俄羅斯美食引進全新市場：俄羅斯黑魚子醬的市場引進策略

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(1)國立臺灣師範大學管理學院全球經營與策略研究所碩士論文 Graduate Institute of Global Business and Strategy College of Management National Taiwan Normal University Master Thesis. 俄羅斯美食引進全新市場：俄羅斯黑魚子醬的市場引進策略. RUSSIAN GOURMET PRODUCT ENTERING A NEW MARKET: Market Entry Strategies for Russian Black Caviar. Student: 愛羅莎 Liubov Cheremisina. Advisor: 蕭中強 Hsiao, Chung-Chiang. 中華民國 104 年 08 月 Aug, 2015.

(2) ACKNOWLEDGEMENT. There are many people, whom I would like to acknowledge in helping me to make this research possible. First of all, I would like to express my sincere gratitude to my advisor, Professor Chung-Chiang Hsiao (蕭中強) for his patience. I am thankful for his academic support, critical comments and questions which encourage me a lot during the research. It was a great pleasure to work with Professor Chung-Chiang Hsiao (蕭中強). I would like to thank all the people who agreed to be interviewed and have some spare time in their busy schedules to answer my questions. Each comment and suggestion made by them helped me to gain invaluable information for my research. I am very grateful to all my friends, who gave me hearty support through two years of studying an MBA program at National Taiwan University and also become my second family away from home. Last, but not the least, I would like to thank my mother, Olga Cheremisina. She was always there, cheering me up and stood by me in good and bad times.. 1.

(3) TABLE OF CONTENTS ACKNOWLEDGEMENT ............................................................................................................................ 1 ABSTRACT.................................................................................................................................................. 5 CHAPTER I: INTRODUCTION ................................................................................................................. 6 1.1 Motivation ........................................................................................................................................... 6 1.2 Why Taiwan? ...................................................................................................................................... 7 1.3.Purposes of the Research .................................................................................................................... 8 CHAPTER II: LITERATURE REVIEW ..................................................................................................... 9 2.1. What is Gourmet Food? ..................................................................................................................... 9 2.2. What is Luxury? ................................................................................................................................. 9 2.2.1 Groups of Luxury Consumers .................................................................................................. 10 2.3. Factors affecting the Entry Mode..................................................................................................... 11 2.3.1. Host Country Factor: Taiwan’s experience in Attracting Foreign Investments ........................ 12 2.3.2 Host Country Factor: cultural and economic collaboration between Taiwan and Russia .......... 12 2.3.3 Host Country Factor: Consumption Behavior............................................................................ 13 2.3.4 Home Country Factor: Country of Origin .................................................................................. 14 2.3.5. Home County Factors – Cultural Dimensions ..................................................................... 15. 2.4.Entry Mode ....................................................................................................................................... 15 CHAPTER III: RESEACH METHODOLOGY ......................................................................................... 17 3.1. Research Methods ............................................................................................................................ 17 3.2. Reliability and Validity .................................................................................................................... 18 3.3. Ethical considerations ..................................................................................................................... 18 CHAPTER IV: ANALYSIS OF CAVIAR MARKET ............................................................................... 19 4.1. Product Analysis .............................................................................................................................. 19 4.1.1. Storage and Nutritional Information ......................................................................................... 19 4.2. Caviar Origin ................................................................................................................................... 21 4.3. Caviar Production in Russia ............................................................................................................. 22 4.4 The World Biggest Caviar Exporters ................................................................................................ 23. 2.

(4) 4.5. The World Largest Caviar Importers .............................................................................................. 25 4.6. Illegal trade of caviar ....................................................................................................................... 26 CHAPTER V: ............................................................................................................................................. 27 RUSSIAN CAVIAR HOUSE ENTERS TAIWANESE MARKET ........................................................... 27 5.1. Why Group of Companies “Russian Caviar House”?...................................................................... 27 5.2. Company Profile .............................................................................................................................. 27 5.2. 1 Black Caviar by Russian Caviar House .................................................................................... 28 5.2.2 Russian Caviar House Brand ..................................................................................................... 29 5.2.3 Brand Identity ............................................................................................................................ 29 5.2.4 The Brand Positioning on Russian Market ................................................................................ 30 5.2.5 Russian Caviar House Price and Quality Positioning ............................................................... 30 5.2.6 Product Line Description .......................................................................................................... 31 5.2.7 Russian Caviar House Sales Geography ................................................................................... 33 5.3 GC “Russian Caviar House” entering Taiwanese Market ................................................................ 33 5.3.1. Partners on the market and Location......................................................................................... 33 5.3.2 Profit and Loss Prediction for the GC “Russian Caviar House” .............................................. 37 5.3.3 Advertisement and Communication Strategies .......................................................................... 41 5.3.4 Product Position : Price and Quality ......................................................................................... 43 5.4. Target Audience ............................................................................................................................... 48. 3.

(5) 5.5. Visual Merchandising and Customer Service .................................................................................. 50 CHAPTER VI: CONCLUSION ................................................................................................................ 52 6.1 Uncertainties ..................................................................................................................................... 52 6.1.1 Taiwan: A mature market of gourmet and specialty food sector .............................................. 52 6.1.2 Product acceptation on the market ............................................................................................. 52 6.1.3 Pricing and Discounts ................................................................................................................ 53 6.2. Discussion ........................................................................................................................................ 54 6.2.1 Overcomming Consumer’s Indiferrence .................................................................................... 54 6.2.2 Product Differentiation .............................................................................................................. 54 6.2.3 Domination over Consumer’s Attantion ................................................................................... 54 6.3 Suggestions ....................................................................................................................................... 55 References ................................................................................................................................................... 56 MYSTERY DINNER EXPERIMENT ....................................................................................................... 60 Questionnaire: ......................................................................................................................................... 60. 4.

(6) ABSTRACT The aim of this paper is to study the ways the new gourmet product enter the market. The purpose. of this research is to investigate the existing barriers and challenges to the food distribution and acceptance for the new product on the market. Questions which are going to be answered in the study are: How can a new gourmet product enter the market? How the consumer can be educated in gourmet field? To answer these questions we have to discuss the ways of how to build a strong marketing and educational base for black caviar distribution in Taiwan. Empirical material for this study was concluded in 8 month period of field work in Taipei, Taiwan. It includes interviews, observations, study of written magazines and TV programs, specializing on gourmet food. Conducting. the study on caviar production in Russia and distribution of this product abroad hopes to investigate the new angles on trade between Taiwan and Russia.. Key words: black caviar, brand identity, consumer education, entry mode, food distribution, gourmet food, luxury. 5.

(7) CHAPTER I: INTRODUCTION. 1.1 Motivation The Taiwan seafood and fish market first caught my attention from consumer’s perspective. Having a huge variety of seafood and fish delicacies on the market it was missing one of the key and the most luxurious product – caviar. It was quite strange for me because as a person born and raised in Russia, I used to see caviar as a common appetizer for any kind of celebration and sometimes as a part of my daily meal plans. This made me aware of the fact that with all seafood diversity which is introduced in the country, there are products not available in Taiwan. Convinced that these products would be welcomed in the market, and that an ongoing business concern could be founded on such product as caviar, I chose to research the opportunity in greater detail. Another motivation force which led me to choose this topic was the great interest towards gourmet food consumption in general and particularly in Taiwan. Living abroad for almost a decade I have always been interested in local and overseas culinary trends. It has been amazing for me how does the food preferences of some countries are being viewed in different parts of the world. Caviar is an iconic national product of Russia and well known worldwide. It is the most luxurious gourmet food in the world. The interest towards luxury segment and how is it flourishing in Asia came from the book of Erwan Raomburg “The Bling Dynasty: Why the Reign of Chinese Luxury Shoppers Has Only Just Begun” and was another inspiration for me to study deeply on luxury consumption in Asia. Caviar refers to the salted eggs (roe) of the fish species, sturgeon. Given its high price in the West, caviar is associated with luxury and wealth in Europe, however, it is not very wellexplored in Asia, particularly in Taiwan yet.. 6.

