Oasis Living Final v10b Complete

MKTG 1064 Global Marketing Group Assignment
Executive Summary
Due to the rapid globalisation and a ever changing dynamic economy, there are plenty of
opportunities for organisations to seek for. In order to remain competitive within its
industry, Oasis Living has to constantly adapt to the changes and capitalise on existing
opportunities in order to survive (Shapiro 2008).
The objective of this report is for Oasis Living to establish opportunities for new market to
pursue. Potential markets were chosen using PEST (Political, Economic, Social, and
Technological) analysis to assist us in determining which country and city is the most
favourable for Oasis Living expansion plan.
Using the Porter’s five forces model, it reflects that the industry is fairly attractive positive
and there are no known factors threatening the company's profitability and sustainability.
Lastly we analyzed Oasis Living mode of entry strategy and each of its marketing mix in
order to formulate recommendation and determine how these factors and strategies will
affect and contribute to the expansion plans of Oasis Living into Shanghai .
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1.0 Introduction
Oasis Living was founded by Yong Lee Cloth Merchant Pte Ltd and Europa Interiors (S)
Pte Ltd 2006. It is a premium lifestyle brand which delivers beautiful decorative bed linens,
cushions and towels with uniquely designed fabrics to match the exquisite taste of
customers. At Oasis Living, all products are crafted using a choice selection of deluxe
fabrics complemented with the most excellent finishing and attention to details.
Oasis Living seeks to provide customers with solutions to decorate and enrich functionally
and aesthetically their living areas. The products which they produce for retail sale are
ensured with unique designs, style, quality and comfort. In order to achieve such high
standards of quality, Oasis Living employs a skilful team of people dedicated to produce
quality products with the finest finishing and final touch.
In 2007, Oasis Living launched the Oasis Living Gallery at No. 3 Ubi Crescent which
displays both retail and custom made collections all under one roof to provide greater
convenience to their customers and made their first overseas expansion to Malaysia.
2.0 Macro-Environmental Research
China, Spain and Russia were selected to be the three targeted countries that Oasis Living
could further expand into as there is greater market growth potential and opportunities
among these three nations’ textile and garment industry. According to World Bank (2010b),
they are rank well ahead of Singapore in terms of Gross National Income (GNI) and Gross
Domestic Product (GDP). In addition to that, China and Russia are categorised as emerging
country while Spain is a developed European Union member.
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2.1 China
China’s retail market has rapidly continued to develop over the past few years. New
networks of chain store, shopping malls are now emerging not only in the three busiest
cities such as Beijing, Guangzhou or Shanghai but also other rural cities. This has not
only bring in an annual average growth rate of 17.25% representing RMB6.81 trillion but
also the importance of a more robust domestic consumer retailing market which is expected
to reach a total value of RMB10.8 trillion by growing about 45% between 2010 and 2014
(Access Asia 2010). Despite the fact the global recession has affected the Chinese
economy's short-term prospects, it is predicted that the textile and garment industry will
benefit from the significant economic growth of china over the next two years (Business
Wire 2009).
2.2 Russia
Russia has been regarded as one of the emerging economy after China in recent years
(Economist 2008, Stefanovic 2009). Domestic demand for textile and garment industry had
grown despite the fact that the rouble had strengthened compared to a year ago, indicating
that people are now spending more moderately and focusing more attention to the
difference in price and quality between local products and imported goods (Interfax 2010)
2.3 Spain
Since the last decade, there is strong performance both in terms of output growth and
employment from the Spanish economy where the GDP grew at a stable rate after joining
the European Community in 1986 (Sosvilla-Rivero & Herce 2008, Farr & Vella 2008).
Although the economic crisis in 2009 had hit almost every country on the planet, GDP
growth for Spain is expected to begin to recover modestly in the second half of 2010 from
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-1.1% to 1.7% in 2013 where consumer confidence and private consumption should
gradually improve by then (Economist Intelligence Unit 2009).
2.4 Analysis of Selected Countries
The selected countries namely: China, Russia and Spain will be analysed based on their
individual political, economical, social-cultural and technological factors. For each factor, 3
points will be allocated to the most attractive country, followed by 2 points for the lesser
attractive country and 1 point for the least attractive county. Subsequently, the country with
the most total points will be chosen for the expansion plan. Table 1 below illustrates an
analysis of the three counties chosen.
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Table 1: Analysis on China, Russia and Spain

Points Points Points
Political Factors China Russia Spain
Given Given Given
Corruption
Perception Index (out
of 180 countries). This
is to ensure that it is
easier to set up
operations without Ranked 72nd Ranked 147th in Ranked 28th in
2 1 3
facing issues of 2010 2010 2010
bribery and abuse of
resources
(Transparency
International 2008)
Global
Competitiveness
Index (out of 134 Ranked 29th
countries). This is to in the Ranked 63rd in Ranked 33rd in
measure the ability of Global the Global the Global
countries to provide Competitive 3 Competitiveness 1 Competitiveness 2
high levels of ness report report of report of
prosperity to their of 2008/2009 2008/2009
citizens (World 2008/2009
Economic Forum
2009).
Country Risk
Rating / Business
A3 / B 2 C/B 1 A3/A1 3
Climate Rating
(Coface 2010).
Taylor Wessing
Global Intellectual
Property Index (out
24th 1 21st 2 13th 3
of 24 countries)
(Taylor Wessing
2009).
Index on Ease of 89th 2 120th 1 62nd 3
Doing Business (The
5
World Bank Group

