Burt’s Bees team offer hand massages at the Hong Kong PR event
Top 10 Findings: Creating a Winning Business in China
Published in the News & Observer
http://www.newsobserver.com/2011/09/25/1512399/burts-bees-saw-opportunity-challenges.html
It may seem self-evident but cannot be overstated that the first step is to create a comprehensive strategy. What are your key goals in China? Decide why you want to enter China - is it for manufacturing and supply chain, the market opportunity, or for bioscience, computer science or clean technology partnerships?
Jim Geikie, vice president of global marketing at Burt's Bees, shared that since their acquisition by Clorox in 2007, one of three strategic imperatives was international expansion. The global management consulting firm they hired helped to map out the competitiveness and market attractiveness of Burt's Bees in various countries to determine where to focus their resources.
China is the #3 beauty care market in the world and soon to be #1. While most companies enter China for the size of the market, Burt's Bees was interested because "natural" and "product safety" ranked very high on the list for Chinese consumers. It is common in China for consumers to make their own products at home; there already existed an underlying belief in the power of natural ingredients. They wouldn't have to invest in convincing consumers.
China's intent-to-purchase scores came out very strong out of the 30 countries tested. American brands are still aspirational in China and the 'quirky' Burt's brand with truly natural formulations stood out. Burt's also had the opportunity to make a market as lip care in China is virtually non-existent. "There were lots of reasons to be excited", said Geikie.
Due to the animal testing requirement for imported products, Burt's researched various entry strategies including acquiring a local brand, co-pack and distribution alliances or setting up their own shop including manufacturing and running their own stores. Each was quite complicated with different sets of pros and cons that they weighed through.
They finally chose a partner that has local manufacturing and established go-to market channels and, most importantly, shares Burt's Bees core fundamental values.
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