South Africa Marketing Plan

7/27/2019 South Africa Marketing Plan

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M IAPRICE , DEVONKREIDER, JACOBJESSAR, ROBERTW IGGINS,

MICHAEL

INCOLLINGO

SOUTHAFRICANADVANCEMENT

Fall

10

KELLOGGSNUTRIGRAIN


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INTRODUCTION

KelloggsCompanyislookingtoexpandinternationallytoacountrywheretheyarealready

located,SouthAfrica.BybringingthecompanysproductofNutrigraintoSouthAfrica,

theyhopetoestablishanadaptedproductthatwillpleasethetargetedSouthAfrican

Consumers.

MissionStatement

Todrivesustainablegrowththroughthepowerofourpeopleandbrandstobetterserve

theneedsofourconsumers,customersandcommunities.

Themissionstatementandvisionstatementsarealargepartofhowacompanyisviewed

byconsumers.Itgivesinsighttohowacompanywantstobeviewedbyitssurroundinga

community.Kelloggsmissionstatementis,Todrivesustainablegrowththroughthe

powerofourpeopleandbrandsbybetterservingtheneedsofourconsumers,customers

andcommunities.Thismissionstatementisgoodforthedomesticmarketwithinthe

UnitedStates,buttomakeitmoreappropriateforSouthAfricathereneedstobeafew

changes.TheneedsofthecustomersarenotsomethingthattheyneedtofocusoninSouth

Africa.Togetapositiveimagetheyshouldfocusmoreonhelpingthecommunitiesand

creatingamorestableenvironmentandeconomyforthepeoplelivinginSouthAfrica.

Visionstatement

Tobethefoodcompanyofchoice.


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KELLOGGSNUTRIGRAIN 3

Byfollowingthevisionstatement,Tobethefoodcompanyofchoice,Kelloggsisopening

upanopportunitytokeepthatfocusinSouthAfrica.Byhelpingtodevelopcommunitiesin

SouthAfricathebrandimagewillbecomewellknow.Whenaproducthasapositiveeffect

ontheconsumeritwillleavealastingimpression.Thelastingimpressionwillhelpthe

NutriGrainbrandbeknowntothepeopleofeventhesmallestcommunities.

OncethecommunitieshaveasolidfoundationeconomicallyNutrigraincanbeginto

implementtheirproductsatamarketfairprice.Thiswillallowthecommunitiestogrow

withthebrand.Thiswillalsohelptocreatetrustbetweenthebrandandthepeople

aroundit.BystayingtruetothemissionandvisionstatementsNurtigrainwillkeepour

goodreputation.

Themissionandvisionstatementscomefromtheleadersandhelptoreflectwherethe

peopleatthetopofthecompanyseethebrandheading,alongwiththecommunities

surroundingthebrand.Thetrustthatwillbuildbetweenthecommunityandthebrand

willbealastingone.

PRODUCTOVERVIEW

NutriGraincerealbarsareaconvenientoptionforbreakfastorasasnack.Whilethebars

provideagoodsourceofmanynutrientsandevenwholegrains,theydohavesome


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nutritionallimitations.NutriGrainbarscanbepartofahealthydiet,buttheyshouldnotbe

relieduponasamajordietarysourceoffruitorwholegrains.

CalorieDistribution

EachNutriGrainbarisasingleservingandcontains120calories,accordingtoNutri

Grain'swebsite.Thecaloriesineachbarcomefrom3gfat,24gcarbