Marketing report on: Kellogg’s Cornflakes in Greece

Establishment and Development of marketing Relationships and networks of Kellogg’s Cornflakes in GreeceAbstract

The report has been designed in order to identify the desired focal net for Kellogg’s in the country Greece. With the major globalisation and the need for expansion Kellogg’s cannot remain content with the local existing markets of the cornflakes. This report highlights five main criteria’s which should be kept in mind while selecting a particular target segment.

The first part of the assignment highlights, the main reasons as to why the focal net is “Greece” as compared to any other country. One of the main reasons is that Greece has been referred to as a potential market & would lead to an overall increase in the levels of profit. The cost of assigning potential buyers to the target segment along with the simplicity is attached in country Greece. Amongst the segments there should be some difference in the needs of the buyers.The report clearly outlines strategies, how the firm should go about in building a position within its focal net. A strategic planning need has been developed in the first task by using the various global strategic planning tools. These tools mainly consists of the following aspect such as Economic Risk Assessments, Political Risk Assessments, Foreign Direct investment Strategy & Intellectual Property Strategy Export Strategies.

The second task highlights, different views regarding the latest thinking in case of relationship marketing. This would help to explain the strategic perspective of the enterprise. One of the aspects which has been chosen to complete the second task refers to – “in some countries it is impossible to avoid criminal networks & relationships while performing the business”.Crime is growing industry all across the world and is not at all affected by recession and the best part is that crime industry mainly thrives on the available opportunities which are provided by the multinationals coming to these countries. The three areas of moral concern existing for multinational organisations like Kellogg’s are Bribery, exploiting third world countries & influencing foreign governments. The three aspect shave been discussed in detail in the second part of the report.

TASK 1

Identify the focal net in Greece for Kellogg’s

As the strategic Planner for Kellogg’s Corn flakes it is my duty to find the focal network for the cornflakes in the international market of Greece. With the major globalisation and the need for expansion Kellogg’s cannot remain content with the local existing markets of the cornflakes. It needs to look for target segments internationally and with a manufacturing plant already established in Germany, it would be very much feasible for Kellogg’s to easily expand or plan an entry in the market of Greece.

Mainly there are five criteria which are used for selecting the target segment and they are:

• Market Size
• Expected Growth
• Competitive Position
• Cost of reaching the segment
• Compatibility with the organisations  Objectives and resources

In Greece the traditional way of preparing the breakfast for kids is to pour boiling milk over the cornmeal which creates a thick consistency which is very much liked by younger kids and that is why to tap this target market of younger children Kellogg’s thought of developing taste friendly corn flakes for Greece (Supromma, 2012)

Greece has been chosen and formed the potential target segment on the basis of following criterion:

• Potential to increase profits.
• Similarity of needs between the potential buyers and the current buyers within the same segment.
• Amongst the segments there should be some difference in the needs of the buyers.
• The marketing action should be capable of reaching the target segment.
• The cost of assigning potential buyers to the target segment along with the simplicity should be there.

In order to fid n the focal network in Greece we need to know the strategic marketing potential which should be in-depth study of Greece and the correct situation of the country should be known before the first field trip or sending the investment proposal (Parker, 2011).

The market size has been found to be huge especially the young kids and the office going men and women in Greece would prefer eating corn flakes which is a healthy option for breakfast and less time to prepare also. Moreover Kellogg’s has spent numerous years in developing cereals, so there will not be tough or rather no competition for the cornflakes in the country.

Analyse the reasons why you have selected the organisations and individuals to be in your network.

Breakfast cereals like Kellogg’s corn flakes are very famous in eth countries like Britain and Ireland, but in countries like Spain, France, Italy and Greece, still people follow eth contemporary breakfast which means a cup of hot coffee which is usually accompanied with a croissant or a cafe` au lait, that too is consumed while standing at the bar rather than sit and eat at the kitchen table (Pells, 1998).

 Moreover it has been found that a box of cereals in these countries especially Greece has been very expensive due to the cost incurred in television  advertising , cost of labour and cost of eth ingredients in Greece has been very high which is much lesser in the United States. Even after the death of communism in Latvia people used to gift box of corn flakes as gift items because of their exorbitant price in these European countries. That is why flooding the European or Greek market with novel item like Kellogg’s cornflakes is a good and profitable idea. If the taste of Kellogg’s cornflakes will conform to the taste of people in Greece it will definitely be a success in the European market (Pells, 1998).