(8) There is a certain number of caviar producers in the world. However, in my thesis I would like to analyze the market entry strategies for Russian GC “RUSSIAN CAVIAR HOUSE”, the biggest caviar producer in Russia.. 1.2 Why Taiwan? There are several factors which make Taiwan an attractive place to enter for the business, which specializes on gourmet food. First of all Taiwanese luxury goods market represented about 5,5 billion dollars in 2012, which made it the fifth biggest luxury market in Asia after Japan, China, South Korea, and Hong Kong, says Euromonitor International 1. Taiwan’s Ministry of Economic Affairs (MOEA) states that the economic output of Taiwan’s food service sector, excluding institutional food service, is estimated at US$13.2 billion in 2012, a 7.7 percent increase from the previous year. Secondly, considering Russia’s shift of the global economic and strategic balance eastwards, a traditionally Europe-oriented Russia has begun to realize its Asian dimension and economic potential. There is an external reason for the Russian food companies to look for the opportunities on the East: due to the past political events which happened between Russia and Ukraine and which caused economic sanctions towards Russia. The Group of Companies Russian Caviar House has already opened representative offices in Hong Kong, and Singapore. They successfully introduced iconic Russian product to the market and are looking for the opportunities to extend their business to other countries in South East Asia. This is the reason, why Taiwan is one of the key destinations to enter. Although Taiwan is a small island with a population of only 23 million people, Taiwan has developed into one of the world's largest economic and trading entities. With a nominal Gross Domestic Product (GDP) of $473.7 billion in 2012, Taiwan is the world's 24th largest economy, as well as the 6th largest economy in Asia. In 2012, Taiwan had an estimated per capita GDP of US$20,378 (US$38,486 when calculated in terms of Purchasing Power Parity).2 Taiwanese people love to eat. Feasting is a beloved practice, an integral component of the Taiwanese way of daily living, socializing, celebrating occasions, and making a conspicuous 1 2. http://www.euromonitor.com/business-environment http://www.tradingeconomics.com/taiwan/gdp-growth. 7.

(9) display. Sharing meals considers both a significant private ritual and a special element of Taiwanese socio-economic habits. All these factors make Taiwan an attractive destination for distribution of such a unique and exclusive product as black caviar.. 1.3.Purposes of the Research In this paper I would like to study the ways the new gourmet product enter the market. Even though Taiwanese market is small, as it was said previously, it has a lot of advantages and possibilities, especially in the food sector. The Taiwan foodservice industry expanded 7.7% to U.S. $13.2 billion in 20123. The rise of Taiwan’s tourism market continued to play a critical role in the growth of this sector, especially with the continued increase of Chinese tourists. These factors make Taiwanese market very attractive for entering. However, as it is going to be completely new for the product, the purpose of this research is to investigate the existing barriers and challenges to the food distribution and acceptance for the new product on the market. Question which is going to be answered in my paper is How can a new gourmet product enter the market? How the consumer can be educated in Gourmet field?To answer this questions we have to discuss the ways of how to build a strong marketing and educational base for black caviar distribution in Taiwan. Conducting the study on caviar production in Russia and distribution of this product abroad will help to investigate the new angles on trade between Taiwan and Russia. Ultimately, this thesis might be the foundation of a new company capable of profitably creating, marketing and distribution unique products of high quality to Taiwan’s the most discerning gourmet lovers whose needs are not currently being met.. 3. The Report on The Taiwan foodservice industry by MOFA, 2014. 8.

(10) CHAPTER II: LITERATURE REVIEW The aim of this chapter to emphasize the factors, a company should consider while entering the foreign market. The key point of this section would be the description of the entry modes for the company to enter the market. To narrow the process of the entry mode description we will start with the definition of gourmet food and its it’s relation to luxury consumption. 2.1. What is Gourmet Food? The term gourmet may refer to a person with refined or discriminating taste who is knowledgeable in the craft and art of food and food preparation. 4 The term Gourmet describes a class of restaurant, cuisine, meal or ingredient of high quality, of special presentation, or high sophistication. Gourmet is an industry classification for high-quality premium foods in the world. In the 2000s, there has been an accelerating increase in the world’s gourmet market, due in part to rising income, globalization of taste, and health and nutrition concerns. When does the gourmet food becomes luxury? Foods which are which are rare (like wild truffles), expensive (like caviar) or have a complex manufacturing process (roquefort cheese) and in some instances PDO (protected designation origin) regional status ( parma ham; cornish clotted cream) become an luxurious treat for the consumer mouth. It is also very important to mention the role of fashion and the media industry. Celebrities also have a part to play in what is deemed to be a luxury brand.. 2.2. What is Luxury? The concept of luxury has been present in various forms since the beginning of civilization. With the clear differences between social classes in earlier civilizations, the consumption of luxury was limited to the elite classes. It also meant the definition of luxury was fairly clear. Whatever the poor cannot have and the elite can was identified as luxury. Since that time the concept of luxury changed, but not drastically.5. 4. Charles McGrath (January 26, 2007). "In Arizona back country, a gourmet life". International Herald Tribune.. 5. Erwan Raomburg “The Bling Dynasty: Why the Reign of Chinese Luxury Shoppers Has Only Just Begun”. 9.

(11) Although the technical term luxury good is independent of the goods' quality, they are generally considered to be goods at the highest end of the market in terms of quality and price. Classic luxury goods include haute couture clothing, accessories, and luggage. In the food sector, all food, which we might call gourmet, can be identified as a luxury, because it is consumed rather not of the necessity, but for pleasure and for the comforting a certain level of life. Here, we need to analyze who are those, who consume luxury goods. On what kind of customers the luxury market is oriented. 2.2.1 Groups of Luxury Consumers. BCG Research group divide the luxury consumer into following groups: . PEOPLE WHO “SHOW” This group were refreshingly candid about their motivations. They are highly status driven, demanding, extrovert, ostentatious, larger than life personalities, and extremely materialistic. They see luxury as one of the principle mechanisms by which they can benchmark their success and prove that they are doing better than others. For this luxury consumer, the louder and more overtly successful the brand, the better.. . PEOPLE WHO “CAN’T BE SHOWN UP” This type of luxury consumer proved to be rather more complex in attitude and motivation, and more introverted by nature. They use luxury to give themselves confidence and to enable themselves to fit in. They want to be seen to be doing the right thing, buying the right brand, but not overstepping the mark. Their preference tends to be for brands with an established reputation but not an identity that will glamour for attention. And when they find the right brand they feel more confident, more complete. They believe that others will respect them more.. . PEOPLE WHO “SHOW THEY KNOW” Arguably an evolved form of “People Who Show”, this group are also highly status driven. They possess a degree of knowledge about the things they buy, but only for the purpose of justification; there appears to be no deep or intrinsic appreciation of luxury. They acquire knowledge as a further confirmation of their social status and they tend to be a little older. This type of luxury consumer looks for the less obvious choice of brand, or the extra dimension of knowledge which justifies why they should continue to buy the most established brands. 10.

