Global Marketing Case Study

INTRODUCTION

This study will focus on assessing the opportunities of Heinz to approach the global market for the tomato ketchup product using the global marketing strategies. The company’s situation will be analysed and a marketing plan will be developed according to the situation in this study.

Situation analysis

This part will focus on analyzing the market situation that Heinz’s has gained throughout the time they have been operating.

STRENGTHS

  • Heinz’s ketchup has been manufacturing tomato ketchup for more than 120 years since 1886
  • Tomatoes have proven to have positive health benefits from thee substance ‘lycopene’
  • Heinz do not use genetically modified tomatoes for their production
  • Heinz own a secret recipe for producing ketchup that people find tasty
  • Has delivery lines in the world in more than 157 countries
  • Already has a market share of 60% in USA, 70% in Canada and 78% in the UK (wikiinvest 2014).
  • Use of sophisticated and improved technology to manufacture
  • Per unit cost being low due to mass production
  • Strong brand name and popularity
  • Innovative packaging styles and unique bottle design

WEAKNESSES

  • The products can’t be preserved for a long time which makes the shelf life of the product low
  • Rumors about health risks in processed food
  • Ketchup is not considered a “very healthy” food among health concerned people
  • Transport cost to deliver products from country to country

OPPORTUNITIES

  • Remaining 57 countries of the world to introduce the product
  • Expand and extend the products in the current market
  • Not using genetically modified material can used as a attention drawing slogan
  • Higher amount of money can be used for marketing and promotion due to high revenue generation
  • Can acquire small manufacturing companies in other countries

THREATS

  • Local ketchup producers in countries can offer products for a cheaper price due to having no transport cost
  • High cost of export taxes
  • Economic instability of the countries
Based on your Case Study Analysis in task 1, critically evaluate and discuss the Heinz’s drivers of global marketing presence

This segment will focus on the factors that influence Heinz from implementing global marketing strategies on their product – tomato ketchup

  • Gaining market leadership

As presented earlier Heinz has a market share of 60% in USA, 70% in Canada and 78% in the UK. They should have analysed and found out that they can increase their market share by developing a global marketing campaign to famous their products all over the world

  • Increasing profits and sales

Porter (2000), has said that the key to gain profits is to gain the lion’s share of market. The need of increasing revenue, sales and profits of the company can be done through acquiring a greater percentage of the market in the world. And acquiring market can be done with the use of a properly designed global marketing plan. Therefore the need to increase profits and sales has driven the Heinz marketing groups to plan and implement a global marketing campaign.

  • Re positioning the product

Positioning of a product is how that particular product is presented to the market and the customers. The position of the product will affect the buyer decision making and buyer behavior in the process of purchasing a product. Therefore the re positioning the product Heinz’s tomato ketchup can refresh the market it has, and make a new base of customers for the product.

  • International operations

When a product is marketed and distributed globally, the product gets the opportunity of being sold in any country under the same brand name and uniqueness. The global marketing will provide a sense of internationalism to the brand name and the product.

  • Value of share

When the Heinz’s tomato ketchup is marketed globally, it will attract the customers all around the globe and will become a world known consumer product. This will increase the price of the shares of Heinz orgnisation in the stock market. The company will develop a value for its shares and the value of the shareholders will increase. This will also create a demand for the shares of Heinz group in the sharemarket.

Discus how and why Heinz Company should consider social cultural conventions that may affect the buying behaviour of their global customers

According to Kerin (2012), there are several factors that affect the buyer behavior and buyer decision making. Social cultural factors, economical, financial, and attitudes are some of them. The social cultural background is a factor that differs from country to country, region to region and sometime in different areas of the same country.

In my opinion it would be the best decision for Heinz to use a blend of Standardization and localization. Which mean that they would sell the standard Heinz’s ketchup in the global market, and introduce localized ketchup products to the markets that match the preference of local customers. As a suggestion they can introduce extra spicy tomato ketchup for the people who prefer spicy food and vice versa. In addition they can localize the recopies to match the taste of locals while giving room for the standard products as well.

Outline the three year Heinz’s Global Marketing Presence Strategic Marketing Plan
  • Objective
  • To be the world’s favorite ketchup on EVERY table
  • Duration
  • 3 years
  • Budget
  • $50 million (According to the case study)
  • Market entry

Market entry methods

Figure 1: Market entry methods

Source: http://www.web-books.com/eLibrary/Books/B0/B64/IMG/fwk-tanner-fig02_014.jpg

“Market development” and “Diversification” strategies will be used for Heinz’s product.

The marketing mix

Product – with a unique bottle and wrapper introduced to the whole world. Without a GM tomatoes used, Heinz’s tomato ketchup will bring the taste of a real ketchup with use of secret recopies

Price – the ‘penetration’ strategy of pricing will be used to present a high quality product with a low price.

Place – the Heinz’s tomato ketchup will be distributed to existing 157 countries and another 51 countries will be considered for introducing the product

Promotion –

  • Use of effective communication
  • TV, Internet, Social media advertisements
  • Sponsorships – school football games

CONCLUSIONS

In the process of developing a global market presence for Heinz’s ketchup, it was identified that Heinz has a great opportunity of developing their market to the international. Heinz has a strong market situation compared with their competitors to approach the global market. The marketing plan created is expected to be ideal for the product.

REFERENCES

  • Case study material, (2014), Heinz case study, published by Business case studies
  • Kerin, R. (2012), Marketing, 11th edition, McGraw-Hill/Irwin Publishers
  • Scott, D. G. (2009), The advanced dictionary of marketing, Oxford University Press
  • Sernovitz, A. (2012), Word of Mouth Marketing: How Smart Companies Get People Talking, Greenleaf Book Group Press
  • Weick, C. E. (2009), Making Sense of the Organization, 1 edition, Wiley Publishers.

WEB REFERENCES

  • Heinz market share (2014), The market share of Heinz, (Online), Available from: http://www.wikinvest.com/stock/H.J._Heinz_Company_(HNZ) [Accessed on 11/10/2014]
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