers and nearly 1/5 of 25-34 years old consumers enjoy these venues for
consuming especially new and appealing kinds of alcoholic beverages. Thus, we will launch
hard seltzer at bars and restaurants such as The Camel, The Rooster, Zapfler, and Grand Yard
which will help raise awareness of hard seltzers in China.

In the next few years, White Claw will convert over to D2C, mainly through its WeChat
official store, which makes up about 70% of its sales. On-trade accounts for the other 30%. In
the first year, White Claw is focusing on expanding its e-commerce presence and getting into
off-trade, primarily supermarkets and grocery stores.

26
8.3.3. Managing international distribution channels

International channel strategies

White Claw uses both push and pull strategies. Push strategies can assist in overcoming
intermediary resistance to foreign products. Discounts, training programs, and other methods
entice the wholesaler or retailer to order in greater quantities, thereby pushing White Claw hard
seltzers through the channel to the consumer. Pull strategies increase consumer demand, which
leads others in the marketing channel to carry additional stock because customers are asking
for the product. White Claw concentrates on stimulating consumer demand through extensive
advertising and consumer promotions.

Intermediary arrangement

The second strategic choice is whether to use traditional intermediaries or create an in-
house distribution channel. White Claw uses vertical marketing systems and international
strategic alliances. A vertical marketing system distribution arrangement involves the producer,
wholesaler, and retailer performing marketing activities as a unified system. By utilizing
international strategic alliances in a distribution channel, White Claw establishes a more
effective means of ultimate product delivery. As firms continue to search for long-term
relationships with international channel members, international strategic alliances continue to
grow in usage. White Claw will partner with China Resources Beer (Holdings) Company
Limited to form an alliance aimed at competing in the hard seltzer market in China.

Channel partners

White Claw entered into a contractual channel agreement with COFCO for an exclusive
hard seltzer distribution arrangement for the China marketplace. Regarding the volume of
distributed wine, COFCO is the Chinese Food and beverage Giant which is the leader in China.
COFCO uses a logistics company called C & D for the bulk of its imports into China.

8.4. Promotion: Integrated Marketing Communications Strategy

8.4.1. International IMC objectives

1. Create brand and product awareness, 30% increase in brand awareness, and 25%
product awareness.
2. Build or improve a brand’s image.

27
 3. Increase sales/market share achieved 3,900,000 sales, and 10% market share of low
alcoholic beverages in China.
4. Provide information. Hard Seltzer drinks are not popular in the Chinese market.
Therefore, we aim to provide our customers with more information about the Hard Seltzer so
that they can distinguish it from other low alcoholic beverages.
8.4.2. Approach

Target audience

Our target customers are over the legal purchasing age (LPA) for alcohol. Specifically, in
China, the legal age to use alcoholic beverages is over 18 years old. Besides, our products are
aimed at everyone, both men and women, there is no difference between genders when they are
always aiming for health values. We are dedicated to responsible marketing. Responsible
marketing is foundational to our company and is a critical aspect of building and maintaining
our reputation, brands, and business. Through our Responsible Alcohol Marketing Policy, we
aim to: (i) Ensure that our marketing does not target or appeal to people under the LPA. (ii)
Tend to responsible consumption.

Messages

“White Claw is for everyone, not just anyone.” We will ignite a wellness culture that
promotes holistic health and lifestyles among young consumers of all genders. They have a
good time and experience with family and friends.

Promotion strategy

Our strategy promotion will exploit the most optimized Integrated Marketing
Communication model to find out which communication activities work best for each
promotion objective. An IMC program can accomplish more than one objective at a time, so
long as this does not create confusion for target audiences.

We will make communication activities dependent more on social media than traditional
advertising. Because launching a heavy paid media game presents White Claw threats on
multiple fronts. Specifically, the "White Claw is for everyone, not just anyone" strategy aims
to maintain outstanding qualities and will work best through word of mouth on social networks
(Buzz marketing). Any content developed for White Claw will disrupt traditional beer
advertising and resonate with consumers both online and offline.

28
8.4.3. Promotional Mix and IMC Tools

While traditional printing and broadcasting advertising channels have been generally
shrinking, outdoor and online ads have been experiencing exponential growth. This can be
explained by better access to mobile and growing internet penetration in the country.

