I. What are some things to consider when entering a new market?
Kellogg Cereal Company needs to clearly define its marketing objectives. In moving into a new country, knowing their target group takes on a new meaning. A part of knowing their target includes but is not limited to knowing that country’s: language, economy, monetary structure, political structure and status, culture (business, social and historical), import/trade/business policies, regulations and laws (especially as they pertain to foreign owned businesses). If the Kellogg’s Company decides to establish facilities in the target country, they will want to consider where it will manufacture their products and what it will take to establish those facilities in the country or countries they choose. If they are not going to establish in the target country, they have to consider if they are going to export (directly or indirect), licensing, joint ventures and direct investment (Kotler and Keller p. 603). With exporting Kellogg’s may considering engaging an export management company which will be one of their biggest costs if they go this route (Kotler and Keller p. 603).
They will want to decide if they are going to move into just one country or multiple and how they will go about doing this. Will they do it all at once, staggered or gradually? Business expansion has to be very well thought out, however, when you are moving into another country it has to be very well planned and strategized. They should consider making certain that they know what type of competition they face in those companies and develop a very strong and aggressive marketing and public relations campaign in those countries. Competition may be a bit more radical than expected, especially in developing countries. Kellogg’s has to decide if they are moving into developing or already developed markets. They must determine which will best serve their brand. The company has to be prepared to do business differently in order to adapt to the country’s socio-economic and cultural differences. They may find themselves in markets that they do not target in their current markets.
Determining channels of distribution is also very important. In developing countries there may be obstacles to overcome that they company might not encounter in the USA. In already developed countries, distribution may involve government owned/run channels or dealing with privateers or brokers. Lastly, do they have to make innovations to their existing products or do they have to create new cereals or will their existing products serve the new global markets without innovations/adaptations?
II. What are some recommendations as to how Kellogg’s in particular should enter the market and what strategies should be considered so that the cereal products are effectively introduced upon entry into the market?
I recommend that Kellogg’s create a team of people native to each country in which they desire to expand to represent their interests and serve as operations and sales in the chosen country. A team from the USA should relocate to that country and partner with this team as they will want to create a seamless relationship with that country’s government and business and manufacturing community and solid communication flow. These individuals will assure that all legal, political, cultural and business activities and challenges are appropriately addressed. For this reason, moving into more than one country is not recommended initially. A planned strategic move into a specific region may work best.
The marketing team should be a mix of persons native…