(12) . PEOPLE WHO “KNOW” This group loves luxury for luxury’s sake. They appear to have a genuine appreciation of beautiful things, with no preoccupation with what other people think. Those who “know” buy the brands they like, because they like them. They are the kind of people who, if they drink malt whisky, will have in their collection both a place for the most esoteric small batch .. According to Abigail Bray the head of magazine Added Value, London defining attitudes by country inevitably results in generalizations. However, if one wanted to identify the centre of gravity in each of the luxury markets covered by our study, it will be maped like this: Consumers in the UK like to think they know their luxury, and many of them enjoy showing it. US consumers are pretty well versed and they definitely like to show it. Japanese consumers come in many shapes and sizes but can be amongst the most knowledgeable, and in the main they wear their knowledge with discretion. Russian consumers are on a roll and, having been squarely on the east of the chart in the 1990s, are moving rapidly west. In China, with some obvious exceptions, it feels like the market is still in its infancy and that status and show are the principal drivers.6 In this section we identified the product “caviar” as a luxury product and identified the audience, which purchase the luxury goods. To identify the entry mode for the company, which is going to introduce black caviar to the Taiwanese Market, we need to talk about the factors which affect the decision on choosing entry mode.. 2.3. Factors affecting the Entry Mode In this part we are going to analyze factors, which effect the entry mode for the new entrant of the market. In our case the new entrant is which is produced by GC “Russian Caviar House”. According to Dunning(1980), while choosing the entry mode for the business we have to concentrate certain factors, which influence the process of entering the new market. This model integrates the effects of host country factors, home country factors and industry factors on firm market entry strategy. This model assesses two dimensions of a firm’s entry strategy: the entry mode and whether the entering market form chooses to form an alliance with another local firm on not. 6. Abigail Bray, Head of Luxury Practice, Added Value London. 11.

(13) As we have already described the niche market our product is in “Gourmet Food” it will be easier to describe the host country and home country factors, that will influence the entry mode for the company which is going to enter market in Taiwan One of the host country factor Dunning is mentioning is the experience of the host country in the attracting foreign country investment. This factor is very important because it shows the wealth of the country and it’s purchasing position on the global scale. 2.3.1. Host Country Factor: Taiwan’s experience in Attracting Foreign Investments. Taiwan is located at the heart of the Asia-Pacific region, which puts it in an advantageous position to make use of global production resources and marketplace. According to the Global Competitiveness Report 2012-2013 released on September 5, 2012, by the Taiwan sustained its 13th position in the global competitiveness rankings of 144 economies7.. In terms of consumption, Taiwan is the 5th luxury market in Asia ( after Japan, China, South Korea and Hong Kong) Furthermore, Taiwan was rated the world's 16th-easiest place to do business among 185 economies, advancing from No. 25 in the previous year, according to the World Bank 2013 annual report released October 23, 2012. All the factors mentioned above, make Taiwan very attractive place to enter for the new business. For the entry fro mthe foreign country it is also very important to measer the market in terms of connections with the home country. So, in the next paragraph we are going to look at the economic collaboration between Russia and Taiwan.. 2.3.2 Host Country Factor: cultural and economic collaboration between Taiwan and Russia. Russia–Taiwan relations are the bilateral relations between Russia and Taiwan (officially the Republic of China). The ROC representative office in Russia, the Representative Office in Moscow for the Taipei-Moscow Economic and Cultural Coordination Commission, was opened on 12 July 1993 by the Ministry of Foreign Affairs of the ROC. While the Russian representative office in Taiwan, Representative Office in Taipei for the Moscow-Taipei Coordination Commission on Economic and Cultural Cooperation, was opened on 15 December 1996 by the. 7. Report by World Economic Forum (WEF),September 5th, 2012. 12.

(14) Ministry of Foreign Affairs of Russia.8 There is a deep collaboration on economic, industrial and academic level between two countries. However, there is very small presents of Russian companies on Taiwanese market, most of them are in IT industry. Russian porducts are almost invisible. Even though the cooperation between two countries exists for the long time. For sure there is a cultural and economic exchange. But this process is very slow. And from the both sides, either Taiwanese citizens, or Russians, have very limited information about each other. To understand better the local consumption behavior, it is very important for the new entry to analyze the local consumers. In the next paragraph we will try to identify consumer behavior in the Asian cultures. 2.3.3 Host Country Factor: Consumption Behavior. The first step for understanding the consumption behavior in any country is to understen the local culture,A country’s culture has long been identified as a key environmental characteristic underlying systematic differences in behavior. Cultural norms and beliefs are powerful forces shaping people’s perceptions, dispositions, and behaviours (Markus & Litayama, 1991). It is well-known fact that customers in different countries behave differently. There are multiple reasons for that: cultural, economic, educational social environment. Customer’s behavior is strongly influenced by the culture and environment. East Asian societies share a Confucian collectivist cultural tradition (Wong, N & Ahuvia, A.C 1998), opposite to westerners, they are crowd oriented. In the southeast Asian Confucian tradition, belonging to the group is seen in a more positive light (Yang 1963)then in the west. The interdependent selfconcept includes both the self and in-group members; to say it in few word that I is associated with the common We. And as a result, In order to develop harmonious relationships with others, , individuals should respect and follow tradition and social hierarchy. Moreover, due to the importance of « face », people in Confucian cultures are respectively more concerned with other people’s perceptions of them and with the maintenance of their personal. 8. http://www.taiwanembassy.org/ru/mp.asp?mp=237. 13.

(15) status. According to Redding and Ng (1983), the face concept is particularly ambivalent for people of Confucian culture and it is a key for the interpreting their behavior. South East Asians tend to be more interdependent with respect to their group (in- group). In Asia, consumers appropriate brand meanings through associations of brands with reference groups to construct their self-concepts (J. Edson Escalas and Bettman J.R). This means that Asians tend to focus on the social self and how the self is related to others This knowledge is very important for the company, which wants to enter the new market. During the representation of certain cervices or the product, the strategy will be already oriented on the customers who prefer to “keep their face” within their social group, and this will orient their purchasing behavior. Another key element, that should be remembered and understood, while entering the foreign market is the Country of Origin which the company introduce on the new market through it’s services or products. It is also can be observed from the opposite side. The Country of Origin will be one of the stones in the attitude formation on the particular product 2.3.4 Home Country Factor: Country of Origin. Research shows that consumers' broad general perceptions of a country, including of its national characteristics, economic and political background, history, traditions, and representative products, combine to create an overall image or stereotype that is then attached to the products of that country.9 According to Schweiger (2012) The country of origin effect is strongest on older consumers and those who don't know much about the product or product type, and weakest on consumers who are well-informed. Sensitivity to country of origin varies by product category. It is strongest for durable goods and luxury goods. When the countries of design, manufacture and the parent brand are different, research suggests country of manufacture may matter most. Some products are strongly associated with a particular country, such as (in the Western world) silk with China, spices with India, wine with France, chocolate with Belgium, caviar with Russia cars with Germany.10. 9. Nagashima (1970). "Comparison of Japanese and US attitudes toward foreign products". Journal of Marketing, Vol. 31, No. 1. pp. 68–74. 10. Maheswaran & Cathy Chen Yi, Durairaj (8 February 2008). "Nation Equity: Country-of Origin Effects and Globalization" 14.

