MK 9709 USYD Tesla Global Consumers and Market Places Paper

DescriptionVictoria Rosalind Emma Bruce
13005569
MK9709
Global Consumers & Market Places
Seminar Tutor: David Brown
Word Count: 2,194
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Contents
1.0: Critical evaluation of Yorkshire Tea in an Established market…………………………..3
1.1: Introduction…………………………………………………………………………..3
1.2: Standard & Unique Products ……………………………………………………………………….3
1.3: Price & Sales promtions………………………………………………………………………………3
1.4: Maintaining & Developing the Yorkshire Tea brand……………………………………….3
1.4.1: Television adversting…………………………………………………………………….3
1.4.2: Social media development and utilisation…………………………………………4
1.4.3: Multichannel campaign marketing…………………………………………………..5
1.5: Conclusion…………………………………………………………………………………………………5
2.0: Proposal of Strategies for Yorkshire Tea to Enter a New Market………………………………..7
2.1: Introduction……………………………………………………………………………………………….7
2.2: Analysis of the consumers’ and target market’s needs and characteristics………….7
2.3: Critical Analysis of Proposed Market Strategies…………………………………………….8
2.4: The Impact of the Recommended Strategies………………………………………………….9
2.5: Conclusion……………………………………………………………………………………………….10
3.0 References…………………………………………………………………………………………………………..11
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Critical Evaluation of Yorkshire Tea in an Established Market 1.0
1.1 Introduction
With a combination of the marketing mix and the marketing communications mix (Todorova, 2015)
Yorkshire Tea has been able to build up a strong brand value, and implement their psychology,
throughout a loyal UK fan base.
1.2 Standard & Unique products
Yorkshire Tea’s standard English black tea has been declared the 3 rd favourite household tea, as 22%
of people surveyed in the UK favoured Yorkshire, however Tetley’s black tea received 29% and PG
Tips’ held the majority with 35% (Kunst, 2020). In 2016 Yorkshire Tea released their unique
‘bedtime brew’ and in 2018 their unique ‘biscuit brew’, both of which have received excellent
reviews on Amazon and major UK supermarkets, thus ensuring they appeal to various target markets.
1.3 Price & Sales promotions
Dom Dwight, the marketing director of Yorkshire Tea, has stated the company regularly checks
pricing and levels of promotion against competition to ensure they are not just buying the market
share temporarily, but rather creating a permanent increase in sales (Horner, 2018). Whilst Yorkshire
Tea often offer 50% extra free on their larger packs (Iceland, 2020) their main competitors’ beat them
on price comparison for their standard pack in the major UK supermarkets (figure 1), with PG Tips
predominately the cheapest, apart from at Morrisons where Tetley Tea was on offer so was cheaper.
Therefore, it is clear Yorkshire Tea’s customer loyalty doesn’t stem from price, but more likely a
combination of product and brand, through marketing & advertising.
Supermarket
Tea Brand
Asda
Tesco
Sainsbury’s
Morrisons
Yorkshire Tea
£2.99
£2.99
£3.00
N/A
PG Tips
£2.00
£2.00
£2.00
£2.50
Tetley Tea
£2.65
£2.00
£2.40
£2.00
Figure 1 Comparisons based on Black Tea – 80 bag pack
Source: (Asda, 2020) (Tesco, 2020) (Sainsbury’s, 2020) (Morrisons, 2020)
1.4 Maintaining & Developing the Yorkshire Tea brand
1.4.1 Television advertising
Yorkshire Tea’s philosophy has always been to maintain its Yorkshire identity, and its philosophy: to
‘do things proper’, i.e. doing things right (Yorkshire Tea, 2020a). To instil the brand’s philosophy,
Yorkshire Tea suggest even their simplest support jobs are done with pride and to the highest
standard. Moreover, for their 2017 TV advertising campaign ‘Where everything’s done proper’ they
hired various Yorkshire born celebrities. This firstly suggested they had employed the Yorkshire3
born triathlon Olympic world champion duo, the Brownlee brothers, as delivery men (Yorkshire Tea,
2017a). Secondly, that they had employed the Yorkshire-based chart-topping band, the Kaiser Chiefs,
for their call centre music (Yorkshire Tea, 2017b). Finally, that Sir Michael Parkinson was conducting
job interviews (Yorkshire Tea, 2017c). Additionally, they promoted Yorkshire Tea’s involvement
with cricket by hiring Stuart Broad and Michael Vaughan to demonstrate ‘bowling done proper’
(bowling a Yorkshire Teabag into a cup) (Yorkshire Tea, 2017d). The aforementioned subtly suggests
Yorkshire Tea only use the best of the best, hence ‘doing things proper’, whilst maintaining a
continuous Yorkshire theme. The campaign received praise and awards for celebrating their
philosophy in a fun, humours and famous way (Heartfield, 2017; Barrett, 2018).
