The information here is fictional and it is only for academic analysis purpose. Please do not contact any firms in the case study. It is postulated as a result of a recent research output.
This case is about marketing Chinese trucks in a developed market (New Zealand). China is New Zealand’s largest trading partner, with two-way goods and services trade at around NZ$40 billion (2022-2023).
FT is a multinational truck manufacturer based in China, a joint venture of
Germany (e.g., Daimler truck), USA (e.g., Cummins) and China. FT is a leading truck brand in China . Its products include light (6 to 8 tones) and heavy truck ( > 12 tones) . It is also one of many truck players in New Zealand. FT products have been marketed in New Zealand since 2016 by a company called ATA International Ltd (a fictional name).
ATA is a mid-size New Zealand import and export company (employee is around
200). It started manufacturing and exporting electronic and electrical products in 1983. When ATA started to manufacture these products, it targeted the US, Japan, Europe, Taiwan and Hong Kong as their main export areas. At that time, these markets contributed more than 60% of the company's total sales revenue. The CEO and founder of the company decided to enter the importing and trading business about 20 years ago. The firm’s trading businesses include machinery and automobile products and parts. Within the truck sector, the company has been a sole distributor of a number of international brands such as LDV of UK, Mahindra of India as well as FT from China. FT brandis just one of several brands in ATA's importing businesses and it is the latest importing business. It is in the middle level of the New Zealand truck market.
Truck industry is a big business in New Zealand. According to NZ Transport
Agency, around 6,183 units of new trucks were sold in New Zealand in 2023. There are many multinational players in the market such as Isuzu, Hino (Toyota), Fuso
(Mitsubishi), Mercedes Benz, Scania, Volvo and so on. FT is positioned as a mid- price among the automobile brands in New Zealand. Because of FT's international reputation and reasonable price, ATA believes that FT would stand well against
major European/USA/Japanese/Korean brands. ATA has been importing FT’s products since 2016.
According to the contract, which is renewed every five years, ATA is the sole distributor of FT’s products in the New Zealand market.
Despite many years’ of operation in New Zealand, FT has felt that its truck businesses can be lifted up here much more. To evaluate its current situation in the New Zealand market, FT has hired an independent marketing research consultant to uncover the issues their brand has been facing in New Zealand. A number of issues regarding marketing FT’s products in New Zealand have been identified by the
New Zealand customers.
. Though FT is a leading truck brand in China, it is a totally new brand to the New Zealand customers. New Zealand customers are not familiar with this new brand at all. Customers’ confidence needs to be established.
. People in New Zealand still view truck products made in China as less
technology advanced than their European/Japan/Korean/US counterparts, despite China has been promoted as a world manufacturing centre. This country of origin effect has some negative effects on marketing Chinese manufactured goods such as the view of low cost and inferior quality manufacturing products in New Zealand. As a result, there are some perception problems about FT’s products in New Zealand . When ATA's sales forces go out to promote FT’s products, they encounter many difficulties in persuading discerning New Zealand customers to try this new brand.
. A lot of feedback from ATA's customers has not been adopted by FT in
China. For instance, one comment from the market is that the product choice of FT is not wide enough in New Zealand. Customers in New Zealand always look for a wide range of truck choices. However due to its production facility issues, FT does not offer as many product choices as their competitors in
New Zealand (e.g., Hino, Hyundai, Kia). Currently the firm has only offered three product ranges in New Zealand whereas the leading player of Hino has offered about 30 choices in its popular 300 series alone (Hino.co.nz).
. Customers in New Zealand are now looking for more environmentally
friendly vehicles due to the change of shopping and consumption behaviour. Most customers are now looking for pure electrical and/or hybrid vehicles.
FT is very new to this clean vehicle segment. Its reputation on offering clean vehicles is still a long way to go when comparing to other key electrical vehicle players such as Hyundai, Volvo and Toyota. Most of these firms have now offered electric and environmentally friendly trucks with 8-10 years warranty on their electrical truck battery while FT is yet to enter this new innovative product range.
. ATA is just one of the many car importers in New Zealand and it has only
been in the car market for 20 years. Other importers have been in this business much longer than ATA. ATA’s distribution system does not appear to be as sophisticated as other importers. Currently its distribution system is only available in major Metropolitan cities such as Auckland, Wellington and Christchurch (three dealership currently). In comparison, FT’s competitors have a presence in most of the New Zealand cities, for example Hino has distributors in Invercargill, Nelson, Palmerston North, Napier, Rotorua, Bay of Plenty, Hamilton and Whangarei, in addition the three major metropolitan centres.
. Though ATA has also started its online business, the online business is not
going too well for the firm and much more work needs to be done here. For example, the web-site of ATA is also not updated frequently so customers do not know their latest product and distribution information. Unlike other firms, the firm does not use WhatsApp/Facebook/Wechat to communicate directly with its customers. This is another major drawback of the firm’s online business. Technology such as virtual reality (VR) is completely new to the firm and the firm has not utilized this type of technology in their strategic distribution management at all.
This project is completed individually. FT has employed you, as a recent graduate of Massey University, to bring some expertise to their distribution management related strategies in New Zealand. To help with this task they need to prepare a case report relating to FT’s operation in New Zealand. You may conduct additional research while preparing your case report.
Your assignment should be in report format with a Title Page, followed Market Stratgies Analysis, Recommendations and Summary, and finally references. Your report cannot not exceed 1000 words (absolutely restricted page length; main context only, references, tables and appendices excluded).
1. Environmental Scan. Write a section outline of the most important
environmental issue facing FT’s operation in New Zealand . This can be in terms of competitive, customers and so on (just the most important one).
Maximum 250 words – 7 Marks
2. Market Strategies Analysis. Prepare an analysis of current channel and
technology strategies used to market FT’s products in New Zealand. This needs be in terms of:
(a) distribution management strategies, and
(b) technology strategies that are related to marketing of FT’s products in New Zealand.
Maximum 500 words - 16 Marks
3. Summary and Recommendation. Sum up what you have learnt from the
environmental scan (most important environmental issue) and marketing strategy analysis (distribution and technology) sections and make recommendations for future development of FT’s operation in New Zealand.
Maximum 250 words – 7 Marks
