Exploring with Case Studies Global Food Industry....4 P

1. Global Retailing in Food Industry
Dhruv Sood
dhruvmax@gmail.com

2. Disclaimer
•What we discuss in the Seminar can put you
imagination but we will always need your
attention
•With imagination It will cause lot of Salivation –
Request you to please control.
•Presentation Fuels Hunger – Good time because
soon going to be Lunch.
DISCLAIMER

4. Cheese - MOZZARELLA

7. Italy Gorgonzola- Blue Cheese

9. Why Food is Global Industry
• MIGRATION: Population of Indian in Canada
increasing. This creates increased demand
Indian Food. So retailing formats open to
provide Indian Food.
• TOURISM : As people travel abroad they
experience International Foods and thus the
demand increases in the home country.

10. Imports
• When Quantity not large, companies resort to imports and then distribute
to chains.
India Town Food & Spices Toronto, ON
India Town Food & Spices is an Indian/Pakistani/Sri Lankan Grocery &
Spice Store in Toronto, Ontario suitable for shopping of Indian, Islander
and Pakistani Groceries, Frozen Indian Meals, Sweets & Snacks and
Chutneys.
your favorite products from India such as Amla Juice, Ginger & Garlic
Powder, Canned Vegetables, Pooja Vidhi Items, Coconut Water With Pulp,
Jeera Powder, Incense & Dhoop Sticks and Tandoori Masala.
Buy Indian branded products such as Maya Sweets, No mark, Indian Tree,
Vicco, Tajmahal Tea and Bolst’s.
Contact Details
Address: 641 Markham Road Toronto, ON
Telephone: 416-438-1013

11. MARKETING MIX

12. Product
• Is it improper for firm to create the
product first and then look for places
to sell?
OR
• They should determine the
Consumer and then develop the
Product.

13. KFC- Products & Variations
KFC's original product is pressure fried chicken
pieces, seasoned with Sanders' recipe of 11
herbs and spices. The constituents of the recipe
represent a notable trade secret. Larger
portions of fried chicken are served in a
cardboard "bucket," which has become a well
known feature of the chain since it was first
introduced by franchisee Pete Harman in 1957.

14. KFC- Products & Variations
In early 1990s, KFC has expanded its menu to
offer other chicken products such as chicken
fillet burgers and wraps, as well
as salads and side dishes, such as French
fries and coleslaw, desserts, and soft drinks,
the latter often supplied by PepsiCo.

15. KFC
• KFC adapts its menu internationally to suit
regional tastes, and there are over three hundred
KFC menu items worldwide.
• Some locations, such as the UK and the US, sell
grilled chicken. A small number of US outlets
offer an all-you-can-eat buffet option with a
limited menu.
• In predominantly Islamic countries, the chicken
served is halal.
• In Asia there is a preference for spicy foods, such
as the Zinger chicken

16. Buffet Menu

17. Conclusion : Product
In the Global Markets
• Process May require a Modified
Product
• May require a completely New
Product

18. Lays Chips in Thailand

19. Lays Chips in USA

20. Lays in Saudi Arabia

21. Challenges for Companies
• Multinational companies have to understand
culture/food habits of each country and then
launch modified products
• Some standardised products can be offered to all
– Like the Salted Classic Lays
– Gulf Countries – Cant Sell without Halal on Non – Veg
• Special Focus on Packaging
– Size – Price sensitive countries – Smaller Size
– Packaging – Cant use Green Color in GULF – Sacred for
Muslims.

22. Food Safety
• For Distribution of Food – Each country has its
own registration and compliance process.
• Each Countries have different Safety Norms –
Some More Stringent and Some Less.
• Food Testing

23. Labeling Norms
• With awareness on Food Safety . Labeling
norms have become very important
• Each country has its own standards
• If not followed organisation could face Big
Problems

24. Agencies on Food Safety

25. So when organisations face so many
challenges of Product what is the way
out for Behavior

26. Geocentric - Approach
• Whole world is the Target Market . Denationalised
• Countries are different but differences can understood and managed
• Resources are allocated without considering national frontiers
• There are no International Division or foreign Markets as its not
differentiated
• Geocentric Companies don’t identify with any one country. Home Country
is identified from Base of Headquarter .
• HQ can be moved to more Hospitable Country for benefits like Taxes etc
• Marketing : Understand Local needs within broader Framework of Total
Strategy
• Important to coordinate acitivities between Subsidiaries and HQ
• Decision Making : Centralised & Decentralised in synergy to allow degree
of flexibility
• Corporation provides guidance for maximum efficiency. But decentralises
local functioning

