Global Marketing and Sales Management Assignment

Abstract

The overall context has specified about the Kraft Heinz international (business) marketing strategies in two culturally different countries; United Arab Emirate and the United Kingdom. The first part is about the introduction in which the overall structure of the task has been discussed with a brief illustration about the role of international marketing strategies in improving the business performance. The second part is about Kraft Heinz’s international image and the product category section. The third part is based on the overview of its marketing environment that has been identified with the help of PESTLE analysis. However, the fourth part is about the global marketing practices in which the detailed analysis of the digital marketing strategy has been demonstrated along with the entry strategy and STP theory. In the fifth part, the marketing mix for Kraft Heinz has also been discussed in key detail. The last part is about conclusion in which some of the recommendations have been put forward.

Introduction

The overall context would critically explore the international marketing strategies of Kraft Heinz in two different countries of the United Arab Emirates and the United Kingdom. Based on the universal term, international marketing is defined as the techniques and methods which are used to market the products and services in the different international countries across the globe. The tactics and methods can be in the form of export/import, licensing, franchising as well as online sales. Throughout the context, a brief overview of the international image of Kraft Heinz, marketing environment, and global marketing practices of Kraft Heinz would be considered concerning the market environment of the United Arab Emirates and the United Kingdom (Kozlenkova et al., 2021, p.1453). Apart from that, the key marketing mix concerning product, price, place, and promotion for the products and services of Kraft Heinz would also be broadly illustrated. The concept of international marketing strategies has been extremely important to cover within the overall context as in this fast-paced business world, it has become extremely important for brands such as Kraft Heinz to increase their focus with the help of a strong marketing message to the targeted customers across the globe.

Kraft Heinz’s International outlook image and profile and the product/category

Kraft Heinz is broadly known across the globe as a global trusted manufacturer and seller of delicious foods to customers. The company has been well popular in delivering the best and high quality of delicious foods such as tomato ketchup and nutrition to eat across all the occasions mainly in home, restaurants, parties or any other special occasions. In 2021, the company of Kraft Heinz successfully acquired revenues of $7,3 billion through its global net sales which have made the company the largest sausage product category in the entire food and beverages industry (Samiee and Chirapanda, 2019, p.26). Kraft Heinz is an internationally recognized brand which is headquartered in Pittsburgh, the United States which was further established in 1869. As of today’s date, Kraft Heinz manufactures thousands of products across the six continents and also, it markets these products in more than 180 countries throughout the globe. In other words, a company of Kraft Heinz has its global presence in 56 different office locations in Asia, Europe, South America, Africa, and Oceania across 25 different countries. However, the major competitors of Kraft Heinz are Campbell Soup, TreeHouse Foods, and Nestle. Speaking about the products, the company make baking, desserts, cream cheese, mac and meat along with salad dressings (Paul and Mas, 2020, p.693). Its annual turnover was $26 billion in 2021 with an operating income of $3 billion in 2021. Based on the financial perspective, the profit margin was 3.4% compared to 1.5% in 2018. Also, the return on assets and return on equity have been 5.9% and 3.8% which means that the company has more assets to liquidate than the liabilities (Samiee and Chirapanda, 2019, p.19). The core competencies of Kraft Heinz are based on the business principles which are to be more customer-obsessed, challenge innovation strategies, and demand diversity in its product portfolio.

Marketing environment of United Arab Emirates

The marketing environment of UAE can be better understood with the help of PESTLE analysis which would be discussed below in key detail:

1. Political environment: There is high political stability in the UAE and the tax rates have also not changed as much over the years which makes it an attractive market for Kraft Heinz to target in the long term (Paul and Mas, 2020, p.631). It is one of the crucial business environments which the business of Kraft Keinz need to consider to sustain its profitability in the international market.
2. Social environment: The people like to hold social gatherings in different social venues with drawing attention towards Emirati cuisines mainly meat, fish, and mutton foods (Gnizy, 2019, p.220). Based on the social preferences, it has been difficult for Kraft Heinz to target the customers as the country holds different food preferences compared to the foods offered by the company.
3. Economic environment: The UAE has a high infrastructural economy which has a high per capita income with the gross domestic product crossing over $513 as of 2021 (Hult et al., 2018, p.11). Based on the economic preferences, Kraft Heinz effectively targets the customers of the UAE as it has a stable and growth-oriented economy.
4. Technological environment: The country of UAE has heavily invested in information technology (IT) infrastructure that can contribute to rapid development in science and technology (Knight, Czinkota, and Khan, 2018, p.599). Based on the established IT network, Kraft Heinz has established its business presence in the country.
5. Legal environment: UAE adopts the legal system in duality or its civil and sharia laws and it has strict laws concerning strict punishment for financial misconduct in the financial department (Paul and Mas, 2020, p.849). These made Kraft Heinz to converge in carrying out the business activities and must carefully concern the federal laws on commercial companies.
6. Environmental factors: The huge exploitation of barren land, enhanced population growth, and increasing energy demand led to the hot and dry climates in places like Dubai, UAE (Agnihotri and Bhattacharya, 2021, p.673). This can make Kraft Heinz difficult to carry out the business operations and fulfill the logistics criteria.

Marketing environment of United Kingdom

The marketing environment of the UK can be better understood with the help of PESTLE analysis which would be discussed below in key detail:

1. Political environment: The political stability in the UK is not very stable as different political parties are operating across the country. Also, the tax policies are changed during the different tenure of the country (Whitler, 2021, p.11). This makes Kraft Heinz competent to function in the country of the UK governing the labor laws and other trade restrictions.
2. Economic environment: The economy of the UK is growing as the projected output is expected to reach 6.8% in 2021, with the growth moderating by 5% in 2022 (Yang and Gabrielsson, 2018, p.27). There is a huge scope for Kraft Heinz to expand its business presence more than the current position.
3. Social environment: The social preferences of British people are more towards full breakfast, chips, and fish (Nguyen et al., 2020, p.332). Also, it includes the bangers, mash, and Sunday roast, and based on that, Kraft Heinz targets the customers in the best way possible.
4. Technological environment: The IT industry in the UK is expanding by 2,5 times more than is expected and based on the reports of McKinsey, the digital technology industry can boost up to $170 billion in 2016 (Whitler, 2021, p.14). This made Kraft Heinz establish its presence in the different cities of the UK.
5. Legal environment: The business of Kraft Heinz has to look forward to the different types of legislation that involve employment laws, intellectual property laws as well as consumer laws (Finotto and Mauracher, 2020, p.394). In other words, the UK has a regulatory-free government which is good for Kraft Heinz’s long-term profitability and scalability.
6. Environmental factors: Due to climate change and exploitation of land, air pollution, and soil contamination are the crucial factors that have affected the revenues stream for Kraft Heinz over the years.

Global Marketing Practices of Kraft Heinz into the United Arab Emirates and United Kingdom

Global marketing practices of Kraft Heinz in the UAE

Stating about the global marketing practices of Kraft Heinz in the UAE, Heinz follows a competitive pricing strategy. The pricing decisions are mainly considered to adjust well into the economic conditions as well as to observe the consumer habits. To fuel the profitability and scalability, the brand potentially focuses on identical packaging through which the customers in UAE can get the best value out of it. In addition to this, the standardized advertising messages are marketed through newsletters and mailing lists to the people living in the UAE. The company Kraft Heinz uses the existing customer base to market the product portfolio to its targeted costumes in the country (Hult et al., 2018, p.15). In addition to this, the use of blogs and social networking sites such as Facebook has been broadly targeted as the communication tool through which the company can target the customers within the period. Also, online advertising such as the significant use of banners, pay-per-click, classified ads as well as search engine ads is part of the digital marketing area. In the UAE, internet marketing has been very useful as around 56% of the users have their websites and blogs which are further used to advertise through its product and services. Search engine optimization (SEO) on the other hand, has been a useful marketing strategy for Kraft Heinz as the search engines are websites to help find the various websites which are most relevant to the search item referred by the users. These are the promotional strategies that have extensively worked in the digital landscape in UAE (Jian et al., 2021, p.42). These marketing practices have been broadly useful for Kraft Heinz as the country holds a young population and also, it has one of the highest rates of internet penetration in the region. However, the basic tenets of the Kraft Heinz strategy are to restructure the products into customer-oriented platforms by modernizing and optimizing the process involved in the supply chain procedure (Tiganas, Boghean and Vázquez, 2019, p.278). With the global influence of its global marketing practices in countries such as the UAE and UK, the company aimed to be in the position of leadership by executing the marketing strategy in the best possible way. This is done through the wide use of digital media by investing in premium ad units over 250 different media properties to target the people in countries like UAE. By following the competitive pricing strategy, the pricing decisions are further adjusted to the economic conditions of UAE along with observing the customer habits in the long term (Watson et al., 2018, p.46). For instance, Kraft Heinz continues to perform better with its sales of tomato ketchup in the UAE region through extensive use of email marketing, social media, and influencer marketing campaigns. Along with this, PPC has boosted the web traffic for Kraft Heinz based on the customer demographics across the different regions of the UK. It made the business control and lower the advertising costs. However, PPC has also analyzed the ad performance in real-time and increased brand recognition over the years.