Figure 5: Change in advertising expenditure in China from 2012 to 2019 with

forecasts until 2021
8.4.4. Advertising

Concerning media, including programming, print media, we will not advertise when there
is more than 20% of the audience under the LPA. We will ensure that we do not place billboards,
mail signs, kiosks, etc. on any outdoor permanent location less than 200 meters from a primary
or secondary school.

Advertising agency

We selected an external advertising agency. Since the in-house agency has no experience
in Asian markets, especially a market with diverse and rich cultures like China, choosing an
agency in China will minimize the risks of communication. Completing the entire advertising
program or retaining boutique agencies for certain activities, including:

- Conducting market research: The effectiveness of social media channels, but Weibo,
WeChat are the preferences of target customers on e-commerce platforms such as TMall or
Baidu such as website visits, searches, purchase related products, etc.

29
 - Writing copy: Write content on the official website such as introducing information
about the company and products. In addition, promotional posts are running on social media,
and minigame contests.
- Printing the commercial or advertisement: Design billboards, kiosks, mall signs, or
posters on the street to increase awareness.
Oversee the advertising program

We decided to choose Topkee Media to cooperate exclusively in White Claw's advertising

activities. Because Topkee has the advantage of using digital technology and good monitoring
of social media and other comprehensive network marketing services. That is very consistent
with White Claw's advertising orientation in the Chinese market, helping us to enter the market
most effectively.

We will put together a brief (Topkee guide to the advertising process), the brief includes
objective, budget, key message, the target audience to reach, legislation, media need to run ads,
etc. The brief board plays a role in the connection between White Claw and the advertising
agency Topkee Media, helping to make the progress following the process of White Claw.

Assess advertising effectiveness

International advertisements are presented in a pulsating format. To monitor most closely,

we will run ads throughout the year but strongly on major holidays will be decisive. The
pulsating format will be evaluated in two areas: attitudinal effects and behavioral effects.

Developing the desired perception of position, brand loyalty, and brand equity normally
takes more time, especially when a company enters China.

8.4.5. Social media

We focus on Buzz marketing strategy on social media by creating viral hashtags, add
testimonials from prior attendees, social media buttons to make registration easy to share via
social media. Positive word of mouth has been the strongest marketing advantage for White
Claw. In 2019, the social media ad revenue in China reached 65 billion yuan, up from 51 billion
yuan in the previous year. WeChat, Qzone, and Sina Weibo are currently the largest social
media platforms in China. There are also social networks RED, Douyin (the Chinese Tik Tok),
QQ (by Tencent).

Messages about breaking gender stereotypes when enjoying alcoholic beverages, for
example, in the summer of 2019 when Trevor Wallace released a video popularizing the phrase

30
“ain’t no laws when you are drinking Claws.” After that, the brand became the unofficial party
drink of Americans and created a huge buzz around the brand trending online.

Create a Quality Chinese Website for the China Market

We will change the design of our official website to match the Chinese culture as much
as possible, which will make the user experience on your website better. Most importantly,
designs require 18 years of age before they can access White Claw's website in China. We will
use a range of technologies available to prevent access by people younger than the LPA,
including Age determination: an age confirmation mechanism to check if a user is above the
LPA is not. If a person is under the LPA, they are locked out or directed to a website in that
country that focuses on responsible consumption.

8.4.6. Sales Promotion

With the Push strategy, the company will promote a product to intermediaries, giving
them many incentives to store goods and efforts to promote and sell products to consumers.

Legal issues in consumer promotions

The State Administration for Market Regulation (SAMR) recently released a set of
interim rules to regulate sales promotion activities (SAMR Order No. 32 [2020]). The rules
specify that engaging in premium offers, price promotions, and other sales tactics must be
truthful and accurate and must not deceive or mislead consumers or members of the public. In
addition, there are no other rules regarding promotional activities.

Bonus Pack: Programs such as "buy one pack get one free" are placed on the shelves of
the distribution stores and also the main stores.

Contest and Sweepstake: Offer minigames, especially social media posts to attract more
audiences, especially GenZ.

Price-off Promotion: Offer big discounts during particular periods in a bid to make
volume sales at small profits. Popular periods are New Year’s Eve, the end of the season, or
special festivals or would offer discounts when launching new products.

Coupon: For consumers to collect coupons on e-commerce platforms.

8.4.7. Public Relations

The objective of having a PR presence:

31
 (i) Improve reputation both broadly and within specialized communities.
(ii) Improve your image by disseminating positive messages.
(iii) Control and manage reputation.

