Pet Industry Situation in China

The Current Situation Of Pet Industry Chain

Abstract

We conducted the research order to find out the effectiveness of the rebranding that there should be rebranding of the Hill’s Pet British pet food brand in the China or not. The aim of the study focused on the current market analysis on the Hill’s Pet brand and pet industry chain. In this way, 100 questionnaires were filled by the people, who had the pets and were in the big pet food market of Beijing China. The main was on the brand Hill’s Pet that if there is the need to do the rebranding, however, our target sample was the X and Y generation, the research conducted have analyzed that people in Beijing, do not know about the brand China Hill’s Pet. The primary research gave us results that 22% people know about the brand and only 33% of the people have the favorable thinking about the brand. Thus, focused on the current market analysis secondary research which includes the industry analysis example, porters and pestle analysis, or the primary research that included the face-to-face analysis and data from the questionnaires conclude that re branding is the need of a foreign brand.

Introduction

The research is done, to find out the effectiveness of the rebranding that there should be rebranding of the Hill’s Pet British pet food brand in the China or not. Based on that, the research is done in China market, through the questionnaires; the questionnaires were filled by the people or customers that were in the pet food market, buying the food for the pets. However, it was analyzed through the research that there is the need to rebrand the Hill’s Pet because very few people in China are aware of this English brand.

Over the past years, pet economy of China is growing. According to a report of National Bureau of Statistics of China, People’s Republic is third in the world for dog ownership.  About 7 percent people of the country have owned a dog. As pet industry is booming and the forecast says that the industry will grow by 50% by 2019. The pet care center in China is growing quickly and becoming world’s largest market(Jun & Jaafar, 2011).

SPIE and many other similar events are gradually becoming the backbone of the sector. They are providing trade opportunities for domestic and multinational pet ventures. For instance, Pet fair Asia is the largest trade show for aquariums and animal supplies. Due to an increased number of Pets, the Pet care industry is also growing in China. Pet industry market experienced strong value growth in 2016 because pet population is growing. Modern owners have luxurious lifestyles and they don’t have extra time due to the work pressure so they acquire pet care services.  As knowledge about pet care and household income is increasing, Chinese consumers are eager to spend more on their pets, which led to worth increase in pet food being even stronger than that in the in general pet care market in 2016. The trade of dog and cat food is trending and their numerous researches have been conducted on food quality of cats and dogs.

The demand of pet industry is increasing both in small and big cities. The trading-up tendency is multi-dimensional in the favorite food market in China. In rural areas, more consumers have traded up from home-cooked food to table scraps and ready-made pet food; they are offering stronger volume growth for pet food. While, consumers in urban cities, traded up from economy to mid-priced or even to finest pet food in the appraisal period, produce dynamic value increase in pet food in China. In addition, China has conducted International Pet Food Trend Show in 2015 and 2016, in the show various companies participated and sold their products.

Moreover, this kind of trading up designates that generally, quantity sales of the pet food market are soaking in such cities, due to elevated product diffusion. Many international pet food companies directed the spilled pet care market in 2015. The first three positions in the industry were occupied by Royal Canin Au Yu, Pet Food Co Ltd, Mars Foods Co Ltd, and Nestlé (China) Ltd. They got dominant positions in pet food industry in China in terms of retail value sales. Many international players are also selling their products in China such as Hill’s Pet. Due to growing pet industry, the Hill’s Pet American Company wants to rebrand itself in China.

According to the current situation rebranding of foreign companies is quite challenging because there are already many companies that are holding large market share. Three best companies out of the five have mentioned above and they are operating efficiently and making huge profits. Therefore, in this situation rebranding requires a lot of effort. The company can rebrand its product by adding more features and can use various influential marketing strategies.  A marketing strategy will let the company reach more consumers and attract potential customers. The fame of domestic brands persists to intimidate recognized products in all the pet care industry(Liu, Pieniak, & Verbeke, 2013).

Furthermore, a large portion of China’s income is coming from pet food industry. Competing established organizations is not that easy. Therefore, new entrants or those organizations who want to rebrand themselves have required a strong market research. As pet food, trade is rising so there are high chances of success for Hill’s Pet Company. The company can rebrand itself by gathering information on the current market situation.

The results of the research show that Chinese consumers prefer to buy domestic pet food brands and they do not opt for American brands. Therefore, rebranding is the best solution for Hill’s Pet. The company can reintroduce itself by conducting research on Chinese brands. For example, the company must know that what kind of food pet owners prefer to buy, how to get more market share, and what features can attract more customers. Consequently, by focusing on changing trends the company can easily rebrand itself and earn huge profits(Zhan & He, 2012).

• Aim Of The Study

The aim of the study is to find out that there should be rebranding of the Hill’s Pet in China market or not. There is also focus on to find out the popular pet food in the China and how many of the people having the pets at home know about the Hill’s Pet brand, they use or not, so that rebranding should be done or not.