If the corn flakes will not jibe with the original expectations of the Europe or Greece market then Kellogg’s is forever ready to alter the taste or the ingredients to make it Greek’s taste friendly.

Greece has been chosen the target country because in Europe fibre has been the focal point of the brand building strategy which Kellogg’s needed to incorporate in the Greek style of breakfasting, which doesn’t include cereals. SO it needed a change and the corn flakes manufactured by Kellogg’s can alter rather improve the nutritional value of the breakfast. But there was a challenge of maintaining the sodium intake in the corn flakes which varied from one country to another country and in Greece it was found to be 5g salt is the recommended daily intake of sodium in the diet (Sindhu, 2010).

 That is why Kellogg’s cornflakes made and introduced special products which had very low levels of sodium by the name of ‘ Nature’s Pleasure’ and along with that since 1998 Kellogg’s has an active sodium reduction plan which is trying to reduce the sodium levels in the products.

 In order to make major contribution to the social cause of healthy nutrition and fighting against obesity in Greece many food companies along with Kellogg’s are working towards combating against the obesity by collaborating with European  Commission’s Platform for Action on Diet since 2005 (Unsupported source type (Report) for source Kel09.). Thus we can say that due to these main causes Kellogg’s has been the recommended organisation and Greece has been the chosen market.

Quote actual examples to show the actual relationship in the network

In order to put the process of planning brand positioning in the market of Greece Kellogg’s started implementing the strategies, and some of the examples are quoted below:

• Food Labelling: in order to educate the consumer and to follow eth European Union’s labelling standards they introduced GDA’s in the packaging which depicted the Guideline Daily Amounts (GDA’s). These GDA’s helped the consumer to know that how amount of daily recommended diet of corn flakes is healthy for them. These clearly identifiable GDA’s have been adopted by major companies like TESCO too (Blue, 2010).
• Taking part in Physical Activity: To promote this effort the company associated with the Amateur Swimming Association (ASA) back in 1997 and framed very long term objectives to promote being healthy and physically active. The objectives of both ASA and Kellogg’s match and they both promote that families should go for swimming and it has been adopted as recreational as well as physically beneficial activity which whole family can enjoy.

Kellogg’s in order to promote physical activity became the main and official sponsor of swimming in Britain. Thus the message was loud and clear that Kellogg’s supports all the swimmers across the globe. On the other hand Kellogg’s has been seen as a brand which promotes active and healthy lifestyle amongst each and every age group worldwide (Blue, 2010).

In the meantime this helped Kellogg’s to develop a long term association with several other bodies too like the leading transport organisation Sustran also wanted to get associated with Kellogg’s and they are trying to promote different activities through which the environmental impact can be reduced through transportation like promoting cycling tracks and walking routes on traffic free paths for people. This way the healthy lifestyle as well as environmental footprints is being reduced.

• Encourage walking: Walking is a healthy exercise and Kellogg’s has been supplying free pedometers to the people who maintain their health by walking regularly.
• External Communication: the cartoon characters depicted at eth back of every cartoon pack of Kellogg’s cereal pack tells about getting the health balance right in the kids (Strategic marketing and Its Environment, n.d.). The parents get to learn healthy tips form the cartoon characters jack and Aimee (Unsupported source type (Report) for source Kel09.).

Show clear outline strategies, how the firm should go about in building a position within its focal net.

Globalisation and international expansion are the need of the hour for the Kellogg’s corn flakes branch, so as a strategic international marketing planner we need to not juts rely outdated statistics available rather we need to develop proper methodology which should be based on macroeconomic models and trade models to perfectly find and estimate the market for cornflakes in Greece (Parker, 2011). Thus a strategic planning needs to be developed using the Global Strategic Planning tools which should cover:

• Economic Risk Assessments
• Political Risk Assessments
• Foreign Direct investment Strategy
• Intellectual Property Strategy Export Strategies.