2010a)
Strength of Investor
Protection Index
5 - 5 - 5 -
(The World Bank
Group 2010)
Economic Factors China Russia Spain
Given Given Given
Gross Domestic
Product (GDP)
Estimated
Growth in 2009 Estimated -7.9% Estimated -3.6%
8.9% 3 1 2
(Central Intelligence growth growth
growth
Agency 2009)
Stability of Exchange
1.00 SGD =
rate (relevant to 1.00 SGD = 1.00 SGD =
2 21.345R 3 1
Singapore dollar as on 4.854 RMB 0.51EUR
UB
1st March 2010 (XE
2010)
US$153.54
Billion
US$13 Billion
Total FDI Inflow in (US-China US$6335
3 (European 2 1
2005 Business Million
Commission
Council (Gobierno de
2010)
2008) España 2010)
US$328
US$2.03 US$1.38
Gross National Billion
Million Million
Disposable Income in (DGBAS 3 2 1
(OECD 2009) (OECD 2009)
2007 2010)
Social-cultural Points Points Points

China Russia Spain
Factors Given Given Given
Population of 3 71.5% 2 67.34% 1
Residents Aged 15- 72.1%
64 as per 2010
6
(Central Intelligence
Agency 2009)
Literacy Rate
(age 15 and over that
can read and write) 90.9% 1 99.4% 3 97.9% 2
Agency 2009)
Technological Points Points Points
China Russia Spain
Factors Given Given Given
Number of Internet
Hosts 14.156
3 7.663 million 2 3.537 million 1
(Central Intelligence million
Agency 2009)
Number of Internet
Users
298 million 3 45.25 million 2 25.24 million 1
Agency 2009)
Total Score China 28 Russia 23 Spain 24
Table 1: Analysis of 3 Countries Selected
Based on the table above, China has proven to be the country embedded with better
opportunities for Oasis Living’s expansion as most of the PEST factors that the company
has emphasized are proven to be better rated in China. In addition to that, China and
Singapore's culture and spoken language are somewhat similar to each other.
3.0 City Selection
As China consists of numerous cities and provinces, we have decided to select a major city
in order to penetrate into the Chinese market as Oasis Living initial expansion plan.
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3.1 Shanghai
Shanghai is the largest city in China, with an estimated population of 20 million. Described
as the world’s fastest growing economy, Shanghai is known as the largest centre of
commerce and finance in China (Harbach et al 2010). The city has hosted various world
events, with the upcoming Shanghai Expo 2010 which will tremendously attract necessary
businesses. The city also hosts a concentration of manufacturing activity in key industries
such as automotive, electronics, telecommunications, machinery, textiles, iron and steel,
and petrochemicals. With its advantageous geographical location in the eastern side of
China, it has the most heavily trafficked trade ports, allowing easy access to the global
world (Nie & Xin 2009).
3.2 Beijing
Beijing is the capital city of the China, and the country's political and cultural centre.
Beijing boasts an excellent transportation hub, with railways and roads linking to other
cities in China. It is also the focal point for all international flights to China. Beijing is a
combination of both traditional and modern prosperity, as being one of the world’s largest
ancient cities and the housing numerous institutions and research centre, and countless
shopping malls, providing a modern international outlook (Harbach et al 2010).
3.3 Guangzhou
Guangzhou, capital of Guangdong, is the largest and most flourishing industrial and foreign
trade centre in Southern China. Being an excellent port on the Pearl River navigable to the
South China Sea, Guangzhou has fast accessibility to Hong Kong and Macau. Being one of
the first cities to benefit from China’s Reform and Opening Up policy since 1978,
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Guangzhou acts as the pioneer of economic development of the country, with thousands of
large, small and medium-sized enterprises, which offer more job opportunities and making
the city a heavily populated area (Travel China Guide 2010). The city is also the political,
economic, cultural, and technological and transportation centre of Southern China and the
open coastal city is famous for being an example of a comprehensive reform experiment
area within China.
Table 2: Analysis on Beijing, Shanghai and Guangzhou

Criteria Beijing Shanghai Guangzhou
Given Given Given
Total Retail Sales
by Province $327.35 $355.07
2 3 $314 Billion 1
(RMB) [2009] Billion Billion
(Access Asia 2010)
Population [2010] 17.55 2 19.2 3 3 Million 1
(China Knowledge Million Million
2010)
Average Annual $7,064.21 2 $8,112.55 3 $6,284.17 1
Disposable Income
of Urban
Household (RMB)
[2009] (China
Knowledge 2010)
Total GDP (RMB) 1,148.44 2 1,477.87 3 $900 Billion 1
[2009] (Access Billion Billion
Asia 2010)
GDP per Capita $68,788 1 $71,873 2 $81,232 3
(RMB) [2009]
(CNA 2010)
Cost Of Starting a 3.2 2 4.8 3 6.3 1
Business [% Of (Doing (Doing (Doing
Provincial GDP Business Business Business
Per Capita] 2008a) 2008b) 2008c)
9
Ease of Creating 12th in 1 1st in 3 2nd in China 2