Chinese Key Opinion Leaders and Social media

We will choose KOLs over Influencers because KOLs in China usually maintain their
main occupations, such as journalists, entrepreneurs, etc. As a result, KOLs creators exhibit a
higher level of authenticity than influencers. The KOLs that we choose will be Nutritionists or
bodybuilders who are knowledgeable about healthy lifestyles and nutritional values to protect
health and of course include both men and women. so that they can convey the main message
of this campaign. In addition, we will not sponsor KOLs whose audience is mainly LPA people.
Selected KOLs will be made aware of our Responsible Alcohol Marketing Policy and we will
require any sponsored social media posts or content to comply with this policy.

The participation of Key Opinion Leaders (KOLs) as a third party validates the message
of our PR campaign. That way, they will share their experience of using White Claw's products
on social networking sites, especially WeChat and Weibo.

We chat

WeChat is a famous Chinese application. Since the app allows for more personal material
than other platforms, key opinion leaders can provide regular updates to their fans in a variety
of ways, including a variety of media. different media. like gifs, pictures and videos they
actively edit about White Claw and their fun experiences. WeChat launches 'WeChat Index',
supports KOLs and social search engine optimization (SEO) companies, and manages keyword
trends for best-performing content creators to achieve broad reach and interaction from platform
users.

Weibo

Weibo offers direct e-commerce for purchases as part of our website. The content on the
app is also a bit more engaging as creators and KOLs have more options to share videos, images,
gifs, and create text posts that can include a variety of media to share. Claws. The platform's
design is more open than that of WeChat, and advertising tends to be cheaper than on other
platforms.

Authenticity in KOCs

32
 The Key Opinion Customers use their Voice in an often more personal manner, such as
genuinely recommending brands and/or products to aid those they have connections with
personally. The KOC are consumers who personally promote products and have a lot more
control when it comes to content creation, as brands are required to maintain co-creational
marketing with these individuals.

Baidu Tieba is a platform that we target, it connects people with individual Tiebas
according to their interests. It uses search keywords to precise segment user interests. Another
good thing about Baidu Tieba is that it is more content-oriented than user-oriented. KOCs don't
have to be KOLs to be influential on Baidu Tieba, their posts must be interesting enough to
trigger discussion about the company's product.

Positive publicity and image-enhancing events

Branded sponsorship of sporting and entertainment events will only happen when most
audiences are reasonably expected to be more than LPA. Sponsoring water cans for major
annual Chinese music festivals such as the well-known Midi Festival, and Sunflower Music
Festival.

9. EVALUATION, MEASUREMENT, AND CONTROL

9.1. Action plan

January

White Claw intends to start running ads in early January and officially launch in mid-
January (scheduled for January 15, 2022).

Run high-intensity ads on WeChat and Weibo from January 1 to January 15 while using
media sites such as Chinadaily, nbd.com.cn, sohu.com, … to support brand coverage of White
Claw on the above forums, creating an explosive trend in the imported beverage market. This
serves to provide hard seltzer type information, comparing the difference between hard seltzer
and other alcoholic beverages to consumers in China.

On January 15, 2022, opened the first official store, in Shanghai and retail with
promotions such as price-off promotion “10% off when buying 1 carton of 24 cans” or bonus
pack “six-packs free 1 can". Continue to run ads for the above programs but only focus on
Wechat, Sina, Weibo in order to properly reach White Claw's target customers.

33
 February

We run promotions at e-commerce platforms: Tmall, Pindoudou, Alibaba, Taobao for e-

commerce with similar prices but free home delivery if customers buy products in the Package
line variety of White Claw during early February (the New Year period). This is for platforms
to push White Claw hard seltzer to the top of websites. In addition, combine with promotions
to attract customers: Hourly promotion for retail goods (flash sale), 5% off, and free shipping
for each of your carts.

March

Use well-known fitness and nutrition KOLs on Weibo and WeChat platforms to promote
the brand, features, mission, and vision. Weibo includes 全球健身中心 (roughly translated:
Global Fitness Center), 体态大师 (roughly translated: Body Master), 营养师顾中一 (roughly
translated: Nutritionist Gu Zhongyi). WeChat includes 练瑜伽 (roughly translated: Practicing
yoga), 全球健身指南 (roughly translated: Global Fitness Guide), 爱健身 (roughly translated:
Love Fitness). Continue to run ads on e-commerce platforms.

