What Will Make Kraft Foods the Company Highly Successful in Terms of Profitability and Brand Equity - Essay Example

? MARKETING PLAN Global Business Situation and Opportunity Analysis ………………………….. College ……………………………… ……………….. Words count: 1387 Executive Summary Globalization has significantly grown to become an irreversible phenomenon as it involves removing of trade and investment barriers across nations with a view to leverage the benefits of competitive advantage in relation to capital, knowhow and human capital. With international marketing, firms became able to create newer marketing domains by discovering hidden marketing opportunities or to find and develop newer markets with highly effective marketing strategies. Almost all the Fortune 500 and most successful brands are internationally renowned and highly established for that they have reached global customers with strong mission and vision to market distinctively. Scanning the potential business environments and analyzing business opportunities and strengths with threats and weaknesses are critically important components in developing and establishing a market. Kraft Foods is one of the largest food processor in North America and has now emerged to be the second largest food processor of the world as it went global and made its presence in more than 100 countries. As part of its further marketing development, the company proposes to launch one of its most successful brands- namely Philadelphia- in India and therefore the company requires careful assessing and effective analyzing of situational and environmental factors that may impact the company. Marketing plan is an important success pathway to building any market. This paper presents a brief analysis of global business opportunity and business situation of Kraft Foods in relation to its prospect to launch a new brand in prevailing market, India. Introduction Globalizing the market has become a strategic effort to defend or promote competition, because globalized markets endogenously intensify competition between firms and force them to be highly competitive, innovative and to use latest technological developments (Blossfeld, Klijzing and Mills, 2012, p. 5). Almost all the fortune 500 companies have globalized their business to seize greater opportunities from foreign markets. This paper analyzes global business situation and opportunities for Kraft Foods Group Inc in relation to its business prospect to launch one of its most reputable brands, namely Philadelphia to one of its existing markets, India. Company structure, Capabilities and Resources . Kraft Foods Group Inc. is 50th largest Fortune 500 companies (CNN Money, 2013) and is renowned to be a global snacks-powerhouse with varying brands that seem unrivaled for the reputation they gained. It operates food and beverages in North America considerable market position in Canada and other countries. It manufactures as well as markets refreshment beverages, liquid concentrates, coffee products, confectionary and grocery products and convenient meals in more than 100 countries (Reuters.com, 2013). It is a highly successful company in the way it has differentiated the products. It offers its products in a number of different brands such as Cadbury, Jacobs, Nabisco, Philadelphia, Trident, Maxwell House, Kraft etc (Reuters.com, 2013). Kraft Foods Group Inc. is very keen about preparing its recipe for positive change by reducing, reusing and recycling water and other important resources. The company put in efforts to make the difference by using less water for manufacturing and to reduce product packaging so as to produce less wastes (Kraftfoodscompany.com, 2013). Forbes (2013) ranks Kraft Food as the 46th world largest company for most powerful brand and as 63rd largest for most innovative firm. It employs more than 126,000 employees throughout the world. Products, Markets and distribution of Kraft Foods Kraft Foods offers mainly 7 different lines of products, namely baking & desserts, cheese & diary, coffee & beverages, deli meat & hot dogs, sauces & condiments, side dishes & meal helpers and snacks. The company manufactures and markets around 46 different brands in these products segments to its customers across the world. Out of these brands, Velveeta, Philadelphia, Maxwell are some of the most renowned and reported brands for that they have acquired greater brand equity and helped the company achieve larger revenues. McGrath (2012), the vice president of Sustainability for Kraft Foods, has proclaimed that the company always cares about fair trade chocolates. Kraft Foods is setting its own standards and quality measures to source through sustainable agriculture and thus maintaining the responsibility towards society and other stakeholders. Its products such as Velveeta Philadelphia and Maxwell provide customers with entertainment and zeal of healthy living. Kraft Foods performed a survey of its global consumers to determine whether its consumers were aware about the product, quality and value propositions. After getting a favourable survey response, Kraft Foods decided to further improve in its way of producing and marketing of goods by revitalizing and through business acquisition marketing campaigns (Magwood, 2011). This has helped the company revitalize and enhance greater advancements for marketing its brands in foreign countries. As more than half of total revenues of Kraft Foods reside outside of North America, the company requires adopting and procuring highly effective system of supply chain especially in order to maintain fresh and quality supplies as well as its snacks and other products. Competitive Environment and Industry Situation The food industry today, especially among global players, is highly competitive and is complicated environment being rooted in cross-cutting affiliations, strong or loose connections, formal as well as informal relationship and so on. As far as Kraft Foods is concerned, it is the second largest food and confectionary company just behind