A survey conducted by BARB found that UK adults over the age of 65 watched on average six hours
of TV a day, three times more than those aged between 16-24 (Johnson, 2019a). This is supported by
a timeline study, displaying, through
daily figures for time spent watching
TV, the gradual decline of viewers
from 2010-2017 (figure 2).
Coincidently, YouGov found
Yorkshire Tea was the favoured tea
brand for 50+ year olds, but PG tips
was the favourite for the 18-49-age
bracket (Wunsch, 2018).
Figure 2 Average daily time spent watching TV per individual in the United
Kingdom (UK) from 2010 to 2017, by age. Source (Johnson, 2019b)
Therefore, it could be suggested
that the older target market was
influenced largely by the 2017 ‘do things proper’ advertising campaign, and, due to the disinterest in
television in younger groups, it had less impact on them.
1.4.2 Social media development and utilisation
A timeline study by Ofcom found that by 2018 an average of 94% of participants aged 25-34 had their
own social network profile (figure 3).
Those aged 65+ were far less likely
to have one, although there had been
a noticeable increase from 35% in
2015 to 51% in 2018. Furthermore
Dwight, acknowledged this
development and in turn the value of
Figure 3 Social network profile ownership in the United Kingdom (UK)
utilising social media, holding that
from 2015 to 2018, by age group. Source (Johnson, 2020)
it’s not about the likes and followers
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alone: rather, that it should be used to engage and communicate with followers (fifteen, 2018), in turn
learning about consumer needs, wants and requirements, and thereby satisfying their target markets.
Yorkshire Tea have used events such as Wimbledon (image 1) and the Football world cup (image 2)
as a way to promote humorous content and not just their
products, thus building a personality for their social media
and communities. However, with the implementation of
humour across various marketing channels, Yorkshire Tea
need to ensure they don’t distract from their strong
branding to
become a
Image 1 Twitter post with humorous caption
parody,
‘This original photo from 1547 shows just
achievable by
how simple and blocky the graphics of tennis
ensuring they
used to be…’ Source: (Yorkshire Tea, 2018a)
constantly
maintain and implement their Yorkshire philosophy.
Furthermore, Yorkshire tea were recently inadvertently
Image 2 Twitter post with humorous caption
‘In honour of England’s rock solid Yorkshire
involved in a political tweet, causing a backlash with
defence, we’ve popped down Malham Cove
many angry fans tweeting that they would be boycotting
with a chisel.’ Source: (Yorkshire Tea, 2018b)
the brand. Surprisingly, the company were widely praised for their “be kind” response (Campbell,
2020; Wearmouth, 2020), further shaping their social media personality, with a ‘human’ like response
(Harrington, 2020b). However, Salonee Gadgil, a digital content director at Stand Agency criticised
their ‘pointless’ response for engaging in politics (Harrington, 2020b).
1.4.3 Multichannel campaign marketing
With various Brits around the world complaining about poor quality tea via social media, Yorkshire
Tea listened and responded (Bold, 2019). They took a tea van, ‘little urn’ (potentially a play on ‘little
Ern’ – the nickname of the late comedian Ernie Wise – raising a comforting, well-liked image in the
mind of the consumer), around the world as part of an integrated multichannel campaign (Yorkshire
Tea, 2012a). Dwight explained that the TV campaign reached millions, which led to social media
visits, where users could find stories, photos and videos of ‘little urn’s’ trip (Steers, 2012).
Furthermore, Yorkshire Tea ran a sales promotional holiday competition alongside the ‘little urn’
campaign, to ensure interest was generated and maintained.
1.5 Conclusion
Yorkshire Tea have been able to build and develop a strong and established brand within the UK by
implementing a powerful marketing mix, alongside development of varying technological platforms
i.e. social media, YouTube and television, thereby maintaining relevancy. It is clear they continuously
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listen and interact with their followers and community, ensuring they provide the products and
services for continual satisfaction of their varying target markets.
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Proposal of Strategies for Yorkshire Tea to Enter a New Market 3.0
2.1: Introduction
Yorkshire Tea is already successfully established in over 20 countries globally and holds a warrant of
appointment for HRH Prince of Wales (Bettys & Taylors, 2020), demonstrating their knowledge,
experience, and thus their stature.