April

Open sweepstakes on White Claw's official Weibo account to give away 1 box of White
Claw Variety Flavor Collection - 24 packs to the luckiest person. Rules: players hashtag on
their personal account #hardseltzer #whiteclaw #White Claw 适合所有人, take a screenshot
and comment on the lucky number on White Claw's post.

May

Sponsoring the Strawberry Music Festival takes place every May in China to attract
thousands of young people. Place billboards at bus stops and subway stations (in about 3
months). Continue to run ads on e-commerce platforms.

June

Using the KOC effect to increase the authenticity of the product's effectiveness
because most of the utilities are purchased and self-determined by customers,
creating a lot of trust for followers when they share about a product. Make waves on
Baidu Tieba by encouraging them to comment and rate White Claw products with
attractive coupons.
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 July & August

We apply the plan to set quotas for intermediary stores, exclusive White Claw suppliers:
(1 month how much). To promote sales efforts, speed up the turnover of goods. The
intermediaries who reach the fastest target will receive a higher discount, the more advantage
of importing, the more White Claw will support the lower price than the rest.

September & October

White Claw participates in several tradeshows held in Shanghai and Beijing areas. Trade
shows that White Claw will participate in:

- In Shanghai, including 3 programs: ILTM CHINA, FBIE - Food and Beverage, China
Licensing Expo.

- In Beijing, including 1 program: AIFE - Asia International import food exposition, FMA
- China.

December

On the occasion of Christmas, open the "lucky wheel" program (sweepstakes) at the
official store. Prizes such as a big amount, products of White Claw, coupon, voucher. The
customer will be dialed if purchase receipt on xxx. Besides, place White claw posters in pubs
and beer shops that are the intermediary of the company.

35
 Table 6: Timeline summarizing marketing activities 2022

Time activities Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Run ads on social

media

Run ads on e-
commerce

Price-off promotion

Promotion bonus
pack

Flash sale on an e-
commerce

KOLs

KOCs

Sweepstakes

Sponsor for festival

Target sales at each

retail store

Trade show

36
9.2. Control for Implementation of Recommendations

To find out if the marketing strategies we offer are working, we will implement strict
performance controls. Every month we will conduct a profit analysis. If the analysis shows that
the company is earning low profit concerning certain products, territories, or markets, then the
question is: Are there more efficient ways to manage a sales force, advertising, sales promotion,
and distribution involving performing entities?

First, salesforce includes the number of new customers per period, number of lost customers
per period, sales force costs as a percentage of total sales. Second, delivery efficiency includes
controlling the extent and speed of product coverage and shortages. In addition, there are
distribution costs (shipping, trade discounts, promotion activities at the point of sale, etc.) on
the revenue received from each distribution channel. Third, Advertising efficiency includes
advertising cost per medium and per media, percentage of audience most noticed,
viewed/linked, and read for each media. Consumer opinions on advertising content and
effectiveness before/after measuring attitudinal and behavioral towards the product. Final,
effective sales promotion. It is necessary to track each sales promotion campaign and its impact
on sales: the percentage of sales sold on the offer.

To control the above, we need to do some market research and get some feedback from
consumers and conduct customer surveys every month. We will set up an internal system to
monitor sales fluctuations and most importantly to find the correlation between price,
distribution, promotion, and sales. Our company will collect relevant data and such data will be
reported weekly and sent to corporate headquarters. Specifically, the results before and after
several strategies are implemented will be compared. In that case, we can find out which
distribution channel is more efficient, what profit margins and market share we have, and how
much money should be invested to get the best results.

37
10. CONCLUSION

White Claw's marketing strategy is to penetrate and expand market share in China's Hard
Seltzer market. We opted to target people of both genders, with a focus on young people aged
18 to 24. (The Z-generation young people group). We employ numerous IMC tools in the
Promotional Mix section to fulfill our marketing objectives. White Claw, for example, selects
a separate advertising partner - Topkee Media, the advertising agency will adhere to a brief,
which covers the goals that White Claw wishes to achieve with its consumers. During
marketing, we will focus on social networking and e-commerce platforms that build-up offers
and services, particularly during China's big holidays. In addition, we are concentrating on
opening the first store in Shanghai. Specific strategies are constantly watched, and if a quality
issue arises, we will be able to respond swiftly in addressing and resolving any issues. White
Claw's marketing plan will aim to accomplish more than the profit margin in Shanghai and
continue to expand to the whole of China through monitoring