(16) If Country of Origin affects the consumers perception of the brand or the product and, as a result affect the strategy, the company chooses to attract the costumers. There are factors, which affect the internal behavior of the company, while entering the market. In the next section we are going to talk about Cultural Dimensions that affect the management behavior. 2.3.5 Home County Factors – Cultural Dimensions According to Kogurt and Singh (1988) there is increasing evidence that a firm’s business activities are influenced by its home country characteristics. Hofstede (1980) identifies several cultural dimensions that affect management of firms. One is power distance, which measures how individuals of different status are treated. In cultures of large power distance, Russia belongs to one of those, people of different status are treated unequally, and a hierarchy of power is valued. Firms from such home countries would prefer to have controls in their relationship with others. When they enter an overseas market, they would seek control by adopting nonequity-based entry mode. Being less willing to share power, these firms would avoid forming alliances with other foreign firms if possible. As it was said above, the enterprise from a large power distance culture will most likely choose the non - equity –based entry mode. For the non –equity –based entry mode we can name contractual agreements and export.. 2.4.Entry Mode One of the non-equity –based entry modes is export. There are two types of exporting: direct and indirect. Direct exports represent the most basic mode of exporting made by a (holding) company, capitalizing on economies of scale in production concentrated in the home country and affording better control over distribution. Direct export works the best if the volumes are small. Large volumes of export may trigger protectionism. The main characteristic of direct exports entry model is that there are no intermediary. (Bartett, C.A. 2009) To implement the direct export to the market the company can through the saes representatives. They provide support services to a manufacturer regarding local advertising, local sales presentations, customs clearance formalities, legal requirements. Manufacturers of highly technical services or products such as production machinery, benefit the most form sales representation.. 15.

(17) However, if the product is going to be sold through the retailing there should be other modes being applied. Hollander (1970) offers one of the first reviews of entry modes used by international retailers. He classifies them as purchase of existing stores and firms, participation in joint ventures, establishment of new foreign subsidiaries and franchising. Subsequently, Dawson (1994) provides a summary of the main mechanisms international retailers can use to enter new markets. They are: - internal expansion, in which a company opens individual shops using in-company resources; - merger or takeover with the acquisition of control over a firm in the host country; -franchise type agreements in which the franchisee in the host country uses the ideas of the franchisor based in the home country; -joint ventures which may take a variety of forms for the joint operation of retailing, including in-store concessions between a firm in the host country and one in the home country; and - noncontrolling interest in a firm in the host country being taken by a firm in the home country.. 16.

(18) CHAPTER III: RESEACH METHODOLOGY. 3.1. Research Methods This research is aimed to analyze the process of the entering the new market, by the product, completely unknown to it. This research constructs upon the understanding of the interviewee’s statements and observations of the market. In the study used an inductive reasoning approach is used since it is of a more open-ended and explanatory nature. This type of reasoning makes broad generalizations from specific observations. Scientists use it to form hypotheses and theories. Research methodologies applied in this research include literature review, case study, interviews, primary and secondary research. With a dearth of information available form. market and. academic resources, a priority and special significance has been placed on interviews and first had research (Trappey, 1998). Interviews focus on different related aspects of the gourmet food industry, including manufacturers, an importers, and distributors who specialize in gourmet food markets. I have chosen qualitative method for my research because it is generally flexible. It allows spontaneity and adaptation of the interaction between the researcher and the study participant 11. In my research I have asked “open-ended” questions that are not worded in exactly the same way with each participant. Empirical Material was collected over an eight month period of field world in Taipei, Taiwan and the research includes interviews, observations, study of written magazines and TV programs, specializing on gourmet food. During the research there was also conducted an experiment where three restaurants has been visited in Taipei and Taoyuan which serve black caviar as a part of entry dish.. 11. Yin, R.J. Case Study Research Design and Methods, 2 nd edition., London. 17.

(19) Interview questions focused on consumers, products and availability, distribution, pricing and margins, marketing strategies, competitors, success factors and the potential of distributing caviar in Taiwan. Through the interviews and survey on existing Gourmet Food distribution market it was an attempt to conduct market and environment analysis and evaluate weather Russian Caviar will sell well in Taiwan. Case study on GC Russian Caviar House helped to oversee their current position on Russian and Word caviar market and also helped to do some predictions about their future entering Taiwan market. According to Yin (1989) case study is a basic research method in social technology research; it is also a strategy of empirical research (Yin, 1989). In a case study, researchers can use any and all kinds of tools to do research, so they can use both quantitative and qualitative research based on the research requirements and purpose. According to Yin, case study is a possible way of investigating a “contemporary phenomenon within a real-life context, especially when the boundaries between phenomenon and context are not clearly evident.. 3.2. Reliability and Validity Even though all the participants of my interviews were the experts in their field, there could be some obstacles which could effect the results of the interviews. Subjectivity, relativism, interviewers’ bias as well as my relationship with the informant, my personal background, the settings, my gender, and age might also have influenced the data12. Hence the interviews allowed to gain insight into the subjects’ thoughts and experiences, which were cross-checked with other data, gourmet market implementation theories, and marketing strategies, as well as with researcher’s own personal observations.. 3.3. Ethical considerations All participants contributed voluntarily to the research, knew of the purpose behind the interviews, and gave their consent to the use of their statements for academic purposes. Some of the participants’ identities will not be disclosed for classified reasons.. 12. Kvale, S: Introduction to qualitative research interviewing; London., 1996. 18.

(20) CHAPTER IV: ANALYSIS OF CAVIAR MARKET In this chapter I am going to evaluate the product which is going to entry Taiwanese market; the world market of black caviar and the key producers. I am going to give characteristics of the market of black caviar in Russia, Europe and China.. 4.1. Product Analysis Caviar has always been a symbol of luxury, prosperity and wealth. It symbolizes a wealth of the highest degree. Caviar is a delicacy consisting of salt-cured fish-eggs of the Acipenseridae family. The roe can be consumed "fresh" (non-pasteurized) or pasteurized, with pasteurization reducing its culinary and economic value13. Traditionally the term caviar refers only to roe from wild sturgeon in the Caspian and Black Sea14 (Beluga, Ossetra and Sevruga caviars). Depending on the country, caviar may also be used to describe the roe of other fish such as salmon, steelhead trout, trout, lumpfish, whitefish, and other species of sturgeon.15Caviar is considered a delicacy and can be served and eaten as a garnish or a spread. 4.1.1. Storage and Nutritional Information Caviar is extremely perishable and must be kept refrigerated until consumption. Pasteurized caviar has a slightly different texture. It is less perishable and may not require refrigeration before opening. Pressed caviar is composed of damaged or fragile eggs and can be a combination of several different roes. It is specially treated, salted, and pressed. Worldwide term “Malossol” is used for the salted caviar. And you can see this word on almost every caviar cane from all over the world.. 13. lso Judith C. Sutton states that "pasteurized caviar doesn't taste as good or have the consistency of fresh caviar, and caviar lovers avoid it." ( in Judith C. Sutton, Champagne & Caviar & Other Delicacies, New York, Black Dog & Leventhal, 1998, p. 53.) 14 lan Davidson, Tom Jaine, The Oxford companion to food, Oxford University Press, 2006, ISBN 0-19-280681-5, ISBN 978-0-19-280681-9, p. 150. 15 A History of Smith Bros. branded whitefish caviar (1920 - 1989) (USA). 19.

(21) Table 2:Caviar Nutritional Facts16. As we can see caviar is precious not only in terms of it’s uniqueness and the rarity on the market and it’s price. It also valuable in terms of. richness on nutrients. Caviar is considered an. important antioxidant, vitamin A is necessary in order to protect your cells against diseases such as cancer. If a patient has undergone chemotherapy or medical surgery, the doctor might also recommend eating caviar regularly. This is because caviar can help the body increase its hemoglobin content. Hemoglobin is a red blood cell component that makes it easier for oxygen to travel throughout your body.17 Those who are caring about skin aging process would be happy to know that caviar is full of vitamin A, which helps to prevent skin aging processes.. 16. National Agricultural Library. "National Nutrient Database for Standard Reference, Release 25, Nutrient data for caviar". USDA. Retrieved 15 November 2012. 17 http://www.foodrepublic.com/2012/10/25/13-things-you-didnt-know-about-caviar. 20.