2.2: Analysis of the consumers’ and target market’s needs and characteristics
In a comparative seminal study, Brookes & Smith reported a low psychic distance between the UK
and Australia (figure 4).
Factors
Power Distance
Individualism
Masculinity
Uncertainty Avoidance
Long term orientation
Political Legal
Environmental
Supply Chain
Business Practice
Language
Average
1
2
2
2
3
1
1
1.5
1.5
1
Operational Facility
UK
Australia
3
3
2
2.5
1.5
1
1
2
1
1
1.7
Figure 4 Psychic distance between UK and Australia
Source: (Brookes & Smith, 2007)
Moreover, this was
further supported by
Bhowmick (2019), with
both countries reflecting
similar language,
political, legal,
environmental and
business practices.
Furthermore, the
Yorkshire Tea brand has
always had a big focus on
British culture, including their products, social media and their use of British, specifically Yorkshireborn, celebrity orientated advertisements and endorsements (1.4). An over implementation of British
culture and lack of
appropriate international
marketing and advertising
could deter Australians from
purchasing Yorkshire Tea’s
products. However, cricket
is popular in both Australia
and the UK, with Yorkshire
Tea already utilising it often
in their advertising
Figure 5 Results of an Australian tea survey. The subjects were asked their
favourite flavour tea. Source: (Downes, 2015)
campaigns (1.4.1): a similar
advertising format could be
applied in Australia. Yorkshire Tea’s hiring of international brand manager, Simon Hotchkin
(Yorkshire Tea, 2012b), should help prevent any potential cultural missteps during the
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internationalisation. Furthermore, 52% of Australians surveyed declared tea their favourite drink, with
an average consumption of 9.5 cups every 7 days (Roy Morgan, 2016). Black tea was found to be the
most popular tea in Australia, at 42% (figure 5). While Yorkshire Tea do produce 72% of teas
favoured by Australians, and additionally a green tea flavour, they do not produce a Matcha green tea,
which gained 23%, of the vote. Furthermore, Matcha green tea emerged as the strong favourite for
Australian’s aged 18-29, with 45% of the vote, supported by Roy Morgan (2015). In order for
Yorkshire Tea to appeal to all potential target markets, it is imperative they provide products fully to
satisfy the varying wants and requirements of the Australian citizens, thus potentially developing
flavours to appease the remaining 28% whose favourites they do not currently provide.
2.3: Critical Analysis of Proposed Market Strategies
Although an international entry strategy would be relatively low cost to execute (Nadkarni, Herrmann
& Perez, 2011), it would not be viable to implement. Yorkshire Tea’s competitors Lipton and
Twinings are already well established in Australia (Associated British Foods plc, 2018), with
Twinings dominating the market share at 30.3% and Lipton with 21% (Grimsey, 2016). Furthermore,
both companies already produce the majority (average 72%) of teas favoured by Australians,
therefore it would be a high-risk strategy. Additionally, due to the popularity of Yorkshire Tea’s
current product flavours in the Australian market it would be unadvisable and potentially nonproductive for the company to develop a full range of customised and unique products in an attempt to
satisfy the remaining averaged 28%. Moreover, implementing a multi-domestic strategy would
require a high level of responsiveness and potentially large financial support (Meyer & SU, 2015).
Therefore, there is no requirement for Yorkshire Tea to execute a personalised, costly and high-risk
transnational strategy (London & Hart, 2004) as a form of market entry.
Due to Yorkshire Tea’s high level of expertise, and the additional similarities in psychic distance,
competitor success and further aforementioned reasons, the implementation of Porter’s (1986)
globalisation strategy is the chosen entry method. A low level of product responsiveness is required
(Zou & Cavusgil, 1996), which is achievable due to the pre-existing popularity of Yorkshire Tea’s
product range. Additionally, both countries have the same dialect, therefore products can be
distributed in a similar standardised packaging as the UK.