27. Place/ Mode of Distribution

28. Place/ Distribution
• Place is part of the Marketing Mix
• It is not as simple as to export
available products from one country
to another.
• Distance between Markets is not so
important

29. KFC IN AUSTRALIA
• Yum! directly operates 160 KFC outlets in Australia Australia
• There are over 600 KFC outlets in Australia, and around 100 in New
Zealand . KFC was the first American style fast food chain to open in both
countries.
• Yum! directly operates 160 KFC outlets in Australia. The largest of the 53
independent franchisees in Australia is Collins Foods, which operates 169
stores.[
• The first Australian KFC was opened in 1968 in Guildford, a suburb
of Sydney.The franchise was owned by a Canadian entrepreneur called
Bob Lapointe. Between 1970 and 1971, 75 outlets were opened.[By 1995
there were 452 outlets, and the company employed 12,000 staff.[ That
year, Australia produced 3percent of KFC's international earnings.

31. Wall Mart – News
• Wal-Mart said Friday it will close 269 stores across the globe, including 154 in the
U.S. The world's largest retailer also will open as many as 405 stores globally in the
coming fiscal year, as it shifts its focus toward Supercenters and Neighborhood
Markets in profitable locations.
• In all, 16,000 employees will be impacted by the store closings, about 10,000 of
whom are in the U.S.
• The domestic store closures will mostly impact the company's Walmart Express
stores, which account for 102 of the closings. These small stores, which are
comparable in size to a dollar store, had been in pilot since 2011. They were
rebranded as Neighborhood Market in 2014.
• Also domestically, Wal-Mart will also close 23 Neighborhood Market stores, 12
Supercenters, seven stores in Puerto Rico, six discount centers and four Sam's
Clubs.
• Internationally, Wal-Mart is closing 115 stores, including 60 recently shuttered,
unprofitable stores in Brazil, which represent about 5 percent of that market's
sales. The remainder of the stores are primarily small, money-losing stores in other
Latin American markets.

32. • Companies need to Understand each
distribution model for each country
• Threat of Internet : E-tailing
• Producer companies may not loose but
distribution companies might have a problem.

33. Conclusion
• International Marketing is not repetition of using
identical strategies abroad .
• 4P must be integrated and coordinated across
countries to bring most effective marketing mix that
will facilitate an exchange.
• Some times Marketing Mix has to be adjusted for
particular markets for better impact.
– Coca Cola Germany – Berry Flavored Fanta
– Coca Coal Turkey – Pear Flavored Drinks
• Multinational Marketer may use Standardization if the
market difference are artificial and can be over come .

34. Some More Concepts………

35. International Dimension of Marketing
• Domestic Marketing : Marketing Practices within
a Marketer’s Home Country
• KFC Marketing in USA is Domestic Marketing
• Foreign Marketing : Marketing Methods used
outside The Home Market .
• KFC Marketing in China is Foreign Marketing
• Comparative Marketing: Purpose is to contrast
the two or more marketing systems
• Difference between Marketing in USA & China
give Comparative Marketing

36. Domestic VS International Marketing
• Domestic Marketing : has one set of Uncontrollable
Variables from domestic market
– KFC popularized chicken in the fast food industry, diversifying
the market by challenging the established dominance of
the hamburger.
– Sanders and KFC used hydrogenated vegetable oil for frying,
– 1980s the company began to switch to cheaper oils such
as palm or soybean.
– In the 2000s it became apparent that these oils contain
relatively high levels of trans fat, which increases the risk
of heart disease.
– By April 2007, the chain had switched to trans fat-free soybean
oil in all of its US outlets.

