The marketing project of integrated strategic Marketing plan of Muscle Tech

1. MARKETING MANAGEMENT
INTEGRATED STRATEGIC MARKETING PLAN
CHI ZHANG
GSBA 528

2. TABLE OF CONTENT
Title Slide
Executive Summary
3
Situation Analysis
4-10
Competitive Analysis
11-14
Company Analysis
15-27
Recommendations
28-36
Profit/Loss Statement
37-39
Timeline
40
Contingencies
41

3. EXECUTIVE SUMMARY
• MuscleTech (Iovate Health Sciences International, Inc) has announced it has sold a majority of their shares to a Chinese company Xiwang Foodstuffs Co., Ltd from Shenzhen China in June,
14, 2016. So this strategic partnership with well-established consumer products leader Xiwang, we now have the unique opportunity to accelerate our international growth, particularly in the
China market. However, MuscleTech is facing two main challenges in China. One is how to come in China market and get enough market share. Another is how to compete against
competitors in China market.
• The purpose of this business plan is to raise and examine the allocation of $1,800,000 of capital for the development of a unique dietary supplement company that has developed a proprietary
formulation specific for workout, nutrition and diet. These products will be sold as edible bars, capsules, sports drinks, and powders. Muscle Tech, Inc. (“the Company”) is company Xiwang
Foodstuffs Co., Ltd based corporation that intends to sell these products on a recurring basis to the general public. The business will also distribute its formulation directly to TRICORE as our
general agency in China and online stores as well as retailers that specialize in supplement sales. The business was founded in 2016 by Xiwang Foodstuffs Co., Ltd.Recommendations to
increase market share in China Market include:
• Doing market research in China market to seek Chinese target market from July, 2016 to Aug,2016.
• Coming into China market at the end of 2016.
• Building the positioning that is different from others competitors
• Building brand image through ambassadors, billboards and market campaign in China
• Building ten retail stores in Chinese metropolis , such as Shanghai and Beijing before end of 2018
• Increasing almost 30% spending in R&D to produce new supplements which are fit for Chinese consumers
• Doing market testing in Beijing and Shanghai from Aug, 2016 to Nov, 2016
• With our recommendations, MuscleTech,Ltd. will come in China market at the end of 2016 and expect to have 10% market share in Beijing and Shanghai at the end of 2017 year.

4. SITUATION ANALYSIS

5. INDUSTRY INFORMATION
• Industry Definition : Xiwang Food founded in 2007 and based in Shandong
Province, China, Xiwang Food is the leading Chinese player in healthy consumable
oils such as corn oil and flaxseed oil. Xiwang Food has a vast sales and distribution
network, selling its products in more than 85,000 mass merchandise stores and over
2,000 drug stores in China.
• Industry Size:
• $9.5789 Billion Industry (Source:(2016, July , 19) . Retrieved july,20,2016 from
http://quote.eastmoney.com/sz000639.html?from=BaiduAladdin)
• Growth rate: 8.58% (Source:(2016, July , 19). . Retrieved july,20,2016 from
http://quote.eastmoney.com/sz000639.html?from=BaiduAladdin)
• Consolidated revenue in excess of 5 billions
• One of the largest companies in China

6. SUPPLEMENT INDUSTRY
• The cost of healthy is
increasing from 2011to 2015 In
China Market
• The average growth in China:
Almost 32.2% (from 2011 to
2015)
• Sale: total 48226.75 billion
RMB(from 2010 to 2015)
¥558.20
¥856.47
¥1,130.68
¥1,579.36
¥1,903.51
¥2,198.53
¥2,600.00
¥4,000.00
¥-
¥500.00
¥1,000.00
¥1,500.00
¥2,000.00
¥2,500.00
¥3,000.00
¥3,500.00
¥4,000.00
¥4,500.00
Chinese supplement products sale from
2010 to 2021
Sale Billion RMB
保健品洋品牌入市 国内企业该如何破局. (n.d.). Retrieved August 01,
2016, from http://zixun.gr158.com/2016-03-20/222169.html

7. THE CONSUMER SUPPLEMENT INDUSTRY FORECAST
• Industry forecasted almost 5% to 8% up over the next five year period
• More 10 competitors will come into China Market in next five year period
THE SUPPLEMENT PRODUCT MARKET FORCAST
• The market for supplement product has been increasing and expected to continue
• More and more exported products will come into China market