(22) 4.2. Caviar Origin There are twenty-seven different types of sturgeon, but the caviar of the beluga—the largest species, found only in the Caspian Sea—is the most famous. Sturgeon are an anadromous fish, which means they live in the seas, and commute up freshwater rivers to spawn. Sturgeon are born in rivers: in the Volga River, the Ural River and the Amur River Natural inhabitant places for the wild of sturgeon. Map 1: Natural inhabitation for the wild sturgeons. After the female lays her eggs, they are fertilized by the male sturgeon with milt. Tiny inch-long fingerlings are born within a few hours. Those fingerlings make their way down the river into the sea, where they live until they grow up. When the fish are mature, and it takes quite a while for them to mature, they start the whole trip back up the river. They are famous for trying to spawn in the spot where they were born, repeating the cycle of their parents. One of the reasons the sturgeon is in so much trouble now is, unlike most fish, they take quite a long time to mature. Beluga can take 20 years before sexual maturity. Even some of the smaller sturgeon take six to 10 years to reach adulthood and lay their eggs. When they finally mature, they go up the river. The Caspian Sea is the largest inland lake in the world, covering more than 386,000 sq. kilometers. It is one of the richest fisheries in the world and the source of the three most sought-after types of caviar: beluga, osetra, and sevruga. The beluga sturgeon is the largest—individuals can be four to six meters long and can weigh up to one thousand kg. 21.

(23) Beluga caviar is a grey/black color. The osetra, on average, is about two meters long and can weigh sixty to one hundred kg. Osetra caviar ranges in color from grey to brown. The sevruga is much smaller, about one meter in length, and can weigh fifteen to twenty kg. Caviar from the sevruga is grey/black in color.. Picture 1:Types of wild sturgeon. Populations of wild sturgeon have declined over the course of the 20th century and continue to be under significant threat from a variety of factors such as overexploitation, poaching and illegal trade, habitat destruction, migratory barriers and pollution of waterways.. 4.3. Caviar Production in Russia In early 2011, the Russian government ended its ban on caviar exports to Europe. The Russian government imposed this ban in 2002 in order to stop overfishing and poaching of sturgeon in the Azov and Caspian Seas. During the Soviet times, the main sources of the world's black caviar, the most coveted type of caviar, were the Azov and Caspian Seas. After the collapse of Soviet Union in 1990s, the caviar market became dominated by poachers and illegal overfishing. Sturgeon farms have emerged in Russia as an alternative to wild sturgeon. The amount of these farms is expected to rise. As the number of these farms grows, Russia may eventually regain its world market share of black caviar exports. In 2009, Russian fish farms produced around 2.6 22.

(24) tons of black caviar. Andreyev (the Minister of Agriculture) estimates that today these farms produce three times as much: from 6 to 7 tons. According to Russian fishery agencies, three fish farms set up 20 years ago are now working at full capacity. In the next few years, five or six similar farms will begin to yield results in caviar production.18 Producers of farm-raised sturgeon say that the taste of their caviar is every bit as good as that from wild sturgeon. Over the next five years, Russian fish farms are expected to increase deliveries of caviar to both the domestic and foreign markets. It takes about seven years to raise a sturgeon, and Russian’s nine year ban has provided time to raise new sturgeon. These farms may eventually make up a major source of exported Russian caviar, supplemented by some wild sturgeon-derived caviar. As caviar production shifts to farms and increasingly stringent penalties on poachers decrease illegal poaching of wild sturgeon, these wild sturgeon may be given an opportunity to repopulate and eventually allow Russia to increase its quota on wild sturgeon-derived caviar. In the next few years, five or six similar farms will begin to yield results in caviar production. Producers of farm-raised sturgeon proclaim that their caviar is exactly as good as caviar from the wild sturgeon. Over the next five years, Russian fish farms are expected to increase deliveries of caviar to both the domestic and foreign markets.. 4.4 The World Biggest Caviar Exporters There is no separate black caviar production statistics in the world. Nevertheless it is possible to estimate the black caviar production volumes using the statistics of CITES organization. CITES (the Convention on International Trade in Endangered Species of Wild Fauna and Flora) is international agreement between the governments. Its aim is to ensure that international trade in specimens of wild animals and plants does not threaten the survival of the species in the wild. However, in the following charts we can see the biggest players on the market:. 18. http://www.fish.gov.ru/. 23.

(25) Chart 1: the world’s largest caviar exporters. The above chart contains the largest caviar exporters in the world. Iran, Russia, Kazakhstan and Azerbaijhan. They produce caviar from the wild sturgeons, which were grown in their natural inhabitant area – Kaspy Sea. Iran doesn’t sell caviar to the local market because this type of fish and it’s roe considered as a dirty food, according to Islamic rules. It’s positively effects on it’s export size. However, from the year of 2007 to 20011 there was a ban on fishing osetra sturgeons in Kaspiy Sea in order to save the world’s population of wild sturgeon. However, yearly Iran exports around 438 tons of black caviar worldwide. The ban of the fishing sturgeon in Kaspian sea boost the production of black caviar in aqua – farms. Kibbutz Dan which is located in northern Israel has become a somewhat unlikely source for one the world's most exclusive marine delicacies – caviar. In 2007 95% of the caviar in the world came from the Caspian Sea and 5% from fish farms, and in 2012 the proportions are reversed: 90% already came from farms and 10% from nature . Right now Israel exports around 200 tonnes of caviar a year.19 Russia has been always either a monopolist on the back market, or took the leading positions. However, after sturgeon stocks in the Caspian Sea were nearly wiped out by overfishing and poaching, the fish – and its coveted eggs – are back in legal circulation.20 Right now Russia. 19 20. Source: CITES trade data for the years 1998 to 2012 http://rt.com/news/russia-sturgeon-caviar-export/. 24.

(26) exports about 13821 tonnes of caviar to Europe and other countries worldwide. The participation of Kazakhstan and Azerbajan is highly expected in this chart because these two countries have a natural resource of the wild sturgeon. Recently, China gained its possitions on caviar export maket, due to the raising ammount of sturgeon aqua-farms. According to analitics,the amount of caviar production in China is going to grow tremendeously have ambition to become world’s number one producer by the year 2021 22.. 4.5. The World Largest Caviar Importers According to trade statistics reported by countries to CITES,the European Union (EU), the USA and Switzerland are the largest importers of caviar,importing 81% of all caviar reported in legal international trade between 2000 and 2011. During that period, the volumes of caviar reported in international trade per year plummeted from a peak at 263 tonnes (t) in 2001 to 44 t in 20010. Among the 27 EU Member States, France and Germany are the largest importers. Besides their role as consumers, the EU and Switzerland are also important 'transit' points for caviar, which reexport to other countries over 50% of the caviar they import. Besides the caviar reported in international trade, considerable volumes of caviar are also consumed domestically in the countries of origin, for example in the Russian Federation and the USA.The majority of the caviar imported by the EU and Switzerland comes from Iran and the Russian Federation,the two ‘giants’ among the world’s caviar producers.. Chart 2: The world’s Largest Cabiar Importers. 21 22. Ibit 8. http://en.amurcaviar.cn/about.html. 25.