and Registering China China
Collateral
[Ranking] (Doing
Business 2008)
Ease of Enforcing 9th in 1 4th in 2 1st in China 3
Contract China China
[Ranking] (Doing
Business 2008)
Time Required to 37 Days 2 35 Days 1 28 Days 3
Register and Start
a Business [Days]
(Doing Business
2008)
Consumer Price 98.4 2 99.5 3 97.4 1
Index (CPI) [Nov
2009]
(NBS China 2009)
Beijing Shanghai Guangzhou
Total Points 17 26 17
Table 2: Analysis of 3 Cities Selected
From Table 2 above, it is obvious that Shanghai obtained the most points with regards to
the factors mentioned. With more people wanting to living in the city, demand for the real
estate industry is booming, and the population in Shanghai will increase. As such, there will
be a big market for Oasis Living to expand its business into Shanghai.
4.0 Shanghai’s Bed Linen Retailing Industry Attractiveness
The analysis of Porter’s five forces (Figure 1) will reflect how attractive Shanghai’s bed
linen retailing industry is for Oasis Living expansion plans.
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Figure 1: Porter’s 5 Key Forces (Adapted from Friend.G & Zehle.S, 2009, Guide to Business Planning,
Profile Books.)
4.1 Threat of new entrants (Moderate)
Threat of new entrants is relatively high as free trade is encouraged between Shanghai and
various countries. Aside from foreign investors, Oasis may also face new competitors in
terms of their Chinese suppliers who integrate forward by setting up a retail business to
compete with them and sub vendors having home-based business in the same industry.
4.2 Bargaining power of suppliers (Relatively Low)
A search online has enable us to discover a vast number of suppliers in Shanghai, whereby
they are able to provide Oasis Living with the fabrics required and the manufacturing
process (Textile Center 2010). Oasis Living will be able to obtain their supplies of products
from different various suppliers or sources, and there is low switching costs should there be
an unsuitable supplier. Thus, the power of suppliers is relatively low as there are many
suppliers that are readily available to supply raw materials.
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4.3 Bargaining power of buyers (Moderately High)
As the quality of linen depends on thread counts and material used, bed linen is not usually
considered a luxurious product. It can be considered as a seasonal product as people rarely
change their bed sheets except for seasonal changes, in this case, winter season in China.
To add, bed linen retailers do not have offer any loyalty program that reward their
customers for frequent usage of products. Hence, there is virtually zero switching cost. Due
to low switching costs and relatively little differentiation in bed linen, buyers have
relatively high bargaining power.
4.4 Threat of Substitute products (Non-existent)
As there is not much substitute products available for bed linen; therefore threat of
substitute products is relatively low.
4.5 Intensity of rivalry among competitors (Moderately High)
As bed linen business is a perfect competition business, intensity of rivalry among
competitors is moderately high as a search on Alibaba.com shows up hundreds of different
bed linen retailers in Shanghai. Retailers in this industry will have to compete against the
quality, services and product design in order to differentiate itself.
5.0 Target Market
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Oasis Living's target market can be evaluated in which the company focuses on marketing
its products and services to middle income individuals within the age group of 18 to 34
years old in Shanghai. They are chosen due to the factors listed below.
5.1 Demographics
According to Shanghai Statistics Bureau, Shanghai has a population of 18.88 million in
2008. (Shanghai Statistics Yearbook 2009). Based on Figure 2 below, we estimate that
Oasis Living's target market makes up of 44% of the overall population in Shanghai.
Therefore, the target market is attractive as this constitutes for more than half of the
population.
Figure 2: Adapted from: Statistical Year Book, 2009
5.2 Psychographics
A research has showed that foreign brands tend to do well with younger consumers and
individuals living in more affluent cities, especially in Shanghai, Beijing and Guangzhou.
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With rising income level among the targeted consumers has given them the purchasing
power and opportunity to try new products, especially foreign brands. Stronger foreign
exposure is also the contributing factor for them to be more familiar and willing to choose
foreign products (Access Asia 2010).
In addition, consumption needs in China is diversifying further, as consumers tried their
best to fully reflect their unique style and establish their individuality and unconventionality
through their outward appearance and home decoration (Hong Kong Trade Development
Council 2010).
5.3 Buyer Behaviour
Due to rapid urbanization, more people are moving from other parts of China to live in
Shanghai, which result in rising family unit and housing area (Messe Frankfurt 2010).
Consumers are investing more of their money in buying houses and other long-term
investments (cars and insurance policies), rather than retail products (Access Asia 2010).
They are also spending more on services and non-retail consumption. To add, they are
buying into leisure and lifestyle, making them more image conscious and as a result, more
brand conscious. Price is no longer the first factor to consider upon their purchase.
Instead, they are demanding of high quality at a good price.
According to a survey conducted by the China Home Textile Association, 82 percent of the
Chinese are willing to purchase new home textiles items for house decoration (Messe
Frankfurt 2010). With an increase in the purchase of houses, there is indeed a bigger market
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for Oasis Living, as bed linen is one of the essential products which most consumers will
first purchased for their houses.
5.4 Market Positioning of Oasis Living
X Aussino
Price X Oasis Living
X Friven
X Shanghai Hometex
Low
Low Quality High
Figure 3: Adapted from: Dowling 2004
As mentioned in Figure 3, there are many bed linen retailers in the country. The targeted
market of Oasis Living is not afraid to spend more money so long as the product is of good
quality and have the ability to keep them comfortable and warm.
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As such, Oasis Living should continue to position itself as a premium lifestyle brand,
selling high quality product at a reasonable price. Needs of consumers are focused as
product design and quality can be accustomed according their requirements, at a reasonable
price.
Since Oasis Living is set up by 2 separate companies with different expertise, they indeed
have an advantage, in terms of track and experience, over other similar retailers in the
industry.
6.0 Market Entry Strategies
Considering the attractiveness of the bed linen retailing industry in Shanghai and the culture
characteristics of Chinese, it is essential to decide which market entry strategy is the most
appropriate for Oasis Living to adopt in order to enter Shanghai, and thereafter other
regions in China.
6.1 Modes of Entry Shortlisted
As such, Joint Venture, Contract Manufacturing and Wholly-own Subsidiaries (Greenfield)
are considered.
Table 3 below shows a list of advantages and disadvantages of each entry mode.
Table 3: Advantages and Disadvantages of Different Type of Entries