However, in order for Yorkshire Tea to achieve success when entering the Australian market, it is
imperative their products appeal to more potential consumers and a larger target market than the
average 72% achieved by their potential main competitors, Liptop and Twinings. Product
differentiation provides potential for Yorkshire Tea to gain a competitive advantage and in turn a
large market share. Whilst a joint venture with British Matcha tea company Teapigs (2020), would be
beneficial due to their similar business practices (Harrigan, 1986), it would be ineffective due to the
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lack of experience and knowledge both companies possess of the Australian market. Furthermore, due
to Yorkshire Tea’s previous internationalisation experience, animosity and disagreements may occur
in relation to the expansion and business operations, moreover legalities and costs relating to market
entry would be relatively high. Franchising provides a flexible, relatively low-cost route (Hoffman &
Preble, 1991; Yin & Zajac, 2004), however this in turn would allow limited control for Yorkshire Tea
(Quinn & Doherty, 2000). The results could be damaging to the powerful brand, product quality, and
community on which Yorkshire Tea focus and take pride in (1.4). Additionally, due to the strong
competition Yorkshire Tea will face in Australia, they cannot risk utilising franchising as a market
entry method.
Therefore, in order for Yorkshire Tea to appeal to the various target markets I advise the company to
implement a combination of a globalisation and cobranding (Washburn, Till & Priluck, 2000)
strategy. A co-branding partnership could be established with Zen, a superior (Matcha Reviews, 2016)
and successful Australian Matcha tea brand (Zen, 2020a). This route provides expertise from an
already established and successful company in the Australian market, moreover a 2008 study by
Gupta & Fernandez declared similarities between Australia and the UK in their supply chain and
business practice operations, further supported by Nostratabadi et al (2019). Although a cobranding
entry will incur some legal costs, they will be considerably lower than those of a joint entry, moreover
cobranding with Zen allows Yorkshire Tea to maintain full control over the majority of their
operations, unlike franchising or a joint venture.
2.4: The impact of the Recommended Strategies
The globalisation entry strategy allows Yorkshire Tea to distribute their original products in Australia
at a low cost, furthermore 65% of grocery sales in Australia derive from two supermarkets,
Woolworths and Coles, both of which could potentially stock Yorkshire Tea (Roy Morgan, 2019).
Although there would be a strong level of competition for Yorkshire Tea upon entering Australia, the
company wouldn’t have to invest a lot of time and finance in researching various distribution channels
and could initially focus on the two aforementioned supermarkets for distribution. Additionally, the
1.3 million British expatiations living in Australia (BBC, 2020) may purchase the tea upon
recognising it in a major supermarket.
Because, both countries share the same dialect, Yorkshire Tea’s multichannel marketing campaigns
(1.4) would be understood in linguistic terms; however, as previously stated, Yorkshire Tea’s brand
has always had a big focus on British culture. Therefore, Yorkshire Tea need adapt their marketing
campaigns appropriately, which can be achieved in a cost-effective manner as Yorkshire Tea can
utilise Zen’s experience of Australian culture, as well as their own advertising and branding
experience, to implement successful campaigns.
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It was reported that 78% of Australians are concerned about Global warming, the highest level since
April 2006 (Roy Morgan, 2019), with over 65% of respondents aged 18-24 believing that ‘if we don’t
act now it will be too late’. Serendipitously, Yorkshire Tea have been frequently praised for their
environmental ethics, from developing and using plant-based tea bags (Wright, 2019) to investing in
the communities they buy from (Yorkshire tea, 2020b). Additionally, in 2017, Yorkshire Tea were
awarded with the Queen’s award for sustainable development (Yorkshire Tea, 2017e). By establishing
a cobranding partnership with Zen, a sustainable and environmentally friendly (Zen, 2020b) company,
Yorkshire Tea will be able to satisfy their customers beyond products alone, as their target consumers
with environmental concerns can purchase all of their products, knowing they’ve been sourced and
produced in an environmental and sustainable way.
2.5: Conclusion
The cobranding will allow for production and distribution of products appealing to various target
markets, additionally the sustainable ethics demonstrated by both companies should appease target
consumers beyond product satisfaction; this allows for potential competitive advantage. Furthermore,
the combination of Yorkshire Tea’s and Zen’ business practices, combined with their experienced
marketing and advertising techniques, will permit successful, culturally adapted and appropriate
multichannel marketing campaigns. Supported by the analysis, comparisons and earlier discussions, it
is clear a combination of globalisation strategy and a cobranding partnership with Zen is most likely
to ensure success for Yorkshire Tea upon entering the Australian tea market.
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Zen. (2020b). About Zen Green Tea. Retrieved from https://zengreentea.com.au/about-zen-green-tea/
Zou, S., & Cavusgil, S. T. (1996). Global strategy: a review and an integrated conceptual
framework. European Journal of Marketing. doi: 10.1108/03090569610105799
15
Hello, everyone, today my topic is Chinese auto market and Tesla. First, I will assume that
Tesla has not entered the Chinese market yet, and then formulate a strategy for Tesla to
enter the Chinese auto market.
