1. International Marketing (MKT343)
Professor Thea Bellos
Summer 2012
Anh Thi Van Tran (Anh)
Kuan-chieh Huang (Jerry)
Piyanuch Kangwankijwanich (Tu)
Ting Tseng (April)

2. AGENDA
1. Missions and Challenges
2. SWOT Analysis
3. Business Concepts
4. Industry Analysis
5. Country Analysis
6. Strategic Marketing Direction
7. Overall Strategic Approach
8. Marketing Mix & IMC
9. Conclusion

3. Mission
In U.S. - 170 restaurants
In 2012 - expand to China:
Shanghai, Beijing, Guangzhou
Challenges
To understand Chinese cultures and tastes
To follow regulations of commercial TV

4. SWOT ANALYSIS
Strengths
Variety of menus
Appreciated awards
Intensive branches
Weaknesses
Declining market share
Opportunities
Growth of food tourism
Expanding restaurant industry
Threats
Rising labor costs
Strict regulations
Numerous competitors

5. CONCEPT
Business Models
Build partnership with locals
Maintain CRM
Cooperate with government
Set positioning as “Premium American Dinning”
Key Factors
Quality control, venue selection, venue set-up, staff training, innovation,
revenues and sales, and market share
Risks
Heavy debt in China
Restrictions of foreign investment: to protect domestic companies

6. INDUSTRY ANALYSIS
Size and Growth Trends
Vulnerability to Economic Factors
Predict to grow 16.5% annually Increase restaurant revenues:
Boost sales (lunch/dinner)
Rising household incomes
Eat out trend:
Many business activities
High income, high quality Unstable factors:
Global financial crisis
High competition in fast food

7. INDUSTRY ANALYSIS
Technological & Seasonal
Factors
Good event = More competitive
For example, the weddings,
event planning, and celebration
have fully influenced on the fullservice restaurant’s sale.
Public holidays and festivals
Beijing Olympics
Regulatory Issues
China regulations
Food safety supervision
Smoking ban
English menu
Waste management

8. INDUSTRY ANALYSIS
Financial Consideration
Factors influence on industry revenues
Wide range of industry
Variety size of restaurants
Operating costs
Raw materials, wages, rent
Harsh regulations
Risk Analysis
Inflation
Too strong liquidity growth
Over demand
Mounting input costs
Wages and oil price
Natural disasters
Increasing vegetable price

9. COUNTRY ANALYSIS
China is one of the world most growing countries
Competitive Advantages
 Low labor cost
 Abundant natural resources
 Major leaders of international organizations

10. COUNTRY ANALYSIS
Economic Statistics
GDP is growing 8% annually
Unemployment in urban areas are decreasing
from 4.65% to 4.1%
Middle class is increasing
from 65.5 mill in 2005 to 80 mill in 2007
The government is resisting external pressures
due to country’s benefits of export

11. COUNTRY ANALYSIS
Government/Political/Legal
 One-child-family policy: 1.5 bil by 2030
 One-party state to control regulations
 High budget deficit
1.1% of GDP in 2011 > 1.9% in 2012
 Inflation concerns: Rising interest rates
 Effects of joining WTO
Having relationship with other countries
Affecting domestic markets

12. COUNTRY ANALYSIS
Risk Analysis
One-party state: Unstable regulations
High debt burden: Demand of local government
Restrictions for foreign companies
Chinese-foreign equity Joint Venture
Different kind of costs
To educate labors
To increase labor costs
Corruption: Judicial decisions
Contract enforcement
Protection of property rights

13. STRATEGIC
MARKETING DIRECTION
Marketing Scope
Premium full-service restaurant
Features both American and Chinese foods
Operates in big cities
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Marketing Goal
Creates & develops brand awareness & reputation
Expands all over China
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14. STRATEGIC
MARKETING DIRECTION
Marketing Objectives
Revenues: $2.2bil / 20% growth
rate in 3 years
Expands from 3 to 15 restaurants in
3 years
Earns 5% of the market share in 5
years
Enhances relationship with
government, suppliers, etc.
Develops new menu items
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15. OVERALL
STRATEGIC APPROACH
Target customer
Chinese men & women: age 20 - 55, upper-middle
income, well-educated, live in big cities
Western foreigners: expatriates & tourists
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Target competitors
Beijing Little Potato Catering Management
Chongqing Taoranju Catering Culture
Zhongshan Seaport Catering Group
China Quanjude
Inner Mongolia Little Sheep Catering Chain
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16. OVERALL
STRATEGIC APPROACH
Branding and positioning statement
Up-scale, casual dining restaurant chain that features
Western and Chinese foods.
Sales and Channel Strategy
The restaurants
Website
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

17. OVERALL
STRATEGIC APPROACH
Market Entry/Expansion
Strategy
Wholly - owned subsidiary
No licensing
Partner with suppliers
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Core Marketing Strategy
Word-of-mouth strategy
Buzz, Viral, Social Media, Blog,
etc.


18. OVERALL
STRATEGIC APPROACH
Risk Analysis
Cultural difference
Ineffective marketing communication
Intense competition
Risk management
Being aware of threats
Understand and respond quickly
Differentiation
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19. MARKETING MIX
Product localization
•Cut down items in menu
•Add Chinese food
•Reduce dish size
•Support chefs to join culinary contest

20. MARKETING MIX
Premium pricing
1. Find the highest price target customers could afford
2. Markup on sales > 300%
3. Treat branch managers as salespeople
4. Evaluate work in progress monthly and annually

21. MARKETING MIX
Selective distributions
• Traffic malls
• Nice scenery: Top roof or corner
Quality supply chain
• Material Requirement Planning (MRP) to minimize delay
• Just-In-Time (JIT) system to keep food fresh
• Qualified local suppliers and local distributors to reduce costs

22. IMC
Create awareness of value
propositions
1. Use exciting message
2. Execute creative media
• Wrap the restaurant
• Distribute invitation cards
• Spread WOM

23. IMC
Build brand interest and desire
1. Establish sophisticated brand equity
2. Apply PR Marketing
• Gift cards for Chinese icons
• Editorial advertising
• Renren and Weibo

24. IMC
Remind brand values
1. Implement loyalty programs and CRM
• Free sampling on birthday
• Premium gifts
• Member card
2. Focus on interactive marketing
• Official website
• Mobile phone application
3. Launch CSR plans
• Harvest program
• Event sponsorships

25. CONTINGENCY PLAN
Best case
 Growth rate and revenues: more than expected
 Expand to other cities/provinces
Second case
 Growth rate and revenues: lower than expected
 Don’t open new restaurants – Keep 3 restaurants
 OR slow down expansion rate
Worst case
 Fail in Chinese market
 Exit Chinese market
 Go to other countries : ex. Australia

26. CONCLUSION
 China is a potential market
 Cheesecake Factory is developing fast & needs to expand
⇒ Expand to China
Earning:
 $64 mil. USD annual revenues
 & $13 mil. USD annual net income in the 3rd year
Required budget for 1st year
 $15 million

27. REFERENCE
Berggren, D. (2012, February). Enter the dragon – investment risks in China.
Retrieved from http://www.tradingfloor.com/
China's marketing challenges. (2011, April). Retrieved from http://www.bizcomm
unity.com
Cheesecake Factory. (n.d.). 2011 annual report. Retrieved May 30, 2012 from
http://www.thecheesecakefactory.com
Cheesecake Factory. (2006, March). Code of Ethics and Code of Business
Conduct. Retrieved May 30, 2012 from
http://www.thecheesecakefactory.com
Cheesecake Factory official website. Retrieved May 30, 2012 from
http://www.thecheesecakefactory.com
Hoenig, J. (2007). Wise companies prepare for—and minimize their exposure to—
risks when investing in China. Retrieved from https://www.chinabusiness
review.com
Miller, K. (2009). Organizational communication: Approaches and processes.
(5th ed.). Wadsworth Cengage Learning. Boston.

28. REFERENCE
OneSource. (2012, May 30). The Cheesecake Factory Incorporated. OneSource
company summary report. Retrieved from OneSource database.
OneSource. (2012, May 30). The Cheesecake Factory Incorporated. OneSource
corporate overview report. Retrieved from OneSource database.
The Cheesecake Factory Incorporated (NASDAQ: CAKE). (2012, May 29).
Business Wire. Calabasas Hills, CA.
Tan, F. (2011, June). Chinese now spend 41% of their time online on social
networks in lieu of news sites. Retrieved from http://thenextweb.com/asia/
Xia, Z. (2012, January). Chinese regulator imposes stricter rules on TV
programming and advertising. Retrieved from
http://www.screendigest.com/news/