Mode of Entry Advantages Disadvantages
Joint Venture • It enables Oasis Living to obtain capital, • Oasis Living needs to pump
technology as well as local society and in more capital, which will
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government support easier, thus its own

capital expenditure and manpower is
greatly reduced.
• It provides a greater flexibility, in terms result in higher risks.
of management and its financing, to • Both parties involved do
arrange better business relationship in a not have the autonomy of a
way that benefits both parties. sole proprietorship in the
• Oasis Living need not set up a new decision making process.
corporation in China, as both Oasis • Due to cultural differences
Living and its Chinese partner do business and profit sharing issues,
using the Chinese business license under a valuable time will be
cooperative and contractual agreement. wasted to settle an
This will allow both parties to focus on argument. Therefore,
their business specialty. importance of using correct
communication techniques
• It allows Oasis Living to enjoy high is emphasized.
degree of marketing control which would
shorten time taken to obtain local market
information.
• Oasis Living can sub-contract the • Oasis Living may face
manufacturing of their products to the difficulties in finding a
local Chinese manufacturers in suitable manufacturer as
accordance to their requirements. there are too many textile
Contract • Oasis will still be having the rights for the companies in the industry.
Manufacturing sales of their own products, which enable • Oasis Living may have to
them to control the market. share profits with them
• Oasis Living can reduce capital • The manufacturer may
investments and investment risks, while become a key competitor
maintaining its core competencies. when the contract ends.
Wholly-own • Oasis Living will have the autonomy and • The absence of local
subsidiaries independence to carry out global participation may deprive

strategies of its parent company without Oasis Living of important
(Greenfield
having to consult their Chinese partners social and political
Operations) • Oasis Living will has full control over connections.
management and production quality and • More time and effort will
profit distribution so long as the legal be spent to hire trained
limitations are fulfilled. professionals and to create a
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sale network.
• There will be a higher risk
due to higher investment
involved.
Source: Starmass Online 2010
All three modes of entry stated above are feasible to be utilised by Oasis Living to enter the
Shanghai market in China and they will be further analysed as shown in Table 4 below. The
analysis will reflect both the advantages and disadvantages of the three methods separately
in order to determine the best entry mode for Oasis Living in order for them to make their
first step into China’s market.
6.2 Assessment of Entry Mode based on Specific Criteria
Contract Wholly Owned

Joint Venture (JV)
Manufacturing Subsidiary (WOS)
Decision
Score Score Score
Weight
Criteria
Rank (Rank X Rank (Rank X Rank (Rank X
Weight) Weight) Weight)

