Professional Documents
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Introduction
This paper makes an initial investigation regarding the feasibility of entering the
Dutch market for the Canadian tea company, DAVIDsTEA. DAVIDsTEA being one of the
top brands in the Canadian market offers a variety of tea products disrupting the tea market
by delivering a superior consumption experience among Canadian consumers. The brand
aims to do the same by strengthening its presence outside the country and exploring if it
would be a wise strategy to go and expand into the Netherlands tea market. The group
conducted the analysis through looking at the different factors that affect international
marketing complexity - cultural and social factors, economic factors, technological factors,
and the current tea market landscape in the Netherlands.
First, the group observed in terms of cultural and social factors that the country is
very diverse with its population of different ethnicities who practice a variety of religions.
The group also discovered that the Dutch have a practice called “gezellig” practice that
involves one's overall wellness, from having a peaceful state of mind to simply enjoying
a healthy meal which can be an occasion where tea can be consumed. Additionally,
Hofstede ‘s Dimensions was also used to compare and contrast the Canadian and Dutch
culture to unearth which parts of the Dutch culture can be leveraged when entering the
tea market. For economic factors, it should be noted that the Dutch enjoy a high quality
of life with key economic indicators constantly being ranked one of the best in the
European Union if not the world. It is also emphasized how the Free Trade agreement
between Canada and the EU (CETA) grants Canadian companies like DAVIDsTEA the
ease to do business. Lastly, the Netherlands being one of the most well-connected
countries in the world aided by its world-class infrastructures greatly enhances the
appeal of the country when it comes to doing business.
Politically, we see how similar Canada is to the Netherlands with the two
countries having a constitutional monarchy. As a member of the European Union some
aspects of its legislative and judicial system are influenced by EU laws. The country
also boasts a score of 80 in the corruption index which makes the country attractive to
investors given the low incidence of corruption. Aside from an attractive political
landscape, the country also tries to attract business by putting in place laws that
increase the ease of doing business and giving generous tax incentives.
The Dutch can also be seen as tech-savvy exhibited by high broadband and
mobile penetration among its citizens. Additionally, 96% of the population uses social
media which is often used to find information, connect with friends and family, and
research brands. The COVID-19 pandemic also accelerated eCommerce in the country
with 9 out of 10 Dutch saying that they bought something online in 2020. Lastly, the
team looked at the current tea market landscape in the Netherlands. We found that the
market is dominated by Pickwick, a local tea company which enjoyed a 38% brand
share in 2022. It is followed by Lipton and Clipper which each have an 8% brand share
in 2022. Despite this, however, we see that there might be an opportunity for
DAVIDsTEA to penetrate the market given that the major players are all traditional
teas with basic flavors in contrast to the modern and infused flavors that is offered by
DAVIDsTEA.
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Company Overview
DAVIDsTEA is a privately owned business producing and selling specialty and prime
loose-leaf teas, trade-marked tea related accessories, pre-packed teas and tea sachets
across Canada. The business started with one store in Toronto, Canada and it was founded
and pioneered by David and Herschel Segal. With more than 230 physical stores, the
business also has presence in over 2500 grocery stores and various pharmacies across
Canada (DAVIDsTEA Inc., 2022). Additionally, DAVIDsTEA has penetrated e-commerce and
sells its products not only on their website but also through Amazon Marketplace.
Headquartered in Quebec, Canada, DAVIDsTEA's Inc. employs 249 full-time employees and
185 casual employees within Canada (DAVIDsTEA Inc., 2022). The total distribution of
manpower is presented at the table below:
Corporate Office 137
Source: https://www.hofstede-insights.com
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As a Canadian business, doing business in the host country, the Netherlands,
DAVIDsTEA can leverage on the idea of “gezellig” as it aligns with the business’ value of
encouraging a positive change through equity, diversity and inclusion as well as promoting
physical and mental wellness (DAVIDsTEA, n.d.). Moreover, the home business can also
utilize Netherland’s femininity dominance as it illustrates high value on quality of life more
than achievement and material success. Furthermore, like Canada, the Netherlands also
showed a high score on indulgence. This exhibits desires of having an enjoyable life rather
than strong control as a way of living.