It should also involve the study of the human resource series which should involve in-depth analysis of:

• Minimum Wages
• Unionization
•  Collective Bargaining
• Child labour

The international law strategies should be framed considering the media control and censorship allowed in Greece, search and seizure and trail justice and punishment in Greece. The manager should also consider the diversity management covering several environmental drivers which will effect the global operations of Kellogg’s in Greece. These include:

• Women’s rights
• Child’s rights
• Religious forces and risks
• Racism and discrimination (Parker, 2011)

One Strategy which was being adopted by Kellogg’s to make the original American style Kellogg’s cornflakes people friendly and taste as per the people of Greece was to substitute the brown frosted raisins which are much likes by the American cereal eaters with the  golden un-sugared raisins in the Raisin Bran which was sold in Greece market (Pells, 1998).

 Another strategy which was adopted was to remove the green loops from the ‘Fruit Loops’ packets which were shipped across the Atlantic to Greece because Greeks were of the opinion that the green loops looked artificial while eating (Pells, 1998).

The main aim of Kellogg’s is to create an enjoyable, nutritious and  wholesome food for the people all across the globe and the Kellogg’s corn flakes should cater to the  range of the consumer  preferences , along with the taste they prefer in Greece and meeting the health requirements too. Few strategies which are outline son this basis for building a brand position in Greece are:

• Educate the people about benefits of increased fibre intake in the food in Greece and the nutritional value of the cornflakes.
•  In order to combat eth obesity epidemic should develop collaboration with the local NGO’s in Greece along with the local peer companies and collaborating with the retailers to create awareness about obesity.
• In order to enhance the nutritional credentials we should renovate the corn flakes.

Thus mainly the strategies developed should include low-cost, product differentiation and focusers in order to tap the Greek market for cereals (Roy, 1998).

Sketch out some future priorities for the firm in terms  of relationship development

The Future Priorities for Kellogg’s in order to promote Global Relationship development should include strategies which should cover operating costs reduction along with global expansion. Kellogg’s being the market leader in the new market development already knows what should be the priorities and in order to tap the potentials of the foreign markets in Greece (Roy, 1998).

In order to develop future strategies for being successful Kellogg’s needs to have specific aims and objectives which are required to compete in the competitive market and to develop relationship with the consumer. The most important tool which company uses out here is ‘ Branding’ which includes, a name, symbol,  design or a special feature which is associated with Kellogg’s (Bourbab and Boukili, 2007-2008). The power of brining is immense because as the consumer recognises the brand, he/she gets all the information related to that particular brand (Blue, 2010).

Then we need to do proper ‘Product positioning’ which involves management of brand by emphasising the brand value along with the qualities and attributes of the brand. The market of Europe has already been explored by Kellogg’s so being the market leaders they already have the premium position in the cereal market. The main target segments are all the people in Greece above the age group of 3 years (Blue, 2010).

 The health and lifestyle of today’s people demand a healthy and nutritious food which can be prepared in least time. So keeping in mind the health concerns the challenge was to demonstrate its consumers the Corporate and Social Responsibility (Michael and Kramer, 2006) being practiced by Kellogg’s so they formulated following activities to develop a relationship with their future and focal network in Greece:

• Renovation of Kellogg’s  in order to enhance the nutritional value of corn flakes
•  Conducting nutrition education programs
• Green marketing claims and marketing pledges have been included
•  As per EU standards the eco -labelling programs and consumer information along with health claims are being promoted
• Third party audits and sourcing the ingredients form the country of origin is being done by Kellogg’s (Unsupported source type (Report) for source Kel09.)

Along with these priorities the company should try to reduce the environmental footprints being socially aware. Along with these the company needs to develop specific business objectives to support the growth and sustenance in Greece. The objectives which needed support are:

• Supporting and encouraging physical activity among all the sections of population
•  Increase and enhance the healthy association between Kellogg’s and physical activity.
•  Using the cereal packs to deliver the message of being fit to the consumers
•  Educating the consumers about the right and balanced food using the advanced food labelling standards

TASK 2

In Some countries it is impossible to avoid criminal networks and relationships when doing business.

Considering the potential target market Greece for Kellogg’s it has been found that avoiding criminal networks and relationships while doing business in Greece is unavoidable because Greece is a major hub and an emerging ground for active international criminal activity which thrives on the extensive Mediterranean and Aegean coastlines and several islands in Greece. The geographical location of Greece which is situated and shares the overland borders with the Balkan states and the flourishing banking sector in the country makes it the most favourable ground for international crime and active criminal networks too (International Crime Threat Asssesment: Chapter III, n.d.).

