Advantages and Disadvantages to Kraft Foods - Case Study Example

Case Study Analysis Case Study 1 Question 1: Advantages and Disadvantages to Kraft Foods (Cadbury) of producing new lower-calorie versions of their existing chocolate bars Evidently, Kraft Foods will benefit from producing lower calorie versions of the existing chocolate bars. The move will exhibit the company’s commitment to addressing issues related to obesity by promoting healthy eating habits. The customers of the company, as well as the community, will recognize the company’s commitment to promoting the health agenda of producing healthy food products for customers. If the company makes this move of altering the calorie level in their products, it will gain a positive reputation from different stakeholders. Since the emphasis on healthy eating has become more evident, stakeholders criticize companies that do not produce healthy products. Therefore, if Kraft Foods starts producing healthier products, it will establish positive relationships with different stakeholders. The move will also depict that the company is committed to corporate social responsibility (Lussier 2008, p. 223). On the other hand, the company is likely to lose some of its customers because the new versions of chocolate will have a different taste. Notably, the esteemed customers of the company have been consuming its products because of their unique taste. However, lowering the calorific value of the chocolate versions will alter the product taste. Many customers may not like the new taste. The company will also incur new costs in production. Worth noting is the fact that the company will need to source ingredients that will be used in the production of lower calorie chocolates. In addition, the company will need to spend on advertising and promotion strategies in order to introduce the new versions into the market. Question 2: How likely do you think it is that the UK government will bring in legislation to tax high-fat food products like chocolate? Why do you think that? In my opinion, the UK government is likely to introduce legislation that will require taxation of high-fat food products like chocolate. Since the government has experienced the financial burden resulting from medical costs associated with the high morbidity cases resulting from obesity, it is likely to take new measures. The government is also concerned about the health of children and adolescents who are more affected by high-fat food products such as chocolate bars. Therefore, there are higher chances that the government will intervene (Lussier 2008, p. 223). Question 3: Why do you think that Denmark repealed its fat-tax law after only 12 months? What are the implications for Danish chocolate manufacturers like Toms International? Denmark repealed its fat-tax law after the realization that it contributed to increasing consumer prices for the high-fat products. The tax did not motivate companies to produce healthier products. On the contrary, the tax law increased consumer prices, and the consumers had to bear the financial burden. Case Study 3 Question 1: What is an international market segmentation? What challenges does it pose to Bentley? International market segmentation denotes the process of identifying foreign countries or consumers in emerging markets that have similar consumer behaviours and with a similar product related needs. Companies identify such consumers who would respond positively to its products and the associated marketing strategies. The Bentley Company faces the compulsion of carrying out effective international market segmentation. Therefore, it faced challenges in carrying a country analysis, as well as a consumer level analysis. International market segmentation requires rigorous research a factor that translates to cost on the side of the company. Question 2: Using the full spectrum of segmentation variables, describe how Bentley segments and targets the international luxury car market Bentley has given attention to different segmentation variables. It has implemented geographic segmentation by grouping its customers based on countries or regions. The company has identified target markets such as the United States, The United Kingdom, Brazil, and China. In addition, Bentley has given attention to the demographic segmentation. In its older markets, the company targets the older customers with a high income and who have achieved a lot in their career. Such customers belong to the upper social class. Bentley has taken into consideration psychographic segmentation. Unlike in the past, the company seeks to design products that conform to the interests, activities, habits, lifestyle, and behavioural patterns of consumers. For example, this strategy has worked in the emerging market. Bentley motors have also used behavioural segmentation as the company considers product benefits, and the price conscious of the consumers when designing the marketing mix (Czinkota & Ronkainen 2013, p. 219). Question 3: Has Bentley differentiated and positioned its brand effectively? Explain Without doubt, the Bentley Company has focused on product differentiation and positioning. In the emerging markets, the company has introduced luxurious cars that add value to the lives of customers. In addition, the company has sought to enhance the quality of its products in an effort to meet the need of customers in the emerging market. In terms of positioning, Bentley has sought to ensure that it established a unique brand positioning, which is of high significance to the niche market. Through effective positioning, Bentley has sought to take advantage of the identified market niches in the emerging economies such as Brazil and China (Czinkota & Ronkainen 2013, p. 220). Question 4: Given the economic downturn in developed economies and the slowdown in emerging economies such as China, will Bentley continue to grow? Why or why not? In my opinion, Bentley can only continue to register success in the Chinese market if it carries out rigorous research on the emerging needs of the Chinese consumers. Although Chinese consumers are initially excited about western goods, their consumer behaviour will change over time. Therefore, success in emerging economies will require advanced research in meeting the consumer needs. In developed economies, Bentley can only continue to grow. It implements new business and marketing strategies that will ensure new products are launched into the market and that consumers are interested in the products. Question 5: What recommendations would you make to help ensure Bentley’s future growth? Bentley should seek to understand the psychographics of consumers in the emerging markets. Psychographic segmentation seems to be more effective in emerging markets. The company should also undertake rigorous research in understanding its old and new markets. Findings from the research will help the company determine effective strategies for marketing. Bibliography Czinkota, M. R., & Ronkainen, IA 2013, International marketing, Mason, OH: South-Western Cengage Learning. Lussier, RN 2008, Management fundamentals: Concepts, applications, skill development, Mason, OH: South-Western/Cengage Learning. Read More