The business DAVIDsTEA can leverage on the aspect of indulgence and femininity to
better understand the intercultural strengths and challenges of the Netherlands.
Additionally, by utilizing the above-mentioned findings with regards to the Netherlands’
social and cultural facets, there is an opportunity for the business to deliver the products
with better pricing. Also, the management may be able to use the insights to proactively
manage the campaigns that will support a successful business entry on an international
level.
Economy
The Netherlands enjoys relatively prosperous economic conditions exhibited by its
key economic indicators:
Economic Indicator Value EU Rank World Rank
Canal system & 165 canals, 7100 Interland, within EU Zeeland North
waterways waterways shipping
Considering the infrastructure of the Netherlands, the country being deemed as one
of the best countries in the world would not come as a surprise. The country possesses
world-class airports and ports coupled with one of the world-class (in terms of density and
quality) makes transport of goods within the Netherlands highly efficient. This highly
efficient and usually busy infrastructure of the Netherlands is expected to make market
entry for all interested businesses to be helpful and attractive.
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Running Head: TERM PROJECT PART 1 - ARTICLE PRESENTATION
Technological
Telecommunications
According to World Data, the Netherlands has a relatively high level of broadband
penetration in Europe in 2021 at 43.4%. In terms of devices used, use of landlines has
declined over the years (28.65% of the population) as compared to mobile cellular phones
(124.8% of population). As of 2023, KPN and Vodafone which have a market share of 27%
as well as T-Mobile (which has a market share of around 22%) are the three major
telephone providers in the country.
Digital Media
The Digital 2022 Report by we are social and Kepios estimates that the Netherlands
has 16.5 million internet users or roughly 96% of its population. As a developed nation,
these statistics are not surprising given that roughly 89.6% of the population owns a
mobile phone and uses this to browse the internet and on the average the Dutch spend 5
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Running Head: TERM PROJECT PART 1 - ARTICLE PRESENTATION
hours and 11 minutes using the internet per day. The purpose of accessing the internet
would be for finding information, keeping up with the latest news and current events,
researching brands, communicating with family and friends, and browsing during their free
time. As finding information and research seem to be at the top of the purpose of using the
internet, market share of search engines must be given importance:
Search Engine % Market Share
Google 93.8%
Bing 3.4%
Duckduckgo 1%
Yahoo! 0.9%
Aside from gathering information online, the Dutch population also keep themselves
busy with various activities available online such as video streaming, audio streaming, and
playing video games. Additionally, the number of Dutch social media users is growing with
approximately 15.6 million users in 2022. These users spend roughly an hour and 21
minutes on social media. Below are the most used social media platforms:
Platform % used in the past Estimated Reach Reach as % of
month Population
Whatsapp 88.6% - -
Above data shows that news brands have adapted to the changing media habits and
have ensured to have digital presence. Moreover, it can be observed that trust in news in
the Netherlands is high most especially for NOS News which is the most trusted news
source of the Dutch. Regardless of decline in pluralism of the media, it still is important to
emphasize that existing media infrastructure in the Netherlands is stable and well-
established. Overall, given its current infrastructure and tech-savviness of its citizens, we
can say that The Netherlands is a technologically advanced country. There are multiple
channels where potential consumers may be reached as telecommunications is widely used
as well as social media.
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Running Head: TERM PROJECT PART 1 - ARTICLE PRESENTATION
Competition
The market of tea in the Netherlands is expected to grow annually by 2.55%
annually. The increase in interest and in tea consumption has been making the tea industry
very much lucrative in the drinks and beverages market. The top competitors that
DavidsTea will face in the tea market in the Netherlands would be: Pickwick, Dilmah,
Lipton, and T’s Teabar.
Pickwick
Pickwick is a homegrown tea brand in The Netherlands and has been around since
1937. They import the tea leaves from India, Sri Lanka, Indonesia, China, Malawi and South
Africa. It is the largest tea brand in the Netherlands. Pickwick tea offers different varieties
of teas, such as traditional tea, fruit tea, herbal blend tea, green tea, and rooibos, black tea.
The wide assortment of tea caters to all the different types of tea drinkers. The teas are
packed in tea bags, The price of pickwick teas is lower than David’s tea and it can be bought
on supermarkets and grocery store shelves.