• Research Questions

The research question focuses on to find out:

1. That if there is the need for the rebranding of the Hill’s Pet in China market?
2. The interest and knowledge of the customers towards the brand Hill’s Pet, as it is the American and European pet industry chain?
3. Current situation of the pet food market in China?
4. What reasons could motivate us to do rebranding?

Literature Review

Introduction

The main aim of this literature review is to analyze the current situation of China, American and European pet industry chain. Then it will try to rebrand Hill’s Pet in China. Hill’s Pet is a British pet food brand.

The project aims at using the marketing mix, SWOT, five forces model and Pestle framework to analyze the economy environment that Hill’s Pet may face and rebrand Hill’s Pet in China.

Pet Industry

Initially, American pet products association (2016) states that all the businesses which make money from producing pets’ products or providing services for pets are the part of pet industry. Moreover, Kostelac (2006) supports that the pet industry can be regarded as the products and services that help the owners of pets to take care their pets. It not only means food and toys but also includes pet care, pet training, Veterinary and the like.

The size of pet market currently is expected to gain $62.75 billion in 2016. It was reported that the average annual growth rate of the pet industry is 5.4%, and it has also been pointed out that it has lasted for more than 20 years since 2002 (“Pet care industry analysis 2016 – cost & trends”,2016). According to the research, above average job growth is expected for the industry – 11% growth between 2014 and 2024 (“Employment and wages in pet related industries”,2015).

Brand And Rebranding

According to American Marketing Association Dictionary (n.d.), a brand means “Name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers.” However, Holt (2004) denies saying that brand is only a company’s name and logo. He argues that brand can be a company’s identity. It could let customers understand the core idea of a company’s products.  Furthermore, Knapp (2008) concludes that brand is one of the most important part of business and it presents company’s image and promise to their customers. In this case, brand has its own power (Stobart, 1994).

Rebranding is a strategy for marketing (Muzellec& Lambkin, 2006). They presume that rebranding is usually used to develop a company’s original brand by creates a new name and logo. When a product enters a foreign market, they usually need rebranding, but Frederiksen (2016) argues that rebranding is not as easy as changing a logo or name. He points out rebranding strategies is a step-by-step approach for developing brand.

The Marketing Mix

First, “the marketing mix is not a theory of management that has been derived from scientific analysis” (Palmer,2012, p.20), but it is a useful tool to develop long-term and short-term strategies. Palmer (2012) also explained that the marketing mix is a central concept of the marketing management. Manager who uses marketing mix can be regarded as “the same way as a cook mixes ingredients for a cake” (Palmer,2012, p.20).

It has been argued that which elements should be embraced by the marketing mix. Usually, it can be divided into 4Ps and 7ps. The main purpose of 4Ps and 7Ps is to “focus on satisfying customers’ needs profitably” (Palmer,2012, p.21). 4ps includes product, price, promotion and place. 7ps is the extension of 4ps. It includes 4ps and people, process as well as physical evidence (Palmer,2012). This project will only use the 4Ps.

4Ps

According to Palmer’s theory (2012), the product is the goods or services that the company sells. It can be individual thing or an accessory to other things. Price not only means the price of products but also means the price strategy. Place is the target market of a product. Promotion is the way that company sells products. It can be regarded as marketing.

Porter’s Five Forces

Porter’s five forces was put forward by Michael Porter. It is used to analyze the micro marketing environment of an industry and help the industry to make business strategy (Porter,1980). Porter (1980) discovers that the micro marketing environment of an industry can be divided into 5 parts. They are the threat of potential entrants, threat of substitutes, power of consumers, power of suppliers and the industry rivalry.

Swot

“SWOT is an acronym for strengths, weakness, opportunities and threats” (Palmer,2012, p.67). Palmer agrees that SWOT is a useful framework for industry to analyze its internal marketing environment.

Pestle Framework

According to Evans’s study (2012), Pestle framework is sometimes referred as PEST analysis which reduces legal and environment factors. It is a tool for managers to analyze the macro-environment of the markets that they are involved to. Furthermore, Walsh (2015) agrees that Pestle provide a view of the whole environment from angles for the marketing managers.

In general, Pestle analysis is made up of political environment, economic environment, social environment, technological factors, legal environment and Environmental factors (Evans,2012). Evans (2012) also adds that Pestle is usually used to set a new product or service in motion.

Hills’ Pet

Hill’s Pet was founded in 1907 by Dr. Mark Morris who was a veterinary (“About Hill’s”, n.d.). It is a famous pet food brand. It provides food for both dogs and pets. Hill’s Pet bend themselves to take care of pets’ healthy and their core idea is “to help enrich and lengthen the special relationships between people and their pets” (What Hill’s stands for, n.d.).

Conclusion

To sum up, this project will do some research on the marketing situation of pet industry chain by survey secondary data. Then both external and internal marketing environments of Hills’ Pet will be analyzed in the project by using Porter’s five force, Pestle framework and SWOT. Finally, this project will try to give some suggestions to Hills’ Pet and find out how a foreign pet brand to enter Chinese market.