8. Market Trend
1. Increased demands of supplement products:
• More than 19.20% consumers choose to workout at fitness center in
China in 2015 year.
• The percentage of supplement expenditure is 28% in Beijing and
Shanghai
• The huge potential expenditure in China market. Chinese dietary
supplements market exceeded$147 billion. The growth rate is 10% from
2000 to 2014.
• More than 33% Chinese people think that health care is very important
part in their daily life.
• More than 41% of Chinese women focus on diet products. The average
cost of products is $85.97 per month.
2. Increased the number of Fitness Centers
• From 2010s to 2014s, there are 5917 gyms operating in China. More and
more consumers need the supplement products.
Source: Zhanhanming.(June,6, 2015) Chinese nutrition
supplements market analysis. Retrieved july,20,2016 from
http://www.askci.com/news/chanye/2015/06/03/104222rmmg.s
html

9. TECHNOLOGICAL CHANGE
1. Increasing more spending of R&D in China
Market
• Producing the products that are fit for China market
such as flavor, color and ingredients.
• Improving product’s quality
2. Expansion of E commerce Technology
• Building relationship with Wechat, Tianmao and
Tabobao
• Operating O2O platform
Source: Haoqixinribao. (December, 24, 2014) The rate of using
wechat became No. 1 in the world. Retrieved from July, 20, 2016,
From http://www.ebrun.com/20141224/119268.shtml
Source: Haoqixinribao. (December, 24, 2014) The rate of using
wechat became No. 1 in the world. Retrieved from July, 20,
2016, From http://www.ebrun.com/20141224/119268.shtml

10. LEGAL/REGULATORY ISSUES
Regulatory:
• On May 1, 2009, the U.S. Food and Drug Administration (FDA)
issued a warning to consumers to stop using Hydroxycut
products, due to 23 reports of serious health problems associated
with the use of Hydroxycut, and at least one death, and to destroy
any product that they may possess.
Legal:
• The products get Chinese State Food and Drug administration
licenses that products can come in China Market.
• The Chinese legal general agency is TRICORE.

11. COMPETITION

12. COMPETITIVE ANALYSIS

13. COMPETITIVE ANALYSIS CON’D

14. COMPETITIVE ANALYSIS

15. COMPANY ANALYSIS

16. COMPANY ANALYSIS
MUSCLETECH’S BACKGROUND

17. COMPANY ANALYSIS –MUSCLETECH’S
MISSION STATEMENT
MuscleTech | Superior Science. Superior Results. (n.d.). Retrieved August 03, 2016, from
http://www.muscletech.com/

18. COMPANY ANALYSIS -
POSITIONING STATEMENT
For the discerning clients who appreciate high quality ,
effective and health products. MuscleTech provides the
ultimate shopping experience at one of nation’s
premium supplement products companies because of its
great R&D to provide the best products to be fit for
different customers.

19. VALUE CHAIN FOR MUSCLETECH IN NORTH
AMEIRCA
Manufacturer Supplier Distributors
Third Party
Delivery Service
Consumer
O2O Platform

20. INCOME STATEMENT FROM 2012 TO 2014
IN NORTH AMERICA MARKET

21. INCOME STATEMENT FROM 2012 TO 2014 IN
NORTH AMERICA MARKET
2012 2013 2014
$7,850,000 $8,060,000
$13,310,000
0
2000000
4000000
6000000
8000000
10000000
12000000
14000000
1 2 3
INCOME STATEMENT FROM 2012 TO 2014
year Operating Income
Iovate Health Sciences International Inc. (n.d.). Retrieved July 30, 2016, from
http://www.iovate.com/

22. COMPANY ANALYSIS -
CORE COMPETENCES
Muscle Tech’s
core
competence
Strong R&D Strong
Partnership
Superior
Products Product Mix

23. COMPANY ANALYSIS –BALANCED SCORECARD
Vision
To challenge ourselves as we can come
into China market as soon as possible.
Customer Perspective
Review market testing
Respond to customer suggestions
Ensure customer service targets are met
Quantify customer intentions and ongoing use of new
and ongoing programs
Track basket size comparisons with recommendations
to increase
Innovation and Learning Perspective
Ensure proper product in China market
Do market research to find target market in China
Do R&D to produce proper products
Create online service
Operational Perspective
Effectively communicate objectives
Ensure processes are followed and measured
Plan and evaluate financial, operational budgets and
cost budget.
Financial Measures
• Set financial Budget expectations for new product
• Provide accurate reports for thorough review process
• Set financial budget for R&D in new products in China
market.