 Greece is situated just at eth spur of the two major and traditional Balkan routed which are famous for drug trafficking across the globe. The Balkan crime moguls along with the ethnic crime groups of Albania including the African, Western and Central European and former Soviet Union crime networks all use Greek territories for smuggling arms, cigarettes, drugs and illegal immigrants to the Western European countries. Thus Greece acts as channel or vital connection which is used for illegally trafficking of drugs from Balkan countries to Europe which involve human trafficking too.

The thriving illegal cigarette trade in Greece is being controlled by Italian Criminal Organisations as published in various press reports. There earning just from cigarette smuggling only is $500 million every year. The Russian Criminal Groups and networks which are involved in serious crimes like extortion, money laundering and trafficking of women supply for sex industry is quite prominent in  Greece and the Law enforcement officials of Greece are very much troubled and worried about these illegal Russian groups (International Crime Threat Asssesment: Chapter III, n.d.).

The annual earning of the international crime syndicates in Greece itself as per the Greek police officials through their criminal operations is $11.5 billion that is why it is very tough to curb them also. Moreover the law enforcement related to money laundering are very weak in Greece which promotes the illegal money laundering in Greece a lot and attracts several international criminal groups as they can easily operate and do money laundering because of stringent laws and the main benefit is being taken especially by the Russian organised crime groups thriving in the soils of Greece (International Crime Threat Asssesment: Chapter III, n.d.).

It is a challenge for any business to balance one’s profit interests and to meet the requirements of the consumers, governments and employees at the same time. Moreover the challenge of following the moral perspectives on the U.S. as well as the host countries for the multinational firms like Kellogg’s is much tougher. Mainly there are three areas of moral concern existing for multinational organisations like Kellogg’s and they are listed below:

• Bribery: Bribery is found to be much more frequent in third world Nations; however it exists in United States too but is severely punishable crime out here. The central notion which exists in case of bribe is an agreement and the person who is implicitly bribed has to move and abide by the rules of the government or the legal system or the organisation. On the other hand extortion has a victim while bribery does not have a victim. In this capitalistic and highly competitive environment the multinational forms in order to be globally present and successful need to have an even playing field in order to be competitive enough with the other foreign businesses. The corrupt government officials have to be considered practically to do business in some countries and you need to pay them bribe to enter those target countries (Fieser, n.d.).
• Influencing Foreign Governments: In order to expand wings on foreign turf the organisations need to endorse, oppose and influence foreign governments because in every country they plan to enter they will have to develop close relationship with the government. The aim of the businesses to get access to the resources , lobbying for fewer regulations, lower taxes and government subsidies can be achieved only by developing closer relationship with the government an the officials of that particular country. Thus any US company when plans to set up their organisation in any country they implicitly support the unpleasant norms set by the government which is against the social norms (Fieser, n.d.).
• Exploiting Third World Countries: The Third world countries or eth countries which are still developing already blame US multinationals of exploiting the resources as well as the labour forces of their nation. Just like in case of corn flakes the company is blamed of exploiting the best agricultural land to grow corns for manufacturing corn flakes and using eth labour at much cheaper rates than what they pay to their labourers in US. Then it is criticised that they follow double standards for labour values and lead to the destruction of the local culture as they try to introduce American culture (Fieser, n.d.).

The wide range of ethical questions is being raised due to the above listed problems which are related to business ethics due to the problem of business interference in foreign governments, bribery as well as exploitation of the resources and land and; labour. Thus eth multinationals need to adopt the attitude of: When in Rome, do as Romans and when in Greece act as Greeks”. The major issue which ahs been highlighted out here is of cultural relativism which says that do the moral values keep on changing form one society to the other.

Cultural Relativism

Cultural contexts are the real term which define the moral values in any country and there cannot be a universal standard which can be implied in case of morality which can be straightaway applied to people all across the globe and at all the times. That is why the multinational s like Kellogg’s have to face severe and grave problems because till the time they are within the norms of their society they are in proper and well managed cultural environment, but as they step out in the moral context of other culture they start facing problems (Fieser, n.d.).

So if we follow that there exist some common grounds on the basis of moral grounds all across the globe, then the multinationals do have certain moral responsibilities which they need to follow when they cross the cultural boundaries. That is why the famous philosopher Norman Bowie has recommended three moral standards which are universally applicable:

•  The multinationals need to follow the marl minimum norms which are applicable in most of the societies.
•  The moral norms of every market place that is honesty and trust should be followed by multinationals.
•  The basic liberty rights should be practices by the multinationals without violating the basic liberty rights (Fieser, n.d.).