Methodology

Introduction

In this chapter, there are focuses on the differentmethods that are used in regarding topic of rebranding, as this topic find out the research and did market analysis on the Hill’s Pet brand. Inthis project,the questionnaires were filled by the people, who had the pets and were in the big pet food market of Beijing China. The questionnaires were filled toknow about the willingness of the customers towards the American brand Hill’s Pet and if there is the need to do the rebranding.

The Rationale Of The Research Method

To know about the importance of the Hill’s Pet British pet food brand we collected the research from the pet food market, through focused on the Questionnaire, we developed the series of questions so that there could be the information about the Hill’s Pet brand that people who have pets are aware of the brand or not. Thus, the information was taken was taken from information the individuals or the group of peopleto find out the need of the rebranding in China for the brands. Moreover, we did the face-to face interview, in which we gathered the data, as it is the fastest way; we gather the data through asking people that what food brad they use and if they have any information about Hill’s Pet. The research aims to find out the primary and secondary data, we used both the data, for the primary data we distributed among the group of people who were in the pet food market, thus, we also did the online distribution and physical distribution, and we also put some questionnaires on the social media. For the relevant researches, we used secondary research based on the convenient non-probability random, we used the sampling model and the opinion was taken from the 100 questionnaires. All the questionnaires were given by self-administered questionnaire distribution.

Questionnaire Design

Our questionnaire was consisting of the two parts, as the first part consist of the personal information of the people, example, age and gender, who were in the pet food market, have the pet and willing to fill the data. The second part consist of the five questions, which carry out the detailed information of the Hill’s Pet brand, the questionnaire was design having the options of yes or no, and the multiple choices of the question.

Sampling And Location

There were 100 questionnaires that were filled on date 5—15 April 2017, the filled questionnaires helped us to find out the response rate, as we got it 100%. The research was conducted in the pet food market by the people who had pets and were buying food for them.

Findings From The Primary And Secondary Research

Introduction

To fill the questionnaire, the questionnairecarried out the age and gender information, so that it could be known that the people from generation X and Y know about the Hill’s Pet brand or not, the main influence of the research questions, is to find out that there is need to do rebranding of the Hill’s Pet or not. However, the finding tells us that there are very few people in the pet food market who know about and use the Hill’s Pet because they like brand by the own country, which is China, moreover, our target sample was the X and Y generation that they are more likely towards using the Hill’s Pet or they are satisfied with the brand they know.

Discussion And Findings

The research was conducted for the people who have the pet at home; we saw men and women, as both the gender had the equal interest towards using the good brand for the pet they have. The questionnaire contains all the information of the people, as from the 100 questionnaires, there were 44 females and 56 males, who filled the questionnaire. Next information was regarding to the age of the people that is they are between 15-25 years, 25-35 years, 35-45 years, 45-55 years or above 55years. Thus, regarding the age, there were 21 people between the ages of 15-25 years, there were 26 people between the age of 26-35 years, there were 23 people between the age 36-45 years, there were 19 people between the age 46-55 years and there were 11 people above 56years.

Conclusion

While staying focused on the conclusion, it could be said that our research focused on the marketing situation of pet industry chain by survey secondary data, we also carried out the primary research. It could be said after carrying out the analysis and research that very few people in Beijing, China, especially in the pet food market know about the Hills Pet food, consequently, it is important for the brand that there should be the rebranding, to get the favorable outcome in the market, 100 questionnaires were filled by the people, who had the pets and were in the big pet food market of Beijing China.

While concluding, we have found out that there is the effectiveness of the rebranding because Hill’s Pet British pet food brand in the China is not known and used by all the consumers, focused on the facts it is known that only22% people know about the brand and only 33% of the people have the favorable thinking about the brand, thus, focused on the X and Y generation 43% of the people want the brand rebranding. Consequently, through the primary and the secondary research we become able to find out that themarket analysis on the Hill’s Pet brand need the rebranding of a foreign brand. We have conducted the analysis by focused on the current market analysis secondary research which includes the industry analysis example, marketing mix, 4ps, brand rebranding, porters and pestle analysis, or the primary research that included the face-to-face analysis and data from the questionnaires conclude that rebranding is the need of a foreign brand.

Recommendations

While giving the recommendations, it could say that Hill’s Pet should do the rebranding, to get maximum market share in the industry. However, from the primary and the secondary research it could be analyzed that the consumers of the Chinese market prefer the brand that the own country has, as very few of the people used the Hill’s Pet, it would be better for the Hill’s Pet to do the joint venture with the brands that are already existing in the pet industry market. However, regarding focused on the research it is advice to the future researchers that the research need to be conducted deeper so that there could be analysis of the better situation, and the behavior of the Chinese consumers could be known.

Limitation And Scope For The Future Research

There can be limitations in our research as the questionnaires may be filled and views can be given based on the people biasness, the research may not have revealed the hidden aspects that could be in people mind. Other limitations could be we had the limited collection or limited time and we have onlyselected very few people to answer the questionnaires.

References

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