The first part of the poster is about the Automotive sales industry in China. From the chart,
we can see that from 2010 to 2017, China’s vehicle sales have been growing, and then
fluctuated at a high level. But electric vehicle sales in China only exploded in 2021, and
the proportion is still lower than that of gas-guzzling vehicles. That means the potential for
electric vehicles in China is huge. According to statistics, China is by far the largest market
for electric vehicles, accounting for 59 percent of global electric vehicle sales in 2022. I
like the prospect of Tesla entering the Chinese market because it is the leader of the electric
vehicle industry.
The second part of the poster is from the 2023 Global Automotive Consumer Study
published by Deloitte. The study points out the core characteristics of Chinese auto
consumers in terms of purchase intention, brand preference, channel choice, after-sales
preference and car use habits, which have six parts in total. Overall, Chinese consumers’
interest in pure electric vehicles continues to grow, with much of their appeal centered on
consumers’ desire for a better driving experience and significantly lower fuel costs.
However, in order to achieve greater popularity of electric vehicles, obstacles such as
battery safety, charging time and charging convenience need to be overcome.
The third part of the poster is the new market entry strategy of electric vehicle enterprises
in the automobile industry. On the whole, Tesla follows an attacker’s advantage strategy,
and capitalizes on their competitors facing the challenges of architectural innovation when
confronted with Tesla’s novel value proposition. Specifically, the attacker’s advantage is
focused on high-level strategy, and they don’t have to do things the old way because they
can innovate the business model. In view of consumers’ dissatisfaction with the existing
product quality, after-sales service, preferential packages and subscription payment, Tesla,
as a new seller, can make targeted improvements to achieve consumer satisfaction. Ideally,
competitors would be challenged with architectural innovation in the face of Tesla’s novel
value proposition. This is Tesla’s chance to leapfrog its competitors. From this perspective,
the strategy works well. But at the same time, this strategy also has some shortcomings.
For example, this strategy only focuses on improving the quality of Tesla’s products and
services and does not involve policies on public facilities. In short, if Tesla’s profits in China
continue to grow steadily, it means that Tesla’s strategy to enter China is reliable and
effective. If Tesla’s profit growth momentum in China is not ideal, then it will need to
measure whether sales and cost problems and change the strategy to solve these
problems. Strategy should not be static but should be constantly reviewed and evaluated
from time to time to refine the strategy to meet Tesla’s goals.
Thanks for your listening.
Chinese auto market & Tesla
Automotive sales
industry in China
6 Needs and Characteristics
of Chinese auto consumers
1
Chinese consumer demand for electric
vehicles is rigid.
Market entry strategies
✓ Follow an attacker‘s advantage strategy
Product quality has become the main
concern of consumers.
✓ Capitalize on their competitors facing the
3
After-sales and discount packages are
the key factors for each sales channel to
win in the competition.
when confronted with Tesla’s novel value
4
4S stores are still the most mainstream
after-sale channel for Chinese auto
consumers.
2
Vehicle sales and electric vehicles sales in China
from 2010 to 2022 (in million units)
China is, by far the largest electric
vehicles market, with 59 % of global
electric vehicles sales in 2022.
5
Consumers are less interested in paying
for subscriptions, preferring one-off
payments.
6
The perfection of public facilities affects
consumer experience and convenience.
challenges of architectural innovation
proposition.
Reference
Deloitte. (2023). 2023 Global Automotive Consumer Study. Retrieved from:
https://www2.deloitte.com/content/dam/Deloitte/at/Documents/automotive/atdeloitte-global-automotive-consumer-study-2023-ergebnisse-global.pdf
Ev-volumes. (2023). Global EV Sales for 2022. Retrieved from:
https://www.ev-volumes.com/
Statista. (2023). Passenger and commercial vehicle sales in China from 2010
to 2021. Retrieved from: https://www.statista.com/statistics/233743/vehiclesales-in-china/
Statista. (2023). Annual sales volume of new energy vehicles in China from
2011 to 2021, by type. Retrieved from:
https://www.statista.com/statistics/425466/china-annual-new-energy-vehiclesales-by-type/
Thomas, V. J., & Maine, E. (2019). Market entry strategies for electric vehicle
start-ups in the automotive industry–Lessons from Tesla Motors. Journal of
Cleaner Production, 235, 653-663.

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