Control of
3.0 1 3.0 3 9.0 2 6.0
Business
Profits
2.0 1 2.0 3 6.0 2 4.0
Earned
Risks
2.0 3 6.0 1 2.0 2 4.0
Involved
Costs
1.0 2 2.0 1 1.0 3 3.0
Involved
Flexibility in
Adapting to 0.5 3 1.5 1 0.5 2 1.0
Changes
Commitment
0.5 2 1.0 1 0.5 3 1.5
to business
Total 10.0 12 15.5 10 19.0 14 19.5
3 = Most Favourable, 2 = Favourable, 1 = Least Favourable
Table 4: Assessment of Entry Mode based on Specific Criteria
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In order to determine a more favourable entry method that would be in line with Oasis
Living’s strategic direction, based on Table 4 above, weight scores were allocated to reach
criterion based on its level of significance towards Oasis Living in setting up a business in
Shanghai. Hence, it is apparent that wholly owned subsidiary (WOS) is more appropriate
for Oasis Living during its initial stage of investment in China.
6.3 Short-term Market Entry Strategy: Wholly-Own Subsidiaries (Greenfield)
Oasis Living is solely responsible for providing all resources (capital, technology) required
in order to enter the Shanghai market via this strategy. Most importantly, Oasis Living will
have the full control of management and profits need not be shared with any Chinese
partners.
A retail space counter will be rented in Qi Bao Shopping Mall, one of CapitaLand mall in
Shanghai, as an initial market analysis for Oasis Living. As mentioned above, with low
bargaining power of suppliers, Oasis Living will have little difficulty in finding a suitable
local manufacturer to provide supplies. To ensure successful penetration into the market,
Oasis Living can tap on the incentive programs on capability and market development
provided by the Singapore government whom are assisting local Small Medium Enterprises
(SMEs) for overseas expansion (IE Singapore 2010).
With government incentive program and the lower labour costs in Shanghai, capital
expenditure required by Oasis Living will be greatly reduced, and therefore, investment risk
will be indirectly reduced. In addition, with rapidly evolving regulations in Shanghai to
cater the increasing demands of the Chinese economy, Oasis Living will not have
objections from the Chinese government (Anonymous 2002).
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6.4 Long-term Market Entry Mode: Joint Venture
After exposure to the Chinese market via Wholly Own Subsidiaries (Greenfield) and
gaining substantial amount of market share within 3 years, Oasis Living will be equipped
with in-depth knowledge regarding aspects in relation to running an outlet in Shanghai. To
add on, the list of suitable manufacturers and loyal customers gained within 3 years will
provide critical information for further possible expansion opportunities.
In turn, this will become a competitive advantage in search of a Chinese partner for the
joint venture, whereby it is a more convenient way of obtaining resources and building
relationships with the Chinese partners (Anonymous 2002). In an industry where rivalry
among competitors is high, having a Chinese partner will help Oasis Living to ease the
impact of environmental uncertainties by providing local knowledge and network
resources. This, in turn, will enable Oasis Living to gain more awareness with regards to
different consumer behaviour and gain higher brand recognition in the market (Chan
2003). Earnings, risks and losses will be shared among both investors as specified in the
contract.
However, Oasis Living will need to take note of limitations of such approach. In the long
run, should the contract ends with the Chinese partner, the company may become a key
competitor in the same industry. Thus it is essential for Oasis Living to maintain good
relationship with the Chinese and its stakeholders.
Therefore in the long run, entering other areas of China through Joint Venture will be a
more feasible strategic idea in comparison to other entries.
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7.0 Marketing Mix Recommendations
7.1 Product
Bed linen from Oasis Living is positioned as a specialty good, one that is of higher price,
and notable quality. As things are much cheaper in China, it would more cost effective for
Oasis Living to find local suppliers than to import materials from Singapore or overseas
(Runckel & Associates 2010).
Duration Objectives Strategies

Short Term • To introduce, create • Provide standardised,
Phase 1-2 awareness and consistent, superior
market Oasis and quality products.
Living’s brand and
bed linen services to
Shanghai. .
Long Term • To become the • To develop a top
Phase 1-3 favourable brand and management and
ideal choice of marketing team that
luxury bed linen in keep in trend with the
Shanghai and beyond ever-changing
by offering more customers' needs and
variety and choice. desire by providing
excellent services
Table 5: Product strategy and objectives
7.1.1 Three Levels of the product
The core product offer through Oasis Living bed linen is comfort and sense of luxury
feeling that is exclusive and not easily available from other retailing brands. The actual
product is bed linen made from quality textiles, made from the finest 500 thread count
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100% cotton sateen and exclusive designs where quantity of each design is limited (Oasis
Living 2010).
The custom made collection features bed linen, bed cover and cushion customized to match
customers’ exquisite tastes. Customers can choose from a selection of fine fabrics and
Oasis Living promises outstanding workmanship to meet their customers’ distinct
requests. The augmented product Oasis Living offers is post-purchase service, where staff
can advise customers on how to best care for their bed linen either during purchase or after
purchase through phone call enquiry. Staff can also make suitable recommendations to
individual customers based on their needs or preferences. (Oasis Living 2010).
7.1.2 Product Range
Oasis Living offers two main bed linen categories, luxury and casual. Several ranges will
be offered at a later period to appeal to customers of different dispositions. Luxury
items offered by Oasis Living consist of intricate designs and a combination of quality
textures like silk and linen. Casual refers to linen with simple chic design and comfortable
for everyday use nonetheless accompanied by affordable price. Another approach is to
develop certain themes for different times of the year, or for different events for example,
Lunar Chinese New Year (Dunne & Lusch 2008).
7.1.3 Product Design
Oasis Living can work with its parent company, Yong Lee Cloth Merchant Pte Ltd and
Europa Interiors Pte Ltd in the Research and Development (R&D) of new textiles and
design (Oasis Living 2010). Oasis Living’s current designs are mostly European-focus
therefore Oasis Living may also consider working with the China textile designing centre
22
so that they could inculcate Asian themed designs to cater for the Chinese consumers in
China.
7.1.4 Competitive Environment
China is the third largest country for luxury goods consumption and this had been
forecasted to grow as the Chinese willingness to spend on luxury goods is increasing
(www.lifestyleasia.com, 2008). Furthermore, Shanghai is one of the richer cities in China
whereby citizens are having higher disposable income (Runckel & Associates 2010).
Hence, it has become an attractive location for many novelty goods provider. The number
of specialty goods providers entering the China or Shanghai market is rising, creating tough
competition. Thus, to have a competitive edge over the others, Oasis Living must market
their products in order to create a strong, favourable brand image and name to its target
market (Hollensen 2007).
7.2 Promotion
7.2.1 Objectives and Strategies
Advertising objectives can be categorised according to what the company’s mission is. It
can be to inform, persuade, remind or reinforce consumers (Kotler 2004). Since Oasis
Living is a new and unknown brand in China, promotions will be introducing the brand and
products to our target audiences, convey the brand image, and the difference of our
products. We will use an intercept strategy, whereby we planned to tap into the channels of
communication where these consumers are most familiar with (Kotabe et al 2008). Our
promotions will be cost effective, achieving maximum effect with a reasonable budget.
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Oasis Living will use bundle pricing as promotion strategy, in order to gain brand
recognition in China where fierce competition are numerous. Thereafter, competitive
pricing will be adopted, setting its prices around market average for the same category of
product.