24. COMPANY ANALYSIS-CUSTOMER PYRAMID IN
CHINA MARKET
Platinum
Gold
Iron
Lead
The young customer whose age is
from 25to 35. They are looking for
high-quality supplements in China
market, especially in Beijing and
Shanghai
The elder whose age is
from 55 to 75. They are
looking for health
supplements in China
market., especially in
Beijing and Shanghai The house wife whose age
is from 28 to 35 . They are
looking for diet
supplements in China
market, especially in
Beijing and Shanghai
The male whose age
is from 40 to 50.
They are looking for
supplements that the
price is low. in China
market, especially in
Beijing and Shanghai

25. COMPANY ANALYSIS-MARKETING MIX
Product/Service
• Wide assortment of high quality items
• Superior customer service
• Produce the products that are fit for Chinese special
requirement, such as flavor, color and ingredients.
Promotion
• Use E-commerce platforms
• billboards
• In –store marketing programs
1. Marketing campaign
2. Cultural and community partnership such as
TRICORE
Place
• Muscle Tech decide to open 5 real-stores in
Shanghai and 5 real-stores in Beijing at the end
of 2018.
• Primarily in Beijing, Shanghai
• Pricing
• Muscle Tech’s pricing reflects both the quality
of product offered to our customers and labor
structure to provide superior service
• Have made investments in gross margins in
effort to provide excellent value in key
commodities

26. COMPANY ANALYSIS-S.W.O.T
• High -Quality products
• Strong partnership
• Increased market trend
• Great senior management
team
• Immune from Economic
changes
• Price Image
• Newcomer in China market
(no brand image)
• No market research in
China market
• Moderate operating cost
• competitors
• E-Commerce platform
• Build relationship with
distributors
• Enough financial budget
• Increased profit margin
from customers
• Increased competition in supplements
product
• Online store competition
• Increased government regulations
• Cost driver prices

27. COMPANY ANALYSIS –EXPANDED S.W.O.T
Maximize Strengths and Opportunities
• Strengthen cooperate with Xiwang Group to
incorporate into China market quickly
• Use enough financial budget to do effective R&D to
produce the high-quality products in China market
• Use enough financial budget to do effective market
research in China market
• Use the market trend to increase profit margin from
Chinses customers.
Minimize Weaknesses and Threats
• Use enough financial budget to expand brand image
such as E-Commerce platform and billboard
• Work to minimize impact of online competition
through online platform and general agency’s
website.
• Organize the excellent market research team to do
market research in China market

28. RECOMMENDATION

29. RECOMMENDATION ONLINE STORE
Primarily, the company will use an online based marketing strategy in order to develop the initial sales of
MuscleTecch, Inc. product line. Individuals will be able to place orders directly through the TRICORE and
MuscleTech official website. Although the expenses of creating these websites become are expensive, in the long
run this will be the most cost effective way to enhance the Company’s return on investment as it relates to its
marketing budget and increase promotion of brand image.

30. RECOMMENDATION CON’D
• Sign five Chinese ambassadors to represent MuscleTech,Ltd. The ambassadors should
be very famous in China
• Seek a stable supplier in China to support the sustainable source
• Build a manufactory factory in China to decrease unnecessary cost such as shipping
fee, tax fee and tariff fee.
• Invest more than three millions dollars on R&D to produce the high-quality product
and proper product for Chinese customers.
• Build ten retail stores in Shanghai and Beijing at the end of 2018.
• Design special product label to prevent customers to buy fake products

31. RECOMMENDATION VALUE CHAIN IN CHINA
MARKET FOR MUSCLETECH
Manufacturer Supplier General agency
in China
Third Party
Delivery Service
Consumer
O2O Platform

32. RECOMMENDATIONS – TARGET CUSTOMERS
IN CHINA MARKET
Platinum
Gold
Iron
Lead
The young customer whose age is
from 25to 35. They are looking for
high-quality supplements in China
market, especially in Beijing and
Shanghai
The elder whose age is
from 55 to 75. They are
looking for health
supplements in China
market, especially in
Beijing and Shanghai
The house wife whose age
is from 28 to 35 . They are
looking for diet
supplements in China
market, especially in
Beijing and Shanghai
The male whose age
is from 40 to 50.
They are looking for
supplements that the
price is low. in China
market, especially in
Beijing and Shanghai

33. RECOMMENDATION-OBJECTIVE
Establish a strong presence among many marketing and sales channels including print, television,
billboards, and online distribution networks.
• Own 10% market share in Shanghai and Beijing at the end of 2017.It is about 4.37 millions people.
• Build a large word-of-mouth referral network through the existing client base.