Clipper Tea
Clipper tea was founded by husband and wife Michael and Lorrain Brehme in 1984
in Beaminster, Dorsett. Clipper teas are produced with 100% natural ingredients with no
artificial flavors. They were the first tea company to use plant-based and biodegradable
teabags. After ten years, in 1994 Clipper tea became the UK’s first fairtrade tea company.
Clipper tea takes pride in their black tea, which was imported from East Africa and India. It
has won many taste awards and they claim that it is the best tasting product that they have.
The company was first sold to Fleming Family and partners in 2007 and was eventually
sold to Royal Wessanen in 2012. Clipper teas can be bought in supermarkets and online.
Lipton Tea
Lipton tea was founded by Sir Thomas Lipton. He started his grocery business in
Glassglow and sells tea. He saw the potential of the tea market, so he decided to buy a tea
plantation in Sri Lanka. He innovated ways in transporting leaves efficiently thru cable cars.
Tea was then a luxury in Britain, yet Sir Thomas believed that tea should be enjoyed by
everyone. Soon after he started packing the teas in silk bags to be dipped in water. It was
one of the first teas that was sold in tea bags. Lipton now offers a great selection of tea from
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green tea to fruit flavoured teas. Lipton teas can be bought in boxes with individually
packaged tea bags inside.
Zonnatura
Zonnatura have been producing their product since 1954. All the products are made
from 100% natural and organic raw materials. Zonnatura guarantees that their products
are made without any artificial additives and are free of generally modified organisms.
They make their product with very minimal processing to maintain its deliciously natural
taste and retain all the nutrients from its fresh ingredients. They have herbal teas, 100%
pure herbal tea, green tea and instant tea.
Positioning Map
Looking at the tea landscape in the country, each competitors’ positioning can be
separated by their cost positioning and taste. Cost positioning refers to whether or not the
brand possesses premium or economy pricing. Taste, on the other hand, refers not only to
the richly earthy taste and flavor of the tea but also includes the aroma of the beverage as
the user consumes it.
Based on the positioning map, DAVIDsTEA and T’s tea bar tea are high in terms of
pricing and taste. Pickwick, Clipper Tea, Zonnatura and Lipton taste plain and more earthy,
DAVIDsTEA taste is more flavorful because of its tea infusions. T’s tea bar loose leaves tea
tastes close to DAVIDsTEA and it also gives the relaxing vibe that DAVIDsTEA has at a little
bit higher price. Given the premium pricing of DAVIDsTEA as compared to the other brands
in the market, the team anticipates possible difficulties in its initial entry. Yet, this is
justified by the more rich, flavorful, and modern taste that DAVIDsTEA offers which can be
seen as a white space or opportunity in the market.
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References
Baack, D. W., Czarnecka, B., & Baack, D. E. (2018). International Marketing (2nd ed.).
Thousand Oaks, CA: SAGE Publications.
Telecommunications in the Netherlands. (2022, December). World Data Info.
https://www.google.com/url?q=https://www.worlddata.info/europe/netherlands/
telecommunication.php
Euromonitor International. (n.d.). Market sizes: Brand Shares of Tea: % Retail Value 2019-
2022 [Data set]. Passport. Retrieved March 9, 2023 from
https://www.portal.euromonitor.com/portal/analysis/tab
O’Leary, S. (2022, January 13). Mobile phones and SIM cards in the Netherlands: the ultimate
guide. Dutch Review. https://dutchreview.com/expat/mobile-phones-netherlands
Online shopping ever more popular in 2020. (2021, February 2). Eurostat.
https://ec.europa.eu/eurostat/web/products-eurostat-news/-/ddn-20210217-1
Bakker, P. Netherlands. Media Landscapes.
https://medialandscapes.org/country/netherlands/media/print
Newman, N., Fletcher, R., Schulz, A., Andi, S., Robertson, C., Neilsen, R.K. Digital News
Report 2021. (10th ed.) Reuters Institute.