Short Term * To create awareness and to * Employ pull strategies to
Phase 1-2 influence prospective create awareness and instil
customers to shop at Oasis demand among consumers.
Living
Long Term * To promote Oasis Living * Establishing integrated
Phase 2-3 as a retailer that offers top marketing communications
grade bed linens and mix strategies through usage
services at reasonable prices. of marketing tools such as
public relations and
advertising.
Table 6: Promotion strategy and objectives
7.2.2 Advertising in Luxury Magazines
The affluent in China are highly knowledgeable about luxury brands, and one source of
their information is luxury magazines (Kotabe et al 2008). One prime magazine to consider
is Prestige. Prestige is a magazine for the affluent and upward mobility in China especially
in Hong Kong and Shanghai. Prestige also benefits from a wealth of luxury brands looking
for avenues to advertise. Established in 2005, the glossy lifestyle and society magazine
targeted at Shanghai’s affluent readers has become one of the city's most popular
publications (www.lifestyleasia.com, 2008). Advertising in luxury magazines allows us to
reach out directly to our target customers, and send a strong image about the brand (Kotabe
2008).
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7.2.3 Advertising Through Media
Media and television are the two important mediums of advertising (Hollensen 2007). It
permits Oasis Living to reach great numbers of people on a national or regional level. It
helps build an image for Oasis Living to the targeted audience. Oasis Living can advertise
its products by using Chinese celebrities as their ambassadors such as Jackie Chan to get
viewers attention. The reason behind the popularity of celebrity advertising is the
advertisers' certainty that the brand image will be built through the use of celebrities to
achieve a high extent celebrities achieve a higher degree of attention and recall for
consumers, which will eventually lead to higher sales (Hollensen 2007).
7.2.4 Sales Promotion
The purpose of sales promotions is to provide good value, unique services and rewarding
experience to customers (Hollensen 2007). Sales promotions such as, discounts and
rebates can be offered to customers periodically. Personalized services, such as membership
benefits and special discounts may be effective to increase the number of loyal customers,
as well as develop a long-term relationship with them. (Kotabe et al 2008)
7.3 Pricing
7.3.1 General Pricing objectives and Criteria
The main pricing objective for Oasis Living bed linen is quality leadership (Table 7), using
the price as an indicator for top quality goods (Hollensen 2007). Oasis Living will be a
upmarket brand image where more emphasis will be given to quality products rather than
on price. To uphold this image, Oasis living will not resort to artificially lowering its prices
(Kotabe et al 2008). Cutting prices too drastically will not only lead customers to question
the level of quality but also image of brand. Being an exclusive product, Oasis Living will
25
need to assure its consumers of the quality therefore consumers who demand quality are
prepared to pay a reasonably high price for Oasis Living products (Dunne & Lusch 2008).
The stage of the company start-up process in China is another criterion in determining
prices. Other additional costs such as distribution are also considered in the final price.

Short Term * To establish the firm’s * Psychological Pricing
(within 3 years) brand image in Shanghai as Strategy and Quality
a quality luxury bed linen Leadership approach.
manufacturer.
Long Term * To gain a substantial * Value-Based pricing
(After 3 years) market share and endeavour approach and Psychological
to become the leading bed Pricing Strategy
linen manufacturer and
retailer within Shanghai.
Table 7: Pricing strategy and objectives
7.3.2 Pricing Method
A value-based pricing method will be used. The luxury line will be priced competitively,
comparable to the market prices of quality bed linen (Hollensen 2007). In Value-Based
pricing, the buyer’s perception of value is the key to pricing. Oasis Living will fix the target
price of luxury bed linens based on its customer perceptions of the product value and brand
image (Kotabe et al 2008). Some consumers place great value on the intangibles they
receive from the product such as its quality (Kotler 2004). Hence, in addition to adopting a
Value-Based Pricing, Oasis Living will offer a combination of high quality exclusive linen
coupled with an emphasis on every sales executive to promote excellent after sales service
to every customer.
7.3.3 Price Discounts
26
The listed price for the products will not be changed, but discounts can be given at
appropriate times such as seasonal sales or prior to the Lunar Chinese New Year. Since the
type of demand for bed linen will vary over seasons, Oasis Living can offer seasonal
discounts to reduce the impact of seasonal variation on sales (Dunne & Lusch 2008). This
also helps to clear existing stocks from the previous season so that Oasis Living can free up
its inventory space for new stock (Dunne & Lusch 2008). Oasis Living can also give special
discounts to walk-in customers who visits their gallery.
7.4 Place
Place refers to a location whereby the products are easily accessible for an exchange to take
place (Kotabe et al 2008). In framing out the buyer behaviour analysis, our target customer
will most likely visit upmarket shopping districts in China to make purchases. Location of
point of sale also depends on the strategic partner chosen (Dunne & Lusch 2008). We has
chosen Qibao Mall in Shanghai which was set up by CapitaRetail China Trust, a real estate
investment trust of Capitaland as Oasis Living first store based retail space counter. Qibao
Mall is located in Minhang district, a growing mid to high end residential locality to the
west of Shanghai Central Business District. The mall is positioned as a one-stop family
shopping destination, providing shopping, dining, entertainment options and services for
the middle-class residents living in the vicinity (Capital Retail 2010).