34. RECOMMENDATION -BUDGET
Total Advertising Expenditure-$740,299
• Outdoor Advertisements: Nangjing Xi Lu in Shanghai and Xidan shopping mall in Beijng. The total
cost is RMB 2,400,000.
• Print: Magazine: Men's Magazine. The total cost is RMB700,000
• Online: Baidu web Banner. The total cost is RMB 1,500,000
• Promotional Materials: Pamphlets, T-shirts and signage. The total cost is RMB160,000
• Ambassadors : Chinese bodybuilding athletes. The total cost is RMB200,000.
• Figure one: Total advertising expenditure is $740,299
Total Export taxes & fees to China - $13,294.71
Total import fees & taxes- $4561.17

35. RECOMMENDATION-BUDGET
Figure 3
Figure1
Figure 2

36. RECOMMENDATION-
MARKETING MIX OBJECTIVES
Product Place Price Promotion
Objectives
Produce the proper high-
quality products in China
market
The real stores will be built
in Shanghai and Beijing at
the end of 2018.
The price be higher than our
competitors because we
provide the high-quality
products to our target market.
Establish a strong presence among
many marketing and sales channels
including billboards, marketing
campaign , and online distribution
networks.
Strategies
Research should start as soon
as possible. From this
research, the three points that
team should figure them out.
• What the flavor taste that
customers like in China
Market?
• What is the favorite color
of product?
• What is the different
ingredients in product s
in China market?
After the market research,
doing market test in Shang
hai and Beijing
This task will eventually be
offered in the majority of our
locations, by the end of of
2018.
Doing market research to
understand what the price is
accepted by our target market.
And whether the price can
bring the profit in long-term
running.
Create official website ,cooperate with
TRICORE to promote our brand image
, create e-commerce platform and
design billboard in Shanghai and
Beijing.

37. PROJECTED PROFIT/LOSS STATEMENT
The Best Scenario
Year 1: 2016
Year 2:2017
Year 3: 2018
The information of data is estimated by
myself
Net profit
increases
70% from
2017 to 2018.
It is better
than average
rate 34%
(from 2012 to
2014).

38. PROJECTED PROFIT/LOSS STATEMENT
Most Likely Scenario
Year 1: 2016
Year 2:2017
Year 3: 2018
The information of data is estimated by
myself
Net profit
increases
34% from
2017 to
2018. It is
equal to
average
rate 34%
from 2012
to 2014) .

39. PROJECTED PROFIT/LOSS STATEMENT
The worst Scenario
Year 1: 2016
Year 2:2017
Year 3: 2018
The information of data is estimated by
myself
Net profit
decrease 2%
from 2017 to
2018. It is
smaller than
average rate
34% (from
2012 to 2014

40. IMPLEMENTATION PLAN
The chart below details the implementation plan for third quarter of 2016 to the the first half year of 2017 for the international and CPG expansion. The MuscleTech
marketing department should take the lead on all of the projects, but with assistance from the strategy and R&D groups.
July Aug Sep Oct Nov Dec Jan Feb Mar April May Jun
Expansion in China
Research background and collect information of China
market
Construction on new stores
R&D for new supplements
Test new products with focus groups
Test existing products with focus groups
Promotions and advertising
Construction on Online official website
CPG Expansion
R&D on flavor, color and ingredients introductions
Expand distribution network
Promotions and advertising

41. CONTINGENCY PLAN
e• Increase new product offering in 2017
• Increase marketing and advertising
• Expand into new market in others cities such
as Guangzhou and Henan.
• Increase distributors in the end of 2017
• Increase investment on R&D to produce more
kinds of products
• Evaluate staffing needs to meet demands
If Expectations are Exceeded
• Increase more capital from Xiwang group
company
• Analyze product portfolio and realign with
local markets
• Scale back expansion plan in other developing
markets
• Analyze product offering and reassess
marketing campaigns
• Determine whether increased promotional and
advertising efforts will meet financial goals
If Expectations are Not Met