(27) 4.6. Illegal trade of caviar It is difficult to quantify the levels of illegal caviar trade, as this is by nature a hidden activity. What is known is often anecdotal and based on reported seizures and convictions. However, large seizures of illegal caviar in Europe indicate that there is a thriving black market in the luxury roe, which is threatening the survival of sturgeon species. They also demonstrate that caviar smugglers are well-organized and use sophisticated methods and the illegal caviar trade is considered to have strong links with organized crime groups. EU-TWIX,an online database,accessed exclusively by officials from the 27 EU Member States, helps law enforcers in the EU to fight wildlife trade crime. According to data reported to EUTWIX to date, over 7 t of illegal caviar were seized by European authorities from 2000 to 2007 (see text box on left).However,the real size of the illegal trade is likely to be considerably higher, given that much of it is undetected and information is incomplete for some importing countries. The illicit caviar trade is particularly difficult to control in the EU single market, where caviar that has been imported by one Member State can be moved freely between the 27 countries. Cooperation and information exchange is therefore of particular importance, not only between EU Member States, but also with neighboring and exporting countries.. 26.

(28) CHAPTER V: RUSSIAN CAVIAR HOUSE ENTERS TAIWANESE MARKET Case study The aim of this chapter is to provide an overview of the new entrant and also propose strategies for entering Taiwanese Market.. 5.1. Why Group of Companies “Russian Caviar House”? In Chapter 4 we discussed the issues of caviar production in Russia. It was said that there are 10 certified aqua farms which breed sturgeon and produce black caviar. GC Russian Caviar House is considered the biggest producer of black caviar in Russia nowadays. It is also the only company which was approved by CITES23 certifications to export caviar worldwide.. 5.2. Company Profile “Russian Caviar House” Group of Companies represents the world famous exclusive product called "caviar". Being undisputed leader among the caviar industry companies of the former Soviet Union countries, "Russian Caviar House" Group of Companies actively promotes Russian Federation restoration the fame of the Caviar queen of the world. "Russian caviar house" - a group of companies engaged in the cultivation of sturgeon and caviar sales. The group includes sturgeon aquaculture and enterprises engaged in fish farming in order to obtain their eggs and meat and sturgeon stocking material: . LLC "RTF" Diana. . Vologda OOO Sturgeon company. . JSC "Sashno". . Caviar House Boutique (Moscow, St. Petersbourg). 23. CITES (the Convention on International Trade in Endangered Species of Wild Fauna and Flora) is an international agreement between governments. Its aim is to ensure that international trade in specimens of wild animals and plants does not threaten their survival. 27.

(29) Alexander Novikov, the owner of the company, started his business in 1978 with an opening an experimental plot "Vologdarybprom" breeding and cultivation of fish. The company has a royal and repair (used to replenish the mother) herds of sturgeon, which allows it to not depend on the supply of fertilized eggs for further cultivation of marketable fish fry and other third-party companies. Caviar production company is 10 tons per year by 2014 is planned to increase to 12.5 tons. Today, Russian Caviar House sells its products not only in Russia but also abroad. For direct sales group companies opened branches in Kiev, Dubai and New York, Hong Kong and Singapore. During the activity the group of companies "Russian Caviar House" won several gold medals and diplomas at the international professional competition of food and beverages "Product of the Year" as part of WorldFood in category "Manufacturer", honorary diplomas and medals "For contributions to the development of food industry "within the framework of the international exhibition" Prodexpo "and diploma of the winner of the international competition" Best Product - 2012 "within the framework of the 19th International exhibition" Prodexpo-2012 "in the category" Best Innovative Product and the Grand Prix winner of the international competition "Best Product - 2013" within the framework of the 20th international exhibition "Prodexpo 2013" in the category "Fish seafood”. 5.2. 1 Black Caviar by Russian Caviar House. Russian Caviar considered as a benchmark in the world until the collapse of the USSR. The reason for it is that the raw material for caviar during its production passed the most rigorous selection process with various parameters, thereby providing the highest quality caviar. In this case for the export we use of all that was selected the best caviar of the best - you can say outstanding. Black Caviar, produced by GC “Russian Caviar House” - caviar of the highest quality, prepared in accordance with the old Soviet State Standard (GOST), and meeting the most demanding requirements previously applicable to caviar which was produced for export. There are several reasons, why caviar of this brand is unique. First of all, they do not use the chemical preservatives, while packaging the product. It is all just fish roes and salt. We have already mentioned this technique in the previous chapters. Secondly, Russian Caviar House interacts with Russian and foreign scientific - research centers and uses in its work the most advanced technologies, that allow them to control caviar production process on all stages, until it 28.

(30) will be delivered to their. customers. This fact makes customer sure that there are buying the. product of the highest quality and it is completely safe to eat. Finally, environmental conditions make northern river Suda on which we placed our aquacultural facilities, the perfect place to grow osetra sturgeon. 5.2.2 Russian Caviar House Brand. Alexander Novikov, the owner of group of the companies Russian Caviar House said in his interview that his main goal “to renovate the glory of Russian caviar worldwide”. Indeed, black caviar is iconic Russian delicacy, even though nowadays it is produced in different parts of the world. As for the group of the companies Russian Caviar House there are two main goals: 1. To develop a line of original products in delicacy category which would meet international quality requirements; 2. To create a brand which would claim the return to traditional caviar production standards and improve the image of Russia both at home and abroad. The company owner wants Russian Caviar House to demonstrate that the new Russia is again capable of producing superior quality product . In the process, it may improve the “Made in Russia” label will associate with the brightest and the most luxurious part of Russian culture. Russian Caviar House has a strong will to be an ambassador and personification of Russia in the same way as Mercedes with Germany, Channel with France and Versace with Italy. 5.2.3 Brand Identity. The personal owner’s affinity for luxury goods and ambitions to create the first truly premium Russian brand determined much to the extend the identity of Russian Caviar House Brand. “If you want to sell products to Russians, you have to look at their past. You need to understand who they are and what they will buy. Russian Caviar House brand makes sense because most of the Russians of our target auditory (aged 35-55) remember the glory of Russian black caviar worldwide. “That is why all the messages we have been sending to consumers are based on traditions. Our goal is to re-establish something that has been a tradition to Russians and introduce it to the whole world.”24. 24. https://russiancaviaruae.com/. 29.

(31) The name for the brand was very natural and easy name to create. It directly leads the costumer to the product, it’s country of origin and there are no further explanation needed. It’s also very easy to understand and remember for the foreigners. To say shortly, the brand embraces the past and inspires the progress. 5.2.4 The Brand Positioning on Russian Market. We have already mentioned that group of companies “Russian Caviar House” is the leading producer of caviar on Russian market. The company market share is around sixty percent. There are ten legal aqua farms, producing caviar in Russia. The following chart shows the biggest players on the market in Russia:. Chart 3: the Biggest caviar producers in Russia. According to Infolio Research Group, in 2011 the legal production on Black caviar market was represented by ten main aqua farms. The biggest four are represented on the chart above. Russian Caviar House produced about 10,5 tones of caviar, Beluga company produced about 2 tones; Raskat fishery - 1,2 т; Bashkir fishery — 900 kgs.. 5.2.5. Russian Caviar House Price and Quality Positioning. The price of the black caviar usually depends on the type of the fish, the size of the roe and the amount. However, it usually stays in the same segment worldwide and can not be cheap. In the following chart we are going to show the position of the black caviar by Russian caviar house the market according to it’s price and quality:. 30.