Short Term * To gain market share and *Select a strategically
Phase 1 making use of reputable prominent retail mall with
retailing malls as Oasis numerous well known
Living is relatively new. brands that portrays a
upmarket image.
Long Term *To locate suitable sites for *Expand distribution once
27
Phase 2-3 future expansion plans brand name is established

(After 3 years) within China. and well received.
Table 8: Placing strategy and objectives
7.5 Marketing Mix Conclusion
Once Oasis Living has successfully built a reputable name for itself in China and a sizeable
customer database, it may look into joint venture with other textile company in China while
also introducing more of its products and services. The future of Oasis Living store located
in China would push it competitive edge up another level and act as a prototype before
further expansion.
8.0 Implementation Plan
The Implementation plan shown in Figure 4 will be divided into three separate phases.
These are the preparation phrase which will last from May 2010 to April 2011, the
implementation phrase which will last from May 2011 to April 2012 and the evaluation
phrase which will last from May 2012 to April 2013. Below are the key marketing
strategies drawn out in a GANTT chart showing the important activities from 1st May 2010
to 31st April 2013.
28
Phase 1 - Preparation Phase

May-Aug 2010 Sep-Dec 2010 Jan-Apr 2011
Hold a General Meeting to
explain expansion plan to staff
×
Organize programs to prepare
× × ×
employees for change
Set company’s goal and convey
× × ×
it to the staff
Prepare a management team who
× ×
will lead operations in Shanghai
Organise training to make sure
× × × ×
management team are well
versed in speaking Chinese and
understanding the culture there
Prepare all the necessary
× × × × × ×
documentation required to start a
retail space counter in Shanghai
Negotiate with the shopping
× × × × × × × ×
centre in Shanghai for support
Advertisements to be displayed
× × × ×
in Shanghai to begin promoting
the brand
Phase 2 - Implementation Phase
Advertise in newspapers, internet
× × × × × ×
and magazines
Advertisements on radio and
× × × × × ×
television
Regular visits to the counter by
× × ×
upper management to ensure
operations are on track
Monthly review (Ongoing)
Phase 3 - Evaluation Phase
29
Conduct a survey to find out how

× × × ×
to improve the business
Begin collecting and analysing
× ×
customer feedback
General meeting to review if
×
objectives have been met
Staff brainstorming session to
× ×
analyse data and find out what
improvements can be made
Begin plans on considering
× ×
whether it is feasible to open
more retailing space counters in
other cities or countries
Figure 4: Implementation plan
9.0 Proposed Budget
9.1 One-Time Start-Up Cost Estimates (1 retail space counter)
1 SGD = 4.73 RMB (Untied Overseas Bank 2010)
Activities Cost (RMB) Cost (SGD)

Business Fixtures, RMB 120,000 $25,370
Equipment and
Installation
Decorating RMB 60,000 $12,685
Starting Inventory Cost RMB 70,950 $15,000 (300 sets at SGD
$50 each)
Office Supplies RMB 1,600 $338
Utility Deposits RMB 3,000 $634
(3 month advance utility
fees)
Legal Fees RMB 8,000 $1,691
(Fees paid to legal advisor
and lawyer)
Licenses and Permits RMB 800 $169

Insurance RMB 40,000 $8,457
30
(Fire and safety Insurance)
Initial Advertising Cost RMB 160,000 $33,827

(TV advertisements,
Newspapers, Public
Relations, Magazines, etc)
Petty Cash RMB 1,200 $254

(Cash to reimburse
stationeries and office
supplies)
Total One-Time Start-Up RMB 465,550 $98,424
Costs
Table 9: One time start up costs
9.2 Monthly Expenses
Activities Cost (RMB) Cost (SGD)