Global marketing practices of Kraft Heinz in the UK

To make an impact on the global marketing practices in the UK, Kraft Heinz has switched the slogans to ‘Beans means more’ as a part of the marketing campaign which can drive the customer focus and can influence the customer buying behavior to a huge extent. The main purpose behind the recreation of the product campaign is to show the customers that the kitchen cupboard staple is mostly used to remain relevant to the current food trends. Throughout the year 2021, the company of Kraft Heinz spent $100 million in the development and reconfiguration of its digital ads, and thereby, the role of content marketing has been brought up in the light by the brand (Lo and Campos, 2018, p.17). To be specific, the pay per click (PPC) has boosted the conversion rate of Kraft Heinz by 38% and it has been made possible by using the right content marketing strategy.

Speaking in detail, the company of Kraft Heinz has used the right set of keywords and quality of web pages through which the user experience (UX) and user interface (UI) have been improved. This made the web pages gain more clarity for the day-to-day visitors of the web pages and thereby, to rank higher in the search engines of Google, Yahoo, and Bing. It can be visualized as Kraft Heinz now was focused more on Velveeta with 12.5 % out of the total revenue being spent in 2021. The content marketing strategy for the targeted customers in the UK is further facilitated by working significantly with playful typography, bold colors, and a fascinating sense of humor that makes the content look precious to the targeted customers (Sinha and Sheth, 2018, p.223). Speaking about its experimentation with the new ad formats, the company has rolled out a series of ads, and thereby, Oscar Mayer, one of the chief executives has injected 57% of the financial budgets to Twitter and Instagram. It is because the majority of its targeted customer base uses Instagram and Facebook to involve more customers in its loyal customer ecosystem.

Apart from that, search engine optimization has also helped the business of Kraft Heinz to promote the business products and services to the best possible extent through content indexing, keyword targeting, and good link structure. The context indexing allowed the business to improve the quality of the video and audio content by adding the alt text for the transcripts and text images. The good link structure further helped the business to crawl the site structure to find the content based on the company’s website. Also, through the use of pay-per-click (PPC) campaigns, Kraft Heinz was more able to measure and track customer conversion through the marketing channels and targeting options (Sheth, 2020, p.8). Along with this, PPC has boosted the web traffic for Kraft Heinz based on the customer demographics across the different regions of the UK. It made the business control and lower the advertising costs. However, PPC has also analyzed the ad performance in real-time and increased brand recognition over the years.

Apart from the emergence of social media campaigns, email marketing has increased the revenues for the company of Kraft Heinz in the UK by 61% compared to 43% by the use of traditional marketing campaigns. The company has used Mailchimp as its email marketing tool and through this, the company has been able to focus more on healthy contact management practices through powerful data analytics and well-designed marketing campaigns (Warner, 2020, p.1). The use of effective email marketing campaigns in the form of sending regular newsletters emails and attractive copywriting pieces has built credibility through the relationships among the business stakeholders such as the internal and external stakeholders. The social media campaigns further improved the revenue and customer conversions by turning the people into customers with valuable information to achieve the organizational goals.

Entry strategy

The international entry strategy for the FMCG Company of Kraft Heinz is based on 3 parameters which are the opportunity, challenge as well as involvement in the international expansion process. Speaking about the opportunity first, Kraft Heinz is looking for new opportunities to grow and establish its business presence across all the countries over the world. The core ambition of the business is to launch new product categories based on customer taste and preferences in the international market (Kowalik, 2020, p.673). The product launches of new meat products have made successful launches in the different regions of the UK and to get the leverage for the global product range to establish a presence in the country with other categories. Speaking about the entry strategy in detail, exporting is one of the strategies that has been used that involve marketing the products that the company produces in the United States. Countertrade is another export strategy in which the company traded the goods instead of offering the goods for purchase (Nguyen et al., 2020, p.334). Through licensing, the company has also established its business presence across the countries such as France, Argentina, and Singapore.

Segmentation, targeting, and positioning (STP)

Segmentation, targeting, and positioning (STP) is a tool that is used as a strategic approach in the marketing world. The detailed analysis of segmentation, targeting, and positioning (STP) for Kraft Heinz is as follows:

1. Segmentation: The company has segmented the targeted customers concerning geographic segmentation based on the country, region, product density as well as the command of the current market. For Kraft Heinz, the UK market has been the dominating market for its overall growth of sales. After Berkshire Hathaway acquired the company, the influence of its products grew faster in the UAE markets (Sheth, 2020, p.5). Based on the demographic segmentation, the products have been divided based on the customer’s age, gender, and taste preferences. However, the main target customers are between the ages of 21 to 45 years old.
2. Targeting: The company of Kraft Heinz targets customers with the help of different digital marketing tools such as email marketing, content marketing, influencer marketing, search engine marketing as well as search engine optimization (SEO). The use of these strategies helped the business to gain new customer insights and to increase the return on investment (ROI) for the customers based in the UAE and UK markets (Hanus, 2018, p.89). However, the business has also been able to build stronger communities across the globe with the help of content marketing and mobile marketing with the help of its talented manpower to target global customers.
3. Positioning: The company has used different positioning strategies over time such as characteristics-based positioning, application-based positioning, and quality-based positioning strategies. Speaking about these qualities in detail, Kraft Heinz has provided the characteristics of the best quality and affordable price to ist innovative products which can create associations (Choe, Kim, and Hwang, 2021, p.25). With the help of application-based positioning, companies have positioned themselves by associating with the use of application making the people aware of the nutritional facts about each of the products. Also, through quality-based positioning, the brand has made the targeted customers clear through its promotional campaigns that it is the prestige that makes the products useful to the targeted consumers.

Marketing mix decisions for the United Arab Emirates and the United Kingdom

Product

The product strategy for Kraft Heinz in both the UK and UAE are much more diversified which comprises different products such as meats, dairy and cheese products, deli meat, bacon, hot dogs, dressings, sauces, and condiments. Also, it includes different kinds of snacks, Cuban, Tassimo, crystal lights, and other baking goods and desserts. The company of Kraft Heinz sells its products and services to more than 200 countries in which the product portfolio involves $1 billion in the category of its retail sales (Taghian et al., 2021, p.31). Speaking about each of the products in detail, the sauces and condiments make up to 26% of the overall sales that are made by the company. The cheese and dairy products are the second-largest product category amounting to 20% of its net sales generated within each year. Frozen and chilled foods further account for 15% of the total net sales recorded in 2021 (Choe, Kim, and Hwang, 2021, p.18). Also, the company sells ist licensed products from third-party providers.

Price

The product pricing of Kraft Heinz in both the UK and UAE is mainly based on the high impact of sales and customer loyalty. Kraft Heinz has employed a competitive pricing strategy which has significantly boosted customer loyalty and generation of high revenues to a considerable extent. The company is best known for employing the zero-based budgeting strategy which leads to aggressive cost-cutting and the laying off of the business areas which are not performing well (Kukartsev et al., 2019, p.593). This has further reduced the expenses and maximization of the profit margins to a great extent. Apart from that, the company is known to maintain strong and ethical relationships with its global suppliers through which the supply of raw materials and reduction of costs can be initiated in the best possible manner. Thereby, the benefits are drawn by the global customers in the form of competitive prices.

Place

Kraft Heinz operates in multiple countries and continents across the globe in which its leading markets are based out of the United States and Chicago. Its growing presence in countries such as UAE and UK has allowed the company to generate revenues by more than 29% using the diverse mix of distribution channels and sales to facilitate the offline and online modes of channels. The company is well known to utilize a diverse mix of sales and distribution channels such as independent brokers, grocery stores along retail chains involving government agencies (Samiee and Chirapanda, 2019, p.31). Amid the outbreak of the Covid-19 pandemic, the company is now selling the products and services through its e-commerce platforms in the different cities of the UK and UAE. The company has been able to establish its strong distribution network through the effective use of information and communications technology (ICT).

Promotion

Search engine optimization (SEO) has been a useful promotional strategy for Kraft Heinz as the search engines are websites to help find the various websites which are most relevant to the search item referred by the users. Throughout the year 2021, the company of Kraft Heinz spent $100 million in the development and reconfiguration of its digital ads, and thereby, the role of content marketing has been brought up in the light by the brand. Also, through the use of pay-per-click (PPC) campaigns, Kraft Heinz was more able to measure and track customer conversion through the marketing channels and targeting options (Paul and Mas, 2020, p.692). Along with this, PPC has boosted the web traffic for Kraft Heinz based on the customer demographics across the different regions of the UK. It made the business control and lower the advertising costs.

Conclusion

Kraft Heinz is broadly known across the globe as a global trusted manufacturer and seller of delicious foods to customers. The company has been well popular in delivering the best and high quality of delicious foods such as tomato ketchup and nutrition to eat across all the occasions mainly in home, restaurants, parties or any other special occasions. Stating about the global marketing practices of Kraft Heinz in the UAE, Heinz follows a competitive pricing strategy. The pricing decisions are mainly considered to adjust well into the economic conditions as well as to observe the consumer habits. To make an impact on the global marketing practices in the UK, Kraft Heinz has switched the slogans to ‘Beans means more’ as a part of the marketing campaign which can drive the customer focus and can influence the customer buying behavior to a huge extent.

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