(32) Figure 1: GC “Russian Caviar House” compatitors on the mother market. On the chart above we can see the range of key caviar producers in Russia according to it’s price and quality. Even though the products of Russian Caviar House groups are the most expensive, comparing to it’s competitors, it is also reaches the top o the quality in the segment. This factors make the product’s of Russian Caviar House the most valuable and trustworthy on the market.\ Let’s closely analyze the line of the products of GC Russian Caviar House, presented on the market: 5.2.6 Product Line Description. Russian Caviar House sells black caviar in metal and glass canes size of 20 gramms (0,7 oz) 1 servings; 50gramms (1,75 oz) 1-3 servings, 100gramms (3,5 oz) 2-5 servings, 125gramms (4,4 oz) 2-7 servings, 250gramms (8,8 oz) 8-10 servings, 500gramms (17,6 oz) 15-20 servings 1000gramms (35,3 oz). There is also special back caviar packaging of special space addition. It is surved for austronauts in space, and this line is called ‘Kosmos. It is packed in the vacuum plastic package, size of 125 gramms (4,4 oz) and is good for 6-10 servings.25. 25. https://russiancaviaruae.com/. 31.

(33) Product. Description Premier Caviar. Light-gray clear eyes Premier Caviar. occurs in nature significantly rare.. Medium-sized. glossy grains with buttery flavor come to us from farmraised in pure water of forest river Russian sturgeon.. In. homeland, Russia, Premier Caviar is an attribute of the holiday and a symbol of wealth in the family. Price Range:. 20 grams - 47,08USD; 1000 grams -. 1959,51USD. Moskva Caviar. A favorite delicacy of the Russian nobility, Moskva Caviar is prepared according to the unique recipe of the 18th century. Moskva Caviar grains range in color from a light grey to a warm, rich black. Limited production. Price Range: 20 grams - 148.35USD -500 grams - 1419 USD Diamond Caviar Bright attribute of leadership and excessive wealth, the perfect gift among business elite, only original Russian Diamond A concentrate of majesty and unprecedented success in every grain.. Extremely rich in taste and. flavour, Diamond Caviar is the pinnacle of charm. It inspires. Limited quantities. Price Range: 50 grams – 270USD; 250 grams - 1249,75 Imperial Caviar. Nearly beyond the reach, Imperial Caviar - is the rarest Sturgeon caviar in the world.. Big-sized richly colored. caviar pearls evoke the feeling of unsurpassed taste. Each year it is possible to select only a few pounds of this delicacy.. This exclusive – golden caviar obtained from. the Russian Royal Sturgeon. Price : 150 gram 1212.21USD. 32. Very limited quantities..

(34) 5.2.7 Russian Caviar House Sales Geography. Map 1: Russian Caviar House On the map above we can see the presents of GC “Russian Caviar House” in different countries. Currently the branch offices are settled in Kiev, Ukraine, New York, the USA, Dubai, UAE, Hong Kong and Singapore. GC “Russian Caviar House’ also distributes their caviar to China, Japan, Korea and S. Africa. We can see that company is right now oriented on Asian market, because of it’s success in Singapore and Hong Kong. Right now we can see the production of Russian Сaviar House on the shelves of Singaporean upscale supermarkets and restaurants, restaurants and gourmet shops in Hong Kong.. 5.3 GC “Russian Caviar House” entering Taiwanese Market 5.3.1. Partners on the market and Location. From the literature review we have known that the entry mode is crucially important for the new entrant on the market. On this section I am going to briefly discuss the advantages and disadvantages of the options that the company can apply.. 33.

(35) Since we know that GC “Russian Caviar House” successfully opened their branch offices in Hong Kong and Singapore and distribute their product without any help from intermediary parties to the whole sellers, restaurants and, gourmet specialty shops. We believe that GC “Russian Caviar House” can apply this option to the Taiwanese market. Here we can see the advantages of this model: Distribution through the whole sellers have some vivid advantages and disadvantages: Advantages: Wholesaler provides accessibility to the market in order to boost brand presence, and provides the retailer with accessibility to the products. There is a number of upscale supermarkets and specialty shops in Taiwan that have a big choice of European Products 26. The presents of the caviar on the shelves may boost the awareness about the product Disadvantages: for the luxury goods sector in general, collaborating with a wholesaler might represent high risks for the brand image. Indeed, even though clauses in contracts can protect the brand and settle distribution conditions, there are always risks for the brand image. Since it cannot directly control its distribution, the distributors. may distort the brand identity through. irrelevant brand communication strategy. In the case of distribution through the wholesaler we have to make sure that salespeople are highly acquainted with the product. However, GC Russian Caviar House can also think about distribute their product in the retail sector. Above, we are going to talk about the options: Presentce through Franchise. It might be an option to choose franchising to expand the number of units. Advantages: The retail company then licenses its business to a franchisee or independent business person. While there are certain advantages to franchising stores, such as increased exposure in the marketplace, there are also disadvantages of having stores operated by licensees rather than directly by the company.. 26. Cleo Fu, Mark Ford, “Taiwan; Food Service Hotel-Restaurant Institutional” 12?06/2013. 34.

(36) Disadvantages: Even though it is an money – saving option and might be very attractive for the new comer to the market, it might occur the same as for the wholesaler partnership, the brand image may be weakened if the franchisee does not respect the brand guidance management. A close follow-up from the brand is essential. There is also a threat that the franchise branch may become the competitor in the matter of time. Directly Operated Business. In our case directly operated business will be represented through Russian Caviar House Boutique. Directly operated stores (DOS) help to increase margins in times of rapid growth and high demand and increase the market presence of the brands. However, in times of slower sales, the fixed cost of stores can drag down financial performance., the operation of the store will be the most expensive option, but the most successful one in terms of the right brand presentation and product distribution. Moreover, through directly operated shop it will be easier to represent the caviar eating culture and product itself.. Location According to Veda International Corp., marketing communication service company. the best locations in Taipei for a new upscale product to enter the market are: 101, Sogo and Breeze Center. In our case, the most suitable location will be Taipei 101. There are several reasons for that: . First of all, 101 mall is Taiwan’s premier international shopping destination, featuring luxury goods, fashion, and fine dining;. . Secondly, the mall is situated in the elite neighborhood of Xin Yi area, there is a big concentration of upscale property. The potential caviar consumers live around Xin Yi area and prefer to do their shopping in the malls around;. . Thirdly, Taipei 101 is one of the most visited touristic destinations. This tourists are eager to do an upscale shopping and usually, these are those customers, who do shopping emotionally, rather then reasonably. 35.

(37) On the map below you can see the location of Taipei 101:. Map 2: Map of Taipei 101 mall. 36.

(38) 5.3.2 Profit and Loss Prediction for the GC “Russian Caviar House”. As it was already mentioned in the previous section that it is always costly to enter the new market. In the set of exhibits below there are some roughly tailed expenses, which the company will face while entering the new market. There is obviously some data which was confidential for me. Despite this facts, it was possible to make a profit and loss statement with the main expenses while entering the market and the forecasting revenue the company should perform in order to reach the break-even point in approximately three years. The profit and loss statement in the analysis overlaps the time from year 2015 to 2017. For the construction and the utility costs have taken from the information for the cost of the store in Russia, Moscow, again, the price is rough and can be changed. Labor costs were taken from Adecco Taiwan requirement agency and from the National Development Council, Taiwan.. 37.