37. International Marketing
• Involves 2 or more sets of Uncontrollable
Variables originating from various countries.
Marketers need to cope with different
– Cultures
– Legal
– Political
– Monetary Systems

38. KFC – India
• KFC opened in Bangalore 1995 and shut down due to large protest.
• KFC re-entered Bangalore in 2004 with a localized menu that was
the most extensive meat-free menu across the chain's worldwide
operations.
• It introduced a vegetarian menu that included rice meals, wraps and
side dishes and, like McDonald's, served eggless mayonnaise and
sauces. Unnat Varma, marketing director of KFC India, states "The
vegetarian offerings have made the brand more relevant to a larger
section of consumers and that is necessary for KFC's growth."
• 2014, KFC launched the "So Veg, So Good" menu as part of an India-
specific promotional strategy focused on enhancing their vegetarian
range. Dhruv Kaul, marketing director of KFC India, stated, "The So
Veg, So Good menu launch does not mean that we are moving away
from our core chicken offerings. It enhances and strengthens our
existing vegetarian range and helps broaden the brand's relevance in
a diverse country such as India.

39. International Marketing VS Global
Marketing
• International Marketing : Marketing Between
nations .
– Operates out of a Home Country.
– The firm is not a Global Citizen of the world
• Global : Some Firms use GLOBAL as they don’t
distinguish between foreign or domestic
• **** International /Global / Multinationals are
used interchangeable .

40. Environmental Divergence & Convergence
Foreign
Country 1
Foreign
Country2
Home
Country
Two or more set of
Environmental Factors
overlap Indicating
SIMILARITIES are shared
by countries.

41. A firms marketing mix is determined by the uncontrollable factors within each country
•Over lap indicates the degree of change required for the marketing mix

42. Applicability of Marketing
• Marketing Concepts is widely applicable .
– Not dependent on Political , Social & Economic
System of Country
• But Practice of Marketing Differs Country to
Country
– Consumers around the world may not get satisfied in
the same way
– Consumers are around the world are different –
Culture , Social , Economic
• Conclusion : Never use same Marketing Strategies
in Different Environments or countries.

43. Benefits of International Marketing
• Survival & Growth
• Sales & Profit
• Diversification
• Inflation & Price Moderation
• Employment

44. SPREAD OF KFC IN THE WORLD

45. Survival & Growth
• Domestic Markets Saturates & they are forces to
explore alternative marketing opportunities
overseas.
• For Companies need to Survive , they need to
Growth
• Most Countries are not as fortunate to have Size ,
Resources & opportunities like USA or China
• European Nations are relatively small , so they
need Foreign Markets to achieve Economics of
Scale .Think of Countries like Singapore
• World Markets are 4 times larger than USA

46. KFC
• Till 1964 KFC was limited to Only USA and sales
were saturating
• They Started going international through
Franchising and Direct Outlets
• UK First Out let in 1965
• Philippines in 1967
• Australia First outlet in 1968
• First Out let in Japan in 1970…………………………
• China : 1987……………

47. Sales & Profits
• Foreign Markets Constitute Large Share of
total Business of Many firms
• Price Differential among Markets
• Higher Profit : Some times competition in
domestic markets Limits firms Profit. They
may benefit from Higher Profit Margins in
International Markets

48. KFC
• KFC sales in China Increased by 28% While
Sales in US Dropped by 7%
• KFC third quarter Operating Profit Jumped by
26% , While it Rose only by 1% in USA

49. Diversification & Risk Spreading
• Demand for Products is affected by Cyclic
factors as recession , Seasonal Factors like
Climate , Political Factors like war.
• Can lead to Sales Fluctuation and thus losses.
• Entry into multiple markets spread firms Risk .
• It evens out the Fluctuations.
• Provides outlet for excess production capacity
– Justifying ECONOMICS OF SCALE

50. • Soft drinks sales get depressed in COLD
weather in Europe. Yet all countries don’t
enter winter at all times. Some countries are
relatively hot .

51. Inflation & Price Moderations
• Imports are beneficial to country
– Constitutes as reserve capacity for local economy
– Imports keep prices in Domestic Markets
Moderated. Otherwise Firm tend to benefit by
Raising Prices thus resulting in Inflation
– Imports forces Firm to remove in-efficiencies &
Improve Quality

52. Conclusion
• We need to understand the importance of
International Marketing in current times
Globalization of Our Domestic Markets in
India
• Marketing is widely applicable .But Practice of
Marketing Differs Country to Country
• Never use same Marketing Strategies in
Different Environments or countries.