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Germany International Marketing Plan
Transcript of Germany International Marketing Plan
80.06 Sq miles (207.4Km)
613,392 Stuttgart / Germany total: 81,147,265
Stuttgart is home to seven different universities,Stuttgart Airport and a major railway station. The city is very urbanized with lots of diversity.
Germany is known for Beer, Technology and sweets.
But despite these norms, Over 60% of the population misses breakfast each year.
Kellogg's is bringing delicious Pop-Tarts to Germany starting with the major city of Stuttgart.
• As detailed in the above illustration, Germany’s population follows a similar pattern to our own.
• The age distribution is relatively static except for the boom around the 45 – 54 age range, our “baby boomer” generation.
• Since the birth of the citizens within that range, the number of births has gradually tapered into the 1.6 million range.
• As far as sex distribution of the population there is not a substantial difference in the number of males or females until we reach the higher age brackets.
• The majority of citizens 80 years of age are females.
Germany International Marketing Plan
The average household size in Germany has been declining for years in 200 only 2.2 persons per household and two-thirds of all homes in Germany are one generation
17% of families with children are lone parent families and a further 8% consist of unmarried couples.
Parents want their children to be involved with as many activities such as Sports, dance, parks and playgrounds. Hopping from one activity to another is very common for children
1. Primary education: education lies primarily with the states, while the federal government2.
2.Secondary education: there are five different styles of secondary education
3.Higher education: roughly 1.98 million students are studying at German universities or German higher institutions
4.Literacy rate: males 99% females 99% at age 15 and over
0-14 years: 13.1% (male 5,435,658/female 5,155,065)
15-24 years: 10.8% (male 4,457,412/female 4,267,366)
25-54 years: 42% (male 17,268,604/female 16,786,146)
55-64 years: 13.3% (male 5,354,690/female 5,469,884)
65 years and over: 20.9% (male 7,360,711/female 9,591,729) (2013 est.)
Dependency ratios total dependency ratio: 52 %
youth dependency ratio: 19.9 %
elderly dependency ratio: 32.1 %
potential support ratio: 3.1 (2013)
Median age total: 45.7 years
male: 44.7 years
female: 46.8 years (2013 est.)
Federal Republic based in Berlin
The country has five major political parties
Christianity is the largest religion in Germany with roughly 50 million.
Islam accounts for 4million and followed by Buddhism and Judaism.
School System in Germany
Experiencing many changes due to the longer school hours, looking for more meal options.
This is where Pop-tart comes in
Before: vending machines and school kiosks were the dominant form for on-grounds school food availability.
Now: With the expansion of the all-day-school model since 2003, the situation is changing and more and more professional caterers are involved in school meal provision.
Currently the schools and regional authorities are responsible for their individual concepts for school food and its provision.
Leisure Time in Germany
The weekend, a latecomer in Germany, has become firmly established.
Private recreation typically includes spectator amusements and sports (especially football), active sports and physical exercise, automobile excursions, the pursuit of hobbies, visits with friends and family, and the long-favored German pastime of walking or hiking.
Benefit of Pop tarts in this is "the ability to go where you go"
Economic Statistics and Activities
• Similarly to the US there is a large gap between the lowest income class and the highest earning households which is consistently getting wider and wider.
• The annual income within the separate earning echelons is becoming more distorted as the years go on.
• The top earning 20% of the population make nearly four times as much as the lowest earning 20% (OECD).
The American and German business relationship is one of the strongest in the world.
This is, in part, thanks to the Transatlantic Economic Council (TEC) which is sat on by the countries of the European Union and the United States.
The TEC promotes trade and job creation between the US and the EU. The two world leaders who helped the creation of the TEC most of all were George W. Bush, President of the United States, and Angela Merkel, Chancellor of Germany (Transatlantic Economic Council).
This council allows for businesses from the US to make great leaps of progress within the EU and vice versa.
Due to the leadership role Germany holds in machinery and technology there is no room to invest in these already booming industries.
Where one could find opportunity is within the software, foodstuffs, or natural resources which are yet to expand domestically in Germany.
US Trade Relationship
Channels of Distribution
There are over 3.63 million retail brands in Germany these chains have numbers of stores ranging from 80,000 to below 500 stores (Retail Index).
Classically Germans prefer to shop in local shops, viewing large or global companies as bullies in the market.
Within the last year there has been a large push toward retail in Germany. 35% of their domestic retailers plan on expanding their chains by 40 or more new stores in the next 12 months.
Of US chains, 47% plan to expand at the same rate (Gold, 2014).
Market Audit and Competitive Analysis
We will sell four different flavors in Stuttgart, Germany including strawberry, brown sugar, blueberry, and mixed berry.
Poptarts are not sold in Europe. Because of this fact, there is a demand for them.
Kellogg’s has a warehouse in northern Germany; however, Poptarts are not common there.
This is a great advantage for our company because of the demand.
Stuttgart has a military base, an international airport, and an interconnected train system.
We will sell our product in grocery stores around Stuttgart to begin with.
Poptarts will also be sold in the international airport
Our advertising plan will begin with social media.
In addition to social media, we will start print campaigns
In Europe because Poptarts are not as common, we can raise the price to roughly $4.50 or €3.28
Competitors in Germany would be local pastry shops.