Employee Wages
Store Manager (x1) RMB 8,000 $1,691

Sales Executives(x3) RMB 18,000 (excluding $3,805
commission)
Rent RMB 15,000 $3,171
Utilities RMB 1,066 $225
Insurance RMB 3,332 $704
Advertising RMB 12,000 $2,536
Total Monthly Expenses RMB 57,398 $12,132
Table 10: Monthly costs
10.0 Conclusion
31
Due to the small market in Singapore and the effects of rapid globalisation, Oasis Living
has no other alternative but to explore market potentials abroad in order to expand its
business so as to remain competitive within its industry. There is a high chance that Oasis
Living will be successful in entering the bed linen industry market in Shanghai, China. This
is due to the country’s healthy and vibrant retail industry which boasts the greatest market
potential as compared to any other country, mainly because of its more than 1 billion
potential consumers. In addition, Shanghai has a relatively stable government and economic
policy. Furthermore, there is market potential in Shanghai as it has a moderately attractive
industry for luxury goods. Together with the implementation of a good marketing mix,
Oasis Living will likely be able to enjoy much success by expanding into the bed linen
market industry in Shanghai.
11.0 References
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< https://www.cia.gov/library/publications/the-world-factbook >
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COM_en_EN/pages/home/risks_home/business_climate >
Directorate General of Budget, Accounting and Statistics (DGBAS) of Executive Yuan

2007, viewed 19th March 2010,
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Dowling.G, 2004, The Art and Science of Marketing: Marketing for Marketing Managers,
Oxford University Press
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Economist , 2008, Oil, politics and corruption. Economist, Vol. 388, Pp.18-20.
Economist Intelligence Unit, 2009, Country Forecast Spain May 2009 Updater. Country
Forecast. Spain.
European Commission 2008, viewed 7th March 2010,

< http://ec.europa.eu/economy_finance/publications/publication10969_en.pdf >
Farr L. D. & Vella F. 2008, Macroeconomic Conditions and the Distribution of Income in
Spain. LABOUR: Review of Labour Economics & Industrial Relations, Vol. 22, Pp 383-
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52D2DD1F4C45/0/enerodiciembre2004I.pdf >
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viewed 15 March 2010, <http://www.laits.utexas.edu/orkelm/kelmpub/geographychic.pdf>
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Sweden Prentice Hall
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IE Singapore, 2010, Companies Step Up Overseas Expansion Plans As Market Recovers,

Press Releases, viewed 20th March 2010,
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Prentice Hall
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< http://www.oasisliving.com.sg/main.html >
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MKTG 1064 Global Marketing Group Assignment

opportunities in order to survive (Shapiro 2008).

favourable for Oasis Living expansion plan.

quality products with the finest finishing and final touch.

2.0 Macro-Environmental Research

country while Spain is a developed European Union member.

gradually improve by then (Economist Intelligence Unit 2009).

2.4 Analysis of Selected Countries

analysis of the three counties chosen.

Table 1: Analysis on China, Russia and Spain

World Bank Group

Social-cultural Points Points Points

3.0 City Selection

such as automotive, electronics, telecommunications, machinery, textiles, iron and steel,

world (Nie & Xin 2009).

shopping malls, providing a modern international outlook (Harbach et al 2010).

area within China.

Table 2: Analysis on Beijing, Shanghai and Guangzhou

Ease of Creating 12th in 1 1st in 3 2nd in China 2

4.0 Shanghai’s Bed Linen Retailing Industry Attractiveness

linen retailing industry is for Oasis Living expansion plans.

4.1 Threat of new entrants (Moderate)

4.2 Bargaining power of suppliers (Relatively Low)

suppliers that are readily available to supply raw materials.

4.3 Bargaining power of buyers (Moderately High)

considered a luxurious product. It can be considered as a seasonal product as people rarely

relatively high bargaining power.

4.4 Threat of Substitute products (Non-existent)

substitute products is relatively low.

4.5 Intensity of rivalry among competitors (Moderately High)

As bed linen business is a perfect competition business, intensity of rivalry among

competitors is moderately high as a search on Alibaba.com shows up hundreds of different

quality, services and product design in order to differentiate itself.

5.0 Target Market

According to Shanghai Statistics Bureau, Shanghai has a population of 18.88 million in

Figure 2: Adapted from: Statistical Year Book, 2009

foreign products (Access Asia 2010).

In addition, consumption needs in China is diversifying further, as consumers tried their

5.3 Buyer Behaviour

Instead, they are demanding of high quality at a good price.

first purchased for their houses.

5.4 Market Positioning of Oasis Living

Price X Oasis Living

Low Quality High

Figure 3: Adapted from: Dowling 2004

6.0 Market Entry Strategies

6.1 Modes of Entry Shortlisted

As such, Joint Venture, Contract Manufacturing and Wholly-own Subsidiaries (Greenfield)

Table 3: Advantages and Disadvantages of Different Type of Entries

government support easier, thus its own

subsidiaries independence to carry out global participation may deprive

first step into China’s market.

6.2 Assessment of Entry Mode based on Specific Criteria

Contract Wholly Owned

Weight) Weight) Weight)

for Oasis Living during its initial stage of investment in China.

6.3 Short-term Market Entry Strategy: Wholly-Own Subsidiaries (Greenfield)

(SMEs) for overseas expansion (IE Singapore 2010).

will be indirectly reduced. In addition, with rapidly evolving regulations in Shanghai to

objections from the Chinese government (Anonymous 2002).

6.4 Long-term Market Entry Mode: Joint Venture

with in-depth knowledge regarding aspects in relation to running an outlet in Shanghai. To

provide critical information for further possible expansion opportunities.