Crime is growing industry all across the world and is not at all affected by recession and the best part is that crime industry mainly thrives on the available opportunities which are provided by the multinationals coming to these countries (Evans, 1994). Internationally the criminal industry has found growing opportunities to earn profit and to gain power that is why it is not uncommon to find reports of crimes which are committed by the nationals of various countries committing several offences under several jurisdictions. The range if international crimes is no more just restricted to drug smuggling but there is a very broad range which ranges from money laundering to international frauds, selling fake pharmaceuticals in developing countries , counterfeiting,  arms smuggling, flourishing sex trade which involves  entrapping small children and women for this purpose (Evans, 1994).

After analysing the spreading and flourishing nature of organised crime all across the globe and the international dimensions of the crime there are few areas of research which have been suggested  to make useful contribution to put a bit control on the growth of crime scenario internationally:

Money laundering:  if the criminal profits are being reduced then we can easily reduce crime, thus by formulating effective legislations which should allow the seizure and forfeiture of the proceedings we can easily control and curb crime.

Corruption:  The corrupt public as well as the private officials are eth ones which promote the organised crime , so in order to reduce corruption we need to bring together the  several special systems which exist in order to combine the legal traditions  and the societal norms and traditions existing to reduce the corruption.

Exploitation of Women and Children:  The several stories published by press related to captivated sex trade which is flourishing across the international borders by trafficking children and women are a serious problem which needs immediate attention. IN wide range of crime the commission needs to give sporadic attention and in the same way the labour practices which exploit women and children so that they are not exposed to unsafe conditions and inhuman environment should also be considered. The international centre has started working towards this seriously by compiling database of literature available on this matter and holding important meetings officials to find a solution to this problem of victimization of children and women due to the thriving organised crime.

Migration and Organised crime:

 The international nature of crime flourishes much more due to the feature of movement of people across the globe the legitimate refugees and migrants act as the cover for the movement of organised criminals across the globe, thus promoting the illegal smuggling of immigrants which adds to the growing population of organised criminals in any country. The Department of immigration and Law need to act and formulate stringent actions along with the law enforcement directorate.

Evaluations: Operations focussed on organised crime along with examining the the effectiveness of the policies needs to be studied. The political scenario does not support the re-examination of the drug policies but there are signs that these policies are changing and showing some positive signs.

The current drug policies support organised crime as they provide continuous subsidy and offer extraordinary incentives to the criminal networks operating in the country, so they need to be worked upon.

Technology and Crime: In order to improve the effective control over the crime and to prevent it thigh proper investigation and prosecution of criminal networks we need to use technology very effectually. Through technological advances only it would be possible to identify the emerging criminal opportunities and finding eth business practices being developed like new financial instruments being developed by organisations to thwart the advances being made in order to detect the money laundering cases (Evans, 1994).

Training: the current law enforcement does not use the latest state-of-the art technology to investigate and detect the cases of money laundering or any other sophisticated crimes which are flourishing, so they need to be trained in order to combat such criminal networks.

It has been studied that organised crimes and criminal networks are thriving due to piracy activities and counterfeiting activities. The substandard item which are being produced by counterfeiters and through piracy are sometimes very dangerous to the lives of the people who buy and use them. Moreover these kind of illegitimate activities also steal the market share from the legitimate business operations and along with this they undermine the innovations which the organisations might do in the industry. Thus resulting and causing negative effects on the economic growth of the country. When this piracy and counterfeiting gets associated with bribery also it weakens the effectual manner in which public institutions can work thus causing great harm to the society. At the same time the government is also affected due to these criminal networks and counterfeiting and piracy problems as they have to forgo huge amount of tax revenues and the costs are also incurred when the organisation or the country has to combat such problems. The public institutions are also becoming weaker when the criminal networks start using the activities like corruption and bribery in order to facilitate their activities and to grow their criminal activities (THE ECONOMIC IMPACT OF COUNTERFEITING AND PIRACY, 2007).

Thus it is found that enterprise crime along with the criminal networks are thriving in the international ambience too which are hampering and causing both social and economic disadvantages to various states or countries. For combating these criminal networks we need more effective international and national efforts which are right now hampered due to knowledge gap which exists in various areas.

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