Mkt250 p5ip the global marketplace
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This document discusses Food Market Inc.'s potential expansion into the German market. It analyzes Germany's infrastructure for distribution, promotion, and pricing. It also examines Germany's capacity to utilize Food Market Inc. by reviewing the country's educated population, middle-class demographic, and median age. Additional sections cover Germany's culture, religion, politics, and potential demand. The document concludes that Germany presents a favorable situation for Food Market Inc. to expand due to its diverse population, strong economy, positive political relations, and position within the European Union.
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Mkt250 p5ip the global marketplace
- 1. The Global Marketplace: Germany MKT250 Phase 5 IP
- 2. Food Market Inc.: Expansion to Germany Joint Venturing – Joint Ownership 1. Partnership with German Company offers insight and guidance to Food Market Inc. (Armstrong & Kotler, 2011) 2. Find local suppliers and distributers meeting Food Market mission and quality standards (Armstrong & Kotler, 2011) 3. Aid adaptation of Food Market Inc. to German Market with products and services (Armstrong & Kotler, 2011)
- 3. Germany: Infrastructure Distribution 1. Airports – 549 total; 330 paved runways 219 unpaved runways (Central Intelligence Agency, 2011) 2. Railway system – Ranks 6th largest in world (CIA, 2011) 3. Roadways – Ranks 11th in the world (CIA, 2011) 4. Waterways – Rhine River, Danube Canal links North and Black Seas (CIA, 2011)
- 4. Germany: Infrastructure Promotion 1. Television advertisement very limited and costly (Armstrong & Kotler, 2011) 2. Mobile phone advertising more accepted and less costly (Armstrong & Kotler, 2011)
- 5. Germany: Infrastructure Pricing 1. Competitive (Armstrong & Kotler, 2011) 2. Value based (Armstrong & Kotler, 2011) 3. Going-Rate (Armstrong & Kotler, 2011)
- 6. Germany: Capacity of Market Can Germany utilize Food Market? 1. Highly educated general population (U.S. State Department, 2010) 2. Majority middle-class income demographic (CIA, 2011) 3. Median age mid-40’s good target segment for promotion of healthy lifestyles (CIA, 2011)
- 7. Special Considerations or Impact and Demographic Environment Culture 1. Majority of population is “ethnic German” however large population of roughly 7 million non-German residents also present (U.S. State Department, 2010) 2. One of the best education systems in the world (U.S. State Department, 2010) 3. One of the most technologically advanced nations in the world (U.S. State Department, 2010) 4. One of the most economically productive nations in the world (U.S. State Department 2010)
- 8. Special Considerations or Impact and Demographic Environment Religion 1. 34% Protestant (U.S. State Department, 2010) 2. 34% Catholic (U.S. State Department, 2010) 3. 28.3% Unaffiliated or other (U.S. State Department, 2010) 4. 3.7% Muslim (U.S. State Department, 2010)
- 9. Special Considerations or Impact and Demographic Environment Politics 1. Political system is a product of post-WWII influence of the United States, Great Britain, France and the U.S.S.R. (U.S. State Department, 2010) 2. Recently West and East Germany reunified (U.S. State Department, 2010) 3. Political parties limited to seating based on ability to hold a minimum 5% of vote (U.S. State Department, 2010) 4. Political parties known to partner and form government coalitions (U.S. State Department, 2010)
- 10. Germany: Potential Demand for Food Market Inc. 1. Favorable diversity in population (U.S. State Department, 2010) 2. Favorable economic situation within Germany (U.S. State Department, 2010) 3. Favorable political climate between U.S. and Germany (U.S. State Department, 2010) 4. Favorable position of Germany with rest of European Union (U.S. State Department, 2010) 5. Potential demand for Food Market will be high with room for future growth (U.S. State Department, 2010)
- 11. References Armstrong, G. & Kotler, P. (2011). Marketing: An Introduction tenth edition. Upper Saddle River, Pearson Prentice-Hall. Retrieved from Retrieved from http://campus.ctuonline.edu Central Intelligence Agency (2011). The World Factbook: Germany. Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/gm.html#top Priest, M. (2008) German Business Etiquette, Manners & Cross-Cultural Communication and Geert Hofested. Retrieved from http://www.cyborlink.com/besite/germany.htm U.S. State Department (2010). U.S. Department of State: Diplomacy in Action: Background note: Germany. Retrieved from http://www.state.gov/r/pa/ei/bgn/3997.htm
Editor's Notes
- Hello everyone, thank you for joining me for my presentation on The Global Marketplace, expansion to Germany! Please help yourselves to refreshments and when everyone is seated we will get started!
- In consideration of the decision for the expansion of Food Market Inc. into the nation of Germany it is recommended that the entry strategy of best choice for Food Market Inc. would be that of a Joint Ownership Venture (Armstrong & Kotler, 2011). This entry strategy is a little more risky than simply exporting Food Market products or other joint venture methods however it also offers the most gain next to direct investment while minimizing some of the bigger risks involved with direct investment (Armstrong & Kotler, 2011). Joint Ownership will allow for Food Market Inc. to work with a partner company from within Germany that can provide guidance in finding local suppliers and distributers that meet the mission and quality standards for Food Market Inc (Armstrong & Kotler, 2011). Partnering with a German company can have additional benefits including localized adaptation of products to the tastes of the German market as well as helping Food Market Inc. avoid embarrassing or potentially catastrophic marketing or advertising blunders during product promotions (Armstrong & Kotler, 2011). Lastly working within a partnership with an experienced German company will help Food Market develop necessary skills and experience with currency exchange, political and legal aspects of regional trade agreements and the European Union itself (Armstrong & Kotler, 2011).