Nestle, with more than $95 billion of assets in possession. As Hsiao (2009, p. 15) noted, international trade and foreign production have significantly increased within the last twenty years. This has in turn intensified the global competition between firms, particularly for those companies that previously relied on national regulations to protect them from international competition. A major change in the food market is that retailers such as Wal-Mart, Carrefour, Tesco, Sainsbury’s, Marks and Spencer and hundreds of other large scale retailers are increasingly focusing on designing and developing their own private labels which will certainly impact the marketing and product range of food processors (Hsiao, 2009, p. 15). Traill and Pitts (1998, p. 199) stated that the food marketing environment is largely impacted by the competition and therefore they face stronger incentives to innovate and differentiate their products. Non-price competition has become more intense and food firms have to add larger investments for R&D, advertising and promotions, etc. Kraft Foods major opportunity and strengths include its presence in more than 100 countries with varying brands that have established stronger customer relationship and loyalty. Though large retailers make their labeling and thereby attract customers, Kraft Foods brand such as Velveeta, Max Well, and Philadelphia etc are well established and maintained stronger customer reputation. Synthesis of Strengths Relative to Potential Opportunity From the firm’s internal environment perspectives, Kraft Foods Inc has wide range of products that are highly differentiated in branding. The company has maintained better customer satisfaction and established innovative ideas and products. The company is widely renowned for its stronger Research and Development efforts and supreme quality achievements with its recent motto ‘make today delicious’. The company maintains its preferences for food safety and standards. Its 25 percent of global revenues are from emerging countries and more than 50 percent of global revenues derive from snacks and confectionary. Kraft Foods Inc is the number one in global confectionary and No: 1 in global biscuits. Company’s major focus in innovations and new product development give increased opportunities to find out hidden market opportunities. Kraft Foods can utilize the growing opportunities in emerging markets such as China and India. People’s concerns about trade fair, social responsibility, quality confectionary and food items, awareness of health, wellness and nutrition would certainly positively impact the business as the company always thrived for quality. Strategic Fit Evaluation and Opportunity Identified and Justified Strategic fit Analysis or evaluation is a tool to identify the strategic fit between a firm’s strategic intents, growth directions, strategic assets, functional strategies and capabilities and competitive posture as well as strategy (Srinivasan, Gupta and Gollakota, 2007, p. 205). A strategic fit analysis is essential when the company proposes to acquire or target another company so as to identify the fit and gaps between them. It often requires strategic return on invest analysis as well. Kraft Foods Inc is proposing to launch one of its most reputed brands Philadelphia in India with association of any other company having strategic fit between them. Kraft Foods Inc has already made commercial relation with Cadbury as there is greater fit of strategic relation and strategic directions. The same will be a better option for Kraft Foods in India to launch its brand Philadelphia. For this purpose, Srinivasan, Gupta and Gollakota (2007, p. 206) suggests the company to carry out a portfolio analysis to see the merger or acquisition might improve the mix of business and strategic activities between the businesses. Conclusion Kraft Food’s relentless effort to invest heavily on innovation and advanced technology will certainly make the company highly successful in terms of profitability and brand equity. Company’s concern on fair trade chocolates, differentiated products with more than 46 brands across the world, business acquisition marketing campaigns etc are some of the major opportunities discussed in this paper. Kraft Foods remains competitive due to that it has successfully maintained better customer satisfaction and established innovative ideas and differentiated products. This paper recommends that Kraft Foods’ intention to launch Philadelphia in the emerging markets of India will help the company add the numbers of satisfied customers who are extremely happy with Kraft Foods products and services. Research and Development efforts, innovation, greater focus on customer satisfaction etc will make the effort successful. References Blossfeld, H., Klijzing, E and Mills, M., 2012, Globalization, Uncertainty and Youth in Society: The Losers in a Globalizing World, Routledge Hsiao, H., 2009, Logistics Outsourcing in the Food Processing Industry: A Study in the Netherlands and Taiwan, Wageningen Academic Pub Kraftfoodscompany.com, 2013, Reducing our impact on environment and preserving resources, Retrieved from http://www.kraftfoodscompany.com/eu/en/responsibility/sustainability/reducing-impact.aspx Magwood, D.J.D., 2011, Kraft Foods Inc. - Marketing and Managing the Customer Relationship, Customer Think, Retrieved from http://www.customerthink.com/article/kraft_foods_marketing_and_managing_customer_relationship McGrath, C., 2012, Why Kraft Foods cares about Fair Trade chocolates, MIT Sloan, Retrieved from http://sloanreview.mit.edu/article/why-kraft-foods-cares-about-fair-trade-chocolate/ Reuters.com, 2013, Kraft Foods Group Inc, Retrieved from Reuters.com, http://in.reuters.com/finance/stocks/companyProfile?symbol=KRFT.O Srinivasan, G.G., Gupta, V and Gollakota, K., 2007, Business Policy and Strategic Management: Concepts and Applications, Second edition, PHI Learning Pvt Ltd Traill, W.B and Pitts, E, 1998, Competitiveness Food Industry, Springer Read More