The selling point of a Poptart is a quick and easy breakfast but there are a lot of pastry shops in German towns that are known for their breakfasts.
A second competitor would be bread companies.
Bread is a staple of breakfast in Germany (Eating).
Bakeries are all over Germany, around every corner.
They have very little advertising because they are small town bakeries.
Our primary target market will be between the ages of 7 and 25.
We want to target students that need a fast breakfast.
Our secondary market will be working parents.
We will target them because of their busy schedules and lives.
With work, children, taking care of the home, and social lives, working parents need a quick meal in the morning that tastes just as good as their traditional pastries at a fraction of the cost
• Kellogg’s already has a warehouse in Germany.
• Poptarts are already a well-known brand in Europe, even though they are not sold there.
• Another clear strength is the fact that Kellogg is already a very successful company.
• Poptarts are high in sugar and therefore not the healthiest option.
• German citizens favor foreign products over domestic ones.
• German citizens are loyal to their local bakeries.
• Competition is very relevant in this area.
Preliminary Marketing Plan
• Our main objective through advertising is to get our name out there in a positive light.
Social media is our main method of advertising.
Facebook, Instagram, Twitter, and the Kellogg Website are the four main ways of doing this.
Through each method, we will offer monthly promotions and deals.
This will encourage our customers to connect with us and hopefully their friends also
Distribution from Origin to Destination
• Seeing that our company Kellogg’s already has a manufacturing plant in Bremen Germany, we will be utilizing two modes of transportation, Railroads and motor transportation.
• Kellogg’s main distribution channels are already managed by a logistics company Norbert Dentressangle.
• They recently took over the management of Kellogg’s automated high bay warehouse and co-pack operation in Bremen.
• They also handle distribution to Kellogg’s retail and wholesale customers throughout Germany.
Kellogg's Bremen Factory
Labeling and food packaging requirements
The following information applies to the act: Regulation (EU) No. 1169/2011
The nature of the labelling, the presentation of the foodstuff, and the publicity for it must not:
• Mislead the consumer as to the
characteristics, the properties or the effects of the foodstuff;
• Attribute to any food the property of preventing, treating or curing a human disease
• Information on foodstuffs must be precise, clear and easy to understand by the consumer.
Summary of information
The regulations that are listed are very similar to US regulations and should not provide any additional cost to the packaging
Channels of Distribution
We will exploit Kellogg’s existing distribution retailers but first we are going to employ market sampling through Germany’s largest Grocer Edeka
Represented in the graph below is Edeka’s current market share in Germany.
Our sampling market in Stuttgart has 12 Edeka grocery stores within the city
After sampling the market within Stuttgart, we will further expand to other retailers and Kellogg’s existing distribution sources.
As for the markups, it will cost us 35 cents to produce one pop tart, so a total of $1.05 per box. The mark up on this production cost will be determined in a formal contract with the retailer.
Our warehousing facility is operated by Norbert Dentressangle in Dorsten, Germany. This warehousing facility is in direct route to Stuttgart.
The picture below represents our route from the manufacturing facility to the warehouse to Stuttgart.
Terms of Sale
The terms of sale we have chosen to use will be free alongside ship.
There are different responsibilities of the buyer and seller during this process.
The term “free” in this aspect means, “That the seller is responsible for arranging and paying for delivering the goods to a carrier. The buyer pays for the main carriage onward from that point”
Methods of Payment
As we do business with the companies in Germany we will have them give us cash in advance as their method of payment.
A lot of the time this method is used in international markets because of the uncertainty of getting paid; however, we believe that if a company invests their money into our products they will be more motivated to sell
According to the International Trade Administration the right time to use cash-in-advance terms are:
• “The importer is a new customer and/or has a less-established operating history.
• The importer’s creditworthiness is doubtful, unsatisfactory, or unverifiable.
• The political and commercial risks of the importer’s home country are very high.
• The exporter’s product is unique, not available elsewhere, or in heavy demand.
• The exporter operates an Internet-based business where the use of convenient payment methods is a must to remain competitive.
We have noted earlier that we are not doing shipping internationally, but we are an “American” company doing business in Germany. Germany is a new market we are breaking into and they have a less-established operating history
Pro Forma Financial Statements and Budgets
According to CEO David Mackay, “The company’s ad spending has increased 30% in the last fivers, or by $250 million” (York, 2008)
Since Germany has strict regulations on television advertisements we are not focusing our advertising and promotions at that source.
For one year of our marketing budget we plan to allocate $2 million since we will be focused on Stuttgart
We budgeted about $200,000 for our initial advertising and promotion expense budget.
We plan to ship the Pop Tarts by train from the factory in Bremen to Stuttgart and it came to be about $0.40 per Pop Tart.
It will cost roughly about $0.35 per Pop Tart to make once we factor in the ingredients and the costs to run the machines.
Pro Forma Annual Profit and Loss Statement
As a company we plan to see a return on investment within two years. Within the two years our first six months will be focusing on how to properly target and sell to Germans in Stuttgart.
Within the two years our first six months will be focusing on how to properly target and sell to Germans in Stuttgart.
We plan on the this being successful and partnering with a larger grocery retail store that has locations throughout Germany and making sure that Pop Tarts are available at all those store locations.