- German infrastructure in terms of distribution capabilities is relatively good between cities where 77 percent of the population resides (U.S. State Department, 2010). There are a total of 549 airports throughout the country (CIA, 2011). Germany has the 6th largest railway system in the world with 41,981 km. of railway (CIA, 2011). The nation has 644,480 km of paved roadways including local roads and expressways (CIA, 2011). Germany is linked to both the North Sea and the Black Sea through the Main-Danube Canal (CIA, 2011). Shipping by water is primarily done along the Rhine River (CIA, 2011). In addition Germany has nine terminals and ports country-wide (CIA, 2011).
- Promotion of Market Food Inc. products should find a willing and interested audience in the German Market (CIA, 2011). Food products make up a large part of products imported into the nation with the three biggest importers being China, the Netherlands and France (CIA, 2011). Local agricultural growers and suppliers are available with certain food products frequently listed as exports suggesting a high likelihood of locating fresh sources of product for Food Market Inc. (CIA, 2011). Food Market Promotion of products is difficult and expensive in terms of television commercials in Germany but less expensive and more common via mobile phone advertising (Armstrong & Kotler, 2011).
- German currency is the Euro with an exchange rate of 0.755 to the U.S. dollar as of 2010 (CIA, 2010). Pricing of products in Germany will likely necessitate Food Market making necessary adjustments in terms of product pricing for German markets including payment in Euros as well as currency exchange rates (CIA, 2010). It would be recommended that Food Market Inc. become comfortable with the Euro making all necessary business related purchases and expense payments within the German market in the currency it is accustomed to (Armstrong & Kotler, 2011). Pricing should be competitive to the existing industry market within Germany without resorting to “dumping” which can violate trade agreements (Armstrong & Kotler, 2011). Value-based pricing and going-rate pricing would be suggested alternatives based on market and recommendations of German partners (Armstrong & Kotler, 2011).
- The capacity of the German market to utilize products from Food Market Inc. is fairly wide for many reasons. The vast majority of the German population is concentrated in urban centers (U.S. State Department, 2010). The population is highly educated and well acclimated to the idea of diversity with regard to food products (U.S. State Department, 2010). Median age ranges in Germany is 44.9 years of age an age placing the majority of the German market within a target segment to which healthy food is a consideration (Armstrong & Kotler, 2011). Germany also boasts a large middle-class majority in terms of income making it likely that food purchases will be made on value-based and going-rate prices (Armstrong & Kotler, 2011).
- The German culture while predominantly native German boasts a large Turkish population as well as several smaller minority groups from other nations (U.S. State Department, 2010). Germany is a favorite destination of “political and economic refugees from developing nations” (U.S. State Department, 2010). A Danish minority has settled in the north of Germany while a small Slavic minority has settled in the eastern part of Germany (U.S. State Department, 2010). German culture has been heavily influenced by other nations post World War II and recently undergone re-unification between Western and Eastern portions of the country (U.S. State Department, 2010). German culture is heavily individualistic, has a strong belief in equality and opportunity for all citizens and is comfortable with change (Priest, 2008).
- Germany is predominantly Protestant and Catholic Christian with a large percentage of “non-affiliated or other” (U.S. State Department, 2010). There is a small Islamic minority within Germany as well (Priest, 2008). This can be very useful in choosing products for Food Market based on religious dietary restrictions (Armstrong & Kotler, 2011). Likewise Food Market products within Germany may be held to fewer restrictions regarding religious dietary needs (Armstrong & Kotler, 2011). Food products may also be marketed in relation to religious holidays such as Easter and Christmas for Protestant and Catholic segments and Ramadan for Muslim market segments (Armstrong & Kotler, 2011).
- The political system in Germany is the product of post WWII occupational control by the United States, Great Britain and France in West Germany and the Soviet Union in East Germany (U.S. State Department, 2010). Government re-structuring was itself a long process and re-unification between West and East Germany took place in 1990 (U.S. State Department, 2010). The Government is primarily parliamentary in nature with a President and a Chancellor as well as a legislative and judiciary system (U.S. State Department, 2010). Currently there are five political parties that hold seats in the German Government (U.S. State Department, 2010). Each party must hold a minimum of five percent of the votes in order to gain a seat (U.S. State Department, 2010). The political parties are: Christian Democratic Union/ Christian Social Union (CDU/CSU) with 239 seats in the Bundestag; Social Democratic Party (SDP) holds 146 seats; Free Democratic Party (FDP) holds 93 seats; The Left Party holds 76 seats and Alliance 90/Greens with 68 seats in the Bundestag (U.S. State Department, 2010). In addition Germany is a major contributor to the European Union, has strong ties with the United States, has been a member of N.A.T.O. since re-unification and has friendly relations with former Soviet territories (U.S. State Department, 2010). For Food Market all of this suggests that while there may be some resistance within the German Market due to non-European nationality of the company Food Market would likely still find friendly allies because of close relationship between Germany and the United States in general (U.S. State Department, 2010).
- Demand for Food Market products is likely to build over time within the German Markets as marketing and advertising builds up knowledge within the market about the company and products. Germany’s market is already acclimatized to imported foods (CIA, 2011). There are solid target segments present with regard to age, diversity of ethnic and religious backgrounds and even a growing political segment related to the environment and civil rights (U.S. State Department, 2010). In addition Food Market Inc. is likely to benefit from good relations between the United States and Germany based on historic relations dating to the end of World War II. Germany itself is instrumental in relations between the United States and the rest of the European Union (U.S. State Department, 2010).
- Thank you Professor French for a most interesting and informative class. I enjoyed this class a great deal and while I am still undecided on what I think of Marketing, I do find it a fascinating subject. Part art and part science I can definitely agree with that description.