(39) Exhibit 1: Profit and Loss Statement for GC Russian Caviar House, 2015 Forecast 2015. Monthly. Annualy. Assets Costs Construction Cost. $9,000.00. $108,000.00. $9,000.00. $108,000.00. Sales Representive. $2,500.00. $30,000.00. Brand Manager. $3,000.00. $36,000.00. Sales Assistant (2). $1,500.00. $18,000.00. Loan + Rate Stock Evaluation Sub Total 1. Labor Costs. Bonus and Incentives Sub Total 2. $0.00 $7,000.00. $84,000.00. Rent (incl. Taxes). $13,500.00. $162,000.00. Management Fee. $800.00. $9,600.00. Marketing Fee Maintenance Retainee Agency Lawyer Accountant. $525.00 $350.00 $4,943.00 $2,150.00 $1,800.00. $6,300.00 $4,200.00 $59,316.00 $25,800.00 $21,600.00. $820.00 $250.00. $9,840.00 $3,000.00. $2,500.00 $225.00. $30,000.00 $2,700.00. $27,863.00. $334,356.00. Sub Total. $150,000.00 $150,000.00. $1,800,000.00 $1,800,000.00. Total Revenue Total Expenses. $150,000.00 $43,863.00. $1,800,000.00 $526,356.00. General Expenses. Headoffice Office Mail & Telecom Expenses Shipping Cost Insurance Advertising Cost Untilities (stationeries) Sub Total 3 Income (Forecast) 2015 Sales Revenue. 38.

(40) EBIT (Forcast). $106,137.00. $1,273,644.00. Exhibit 2: Profit and Loss Statement for GC Russian Caviar House, 2016. Forecast 2016 Monthly. Annualy. Assets Costs Construction Cost. $9,000.00. $108,000.00. $9,000.00. $108,000.00. Sales Representive. $2,500.00. $30,000.00. Brand Manager. $3,000.00. $36,000.00. Sales Assistant. $1,500.00. $18,000.00. Loan + Rate Stock Evaluation Sub Total 1 Labor Costs. Bonus and Incentives Sub Total 2. $0.00 $7,000.00. $84,000.00. Rent (incl. Taxes). $13,500.00. $162,000.00. Management Fee. $800.00. $9,600.00. Marketing Fee Maintenance Retainee Agency Lawyer Accountant. $525.00 $350.00 $4,943.00 $2,150.00 $1,800.00. $6,300.00 $4,200.00 $59,316.00 $25,800.00 $21,600.00. $820.00 $250.00. $9,840.00 $3,000.00. $2,500.00 $225.00 $27,863.00. $30,000.00 $2,700.00 $334,356.00. Income (Forecast) 2016 Sales Revenue Sub Total. $170,000.00 $170,000.00. $2,040,000.00 $2,040,000.00. Total Revenue Total Expenses. $170,000.00 $43,863.00. $2,040,000.00 $526,356.00. General Expenses. Headoffice Office Mail & Telecom Expenses Shipping Cost Insurance Advertising Cost Untilities (stationeries) Sub Total 3. 39.

(41) EBIT (Forcast). $126,137.00. $1,513,644.00. Exhibit 3: Profit and Loss Statement for Russian Caviar House, Taiwan, 2017. Forecast 2017 Monthly. Annualy. Assets Costs Construction Cost. $9,000.00. $108,000.00. $9,000.00. $108,000.00. Sales Representive. $2,500.00. $30,000.00. Brand Manager. $3,000.00. $36,000.00. Sales Assistant. $1,500.00. $18,000.00. Loan + Rate Stock Evaluation Sub Total 1 Labor Costs. Bonus and Incentives Sub Total 2. $0.00 $7,000.00. $84,000.00. Rent (incl. Taxes). $13,500.00. $162,000.00. Management Fee. $800.00. $9,600.00. Marketing Fee Maintenance Retainee Agency Lawyer Accountant. $525.00 $350.00 $4,943.00 $2,150.00 $1,800.00. $6,300.00 $4,200.00 $59,316.00 $25,800.00 $21,600.00. $820.00 $250.00. $9,840.00 $3,000.00. $2,500.00 $225.00 $27,863.00. $30,000.00 $2,700.00 $334,356.00. Income (Forecast) 2017 Sales Revenue Sub Total. $200,000.00 $200,000.00. $2,400,000.00 $2,400,000.00. Total Revenue. $200,000.00. $2,400,000.00. General Expenses. Headoffice Office Mail & Telecom Expenses Shipping Cost Insurance Advertising Cost Untilities (stationeries) Sub Total 3. 40.

(42) Total Expenses. $43,863.00. $526,356.00. EBIT (Forcast). $156,137.00. $1,873,644.00. 5.3.3 Advertisement and Communication Strategies Advertising is at the front of delivering the. proper message to customers and prospective customers. 27 Through the right choice of communication strategy and advertisement campaign will lead the company to persuade the costumers that their product is the best. Communication Strategy: GC “Russian Caviar House” has to be aware of the fact that Taiwanese consumers have a big choice of gourmet products and they have to be deeply persuaded to know that Russian caviar is the benchmark of the quality, nutrition and taste. 1. Since there is a limited choice of caviar on the market the first step of the communication campaign will be the creation of “Product Awareness” By utilizing free of charge social networks, like Facbook, Twiter and PIXNET cooking blogs. World –of- mouth strategy is the best to create curiosity about the product and communicate with the potential Taiwanese customers about the uniqueness and rarity of caviar in the world. In addition the communication campaign should educate Taiwanese customers about the history of caviar production and consumption in the West, and it’s country of origin should. Costumers should know that it is an iconic delicacy from Russia, and only Russian producers know special secrets about the creation of the best delight for their taste and the best treat for their health. The company should communicate through the history of their product, emphasize the rarity and uniqueness of their product This could be the way for customers to get accustomed with the logo of “Russian Caviar House” an create the awareness of the specialty of caviar from Russia. 2. Press Clippings and Local Celebrities: The “buzz effect” should be created not only through the Internet, but the “traditional media” such as magazines, and television should be involved. There are numerous TV programs,. 27. Taylor, John (1978). How to start and succeed in a business of your own. p. 293. 41.

(43) concerning food tasting and traveling, the message of the uniqueness of caviar eating tradition in Russia and Europe. The communication campaign also should educate consumers, especially women about the positive effect of caviar on the body, skin and health in general. Women, Men and Health magazines will be a great field for this campaign As the product is already known in Hong Kong and Singapore, to increase the desirability of this product, interviews and cooking masterclasses with famous chefs and gourmet specialists from Hong Kong and Singapore should be performed on Taiwanese in Taiwanese media. 3. Taiwanese Media should visit Russia and be introduced to the sturgeon breading and , caviar production and visit “Russian Caviar House” boutique in Moscow and St. Petersbourg. Through the visual message Taiwanese consumers will be in touch with the nobel luxury tradition in Russia, will be attracted to the beauty of the caviar consumption routene and won’t hesitate to try it in Taiwan Advertisement campaign: How should the company introduce caviar on Taiwanese market? 1- It should mention the history of caviar culture in Russia. Emphasize that Russian caviar was the benchmark on the world market. It should mention the unique handcraft technology in producing caviar. By these terms, Taiwanese consumer will be assured in the TOP quality and rarity of the product. 2- As it is very important to be green nowadays, and concerning the situation with endangered sturgeon. It must be mentioned, that by purchasing caviar from GC “Russian Caviar House”, the customer save the sturgeons in wild nature, and actually doesn’t kill the sturgeons in the farms. 3- Construct a clear and appealing brand equity: Russian Caviar House is the only exporter and the biggest caviar producer in Russia. GC “Russian Caviar House” sells not only the product but the symbol of prosperity and the power. Caviar is not only the attribute of the leadership and excessive wealth, it is a perfect reflection of the status.. 42.