38
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Caroline, G. (2021, August 13). Most polluted countries in the world: 2021 ranking. Selectra.
https://climate.selectra.com/en/carbon-footprint/most-polluting-countries/

ChinTell Limited. (2021, June 11). A new fizz. Week In China. https://www.weekinchina.com

FocusEconomics. (n.d.). China Economic Outlook. FocusEconomics | Economic Forecasts

from the World’s Leading Economists. Retrieved August 22, 2021, from
https://www.focus-economics.com/countries/china/

Greg, A. (2020, August 8). Hard Seltzers, are they here to stay? [Blog]. Untappd.
https://untappd.com/blog/hard-seltzers-are-they-here-to-stay/1133

International Trade Administration. (n.d.). China - Labeling/Marking Requirements.

International Trade Administration | Trade.Gov. Retrieved August 22, 2021, from
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Mark Anthony Group. (2020, June 20). Mark Anthony Group [Post]. Linkedin.
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Pew Research Center. (n.d.). Chinese Religion | Data on Chinese Religions | GRF. Pew
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Statista. (2021, August 13). Change in ad revenue in China 2012–2021, by medium.

https://www.statista.com/statistics/

World Development Indicators database. (n.d.). GNI per capita, PPP (current international $)
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Zhang, Z. (2020, July 3). China COVID-19 Policy Tracker: What Businesses Should Pay
Attention To. China Briefing News. https://www.china-briefing.com/news/china-covid-
19-policy-tracker-benefiting-business-enterprises-comprehensive-updated-list/

a
 APPENDIX

Appendix 1: Administrative licensing system

For the import of alcohol into China, exporters must work in collaboration with a local
import entity that has a valid import business license and personal and company customs and
CIQ certificates. Once conditions are agreed upon, a contract can be signed with the Chinese
import agent and registered with the General Administration of Quality Supervision (AQSIQ).

Then, the beverage for import must be labeled according to China's food labeling
standards, in this case, those for pre-packaged foodstuffs and pre-packaged alcoholic beverages.
Both the original and translated labels in Chinese are required, and a digital version of the
Chinese label is registered with the China Inspection and Quarantine (CIQ) on the first instance
of import. After approval, the labels can be printed.

At customs, a country of origin certificate, health certificate, product ingredients list,

product sales approval registration document, packing list, invoice, contract, and bills of lading
will be required. Accuracy of information provided is important as any delay at customs may
affect perishable goods.

Once customs receives the documents, customs will release the goods to the agent.
Imported goods must comply with relevant standards, and once passed, the CIQ will pass a
commodity inspection document to customs, which is passed to the agent. Once received, the
labels can be applied to the products by the importer.

Customs will then levy customs duties and other taxes and will release a customs
clearance document. At this point, the importer can collect the goods and proceed to deliver
them to the distributor.

b
Appendix 2: Financial paper

Break-even analysis

The break-even analysis indicates that 9,360,000 yuan will be required in sales
revenue to reach the break-even point:

Break-Even Analysis

Year units break-even 120,000

Year sales break-even 9,360,000

Assumptions

Average per-unit revenue 78,000

Average per-unit variable cost 45,000

Estimated 5 Year Fixed cost 4,000,000

Fixed Costs = plan rent, cost of machinery, interest on debt

Variable Cost = plastic and ingredients to make hard seltzers, the shipping cost per unit,
increased advertising costs per unit (ads in China)

Expected profit

First-year

Price 78,000 CNY

Fixed Cost 1,650,000 CNY

Per-unit variable cost 45,000 CNY

Units sold 209,677

Expected Revenue 3,900,000

Cost Forecast 3,670,000

Expected Profit 154,845,000

Gross Profit Margin 2%

c
Appendix 3: Expense budget

Figure 6 Budget for promotion activities of the first year

Unit: 1,000,000

Q1 Q2 Q3 Q4

1 2 3 Total 4 5 6 Total 7 8 9 Total 10 11 12 Total

Run ads on 125 700 470 230 200

social media

Run ads on 20 20 20 20 20 20 20 20 20 20 20 20
e-commerce

Price-off 450
promotion

Promotion 65
bonus pack

Flash sale 30
on an e-
commerce

KOLs 250

KOCs 10

Sweepstakes 5

Sponsor for 5
festival

Target sales 30 30 30 30 30 30 30 30
at each retail
store

5
Trade show

d
e