https://reutersinstitute.politics.ox.ac.uk/sites/default/files/2021-06/
Digital_News_Report_2021_FINAL.pdf
The 5 largest airports and airlines in the Netherlands. World Data info,
https://www.worlddata.info/europe/netherlands/airports.php
Hillz, P. (2022). Nederland Trading Country Export, Import & Investigation. Statistical
Netherlands. https://longreads.cbs.nl/nederland-handelsland-2022/
OEC. (2022, June). Latest Trends of Netherlands. The Observatory of Economic Complexity.
https://oec.world/en/profile/country/nld
World Bank. (n.d.). Gross domestic product 2021 - World Bank. Worldbank.org.
https://databankfiles.worldbank.org/public/ddpext_download/GDP.pdf
Economic forecast for Netherlands. (Last Update 2023, February 13.). European
Commission. Economy - Finance.ec.eu.
https://economy-finance.ec.europa.eu/economic-surveillance-eu-economies/
netherlands/economic-forecast-netherlands_en
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OEC. (2022, June). Latest Trends of Netherlands. The Observatory of Economic Complexity.
https://oec.world/en/profile/country/nld
PR Newswire. (2021, May 4). A Life Devoted to Tea & Kindness: Sri Lanka’s “Mr. Dilmah”
Celebrates 71 Years of Brewing Cups of Kindness. PR Newswire US.
Clipper Goes Dutch in £50M Sale. (2012, March 6). Daily Mail, 67.
Appendices
Appendix 1
Potential Actual
EXPECTATIONS marks marks
Exceeds Meets Below Unacceptable
Introduction
● Brief introduction mentioning the main parts 5 5 4 2-3 0-1
(headings) of this report
Company Overview
● Brief and informative company overview
● Includes company name, size (number of
10 10 6-9 3-5 0-2
employees), location(s), industry, brief history,
mission statement, and what products will be sold
in or to the foreign country selected.
Market Audit – Culture & Social
● Country’s relevant historical events described and
evaluation of how they might impact a Canadian
business wanting to enter the local market
● Informative description of population size, age
structure, languages spoken, religion(s), ethnic
makeup, and literacy and education levels
● Hofstede’s dimensions (power distance,
individualism, uncertainty avoidance, and
femininity) appropriately applied to explain target
15 15 10-14 7-9 0-6
customers’ values and beliefs
● Differences in scores on each dimension explained
(Canada vs. selected country) regarding what it
means for you as a Canadian marketer
● Hofstede comparison chart/graph of your selected
country and Canada included and of high quality
(readable, labels and scores included)
● Description of cultural imperatives, electives, and
exclusives and how knowing about them will help
you as a Canadian marketer
Market Audit - Economy
● Brief description of current GDP, GDP per capita,
inflation rate, currency exchange rate (re Canadian
$), unemployment rate, major imports/exports,
principal industries, trade restrictions and trade
agreements (if any with Canada) 15 15 10-14 7-9 0-6
● Description of existing infrastructure
(roads/highways, airports, railways, ports, channels
of distribution)
● Evaluation of how infrastructure helps or hinders
market entry
Market Audit – Political and Legal 15 15 10-14 7-9 0-6
● Description of current political system & views of
foreign businesses by the government (open for FDI
or not)
● Evaluation and explanation of political stability
● Description of any special taxes, monetary policy &
financial stability
● Informative description of legal system
● Explanation of level of corruption
● All findings related back to their impact on an
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International Marketer
Market Audit – Technological
● Description of media and technology use (radio, TV,
computer, mobile phones, landlines, number of
15 15 10-14 7-9 0-6
Internet users and types of media available)
● Findings related back to their impact on an
International Marketer
Market Audit – Competition
● Detailed description of 3 main competitors (direct)
● Positioning regarding competitors is appropriate
and well explained
● Correct use of a positioning map (labels, positioning 15 15 10-14 7-9 0-6
of 3 competitors and company)
● Discussion of any competition concerns
● Findings related back to their impact on an
International Marketer
References
● At least 10 references used (in-text and list of
references) 5 5 4 2-3 0-1
● References are from credible and reliable sources
● References are current and appropriate
Correctness Level
● Effective writing style
● Demonstrate overall logic and flow between the
5 5 4 2-3 0-1
main parts of the report
● No grammatical, spelling or punctuation errors
● Within the 15 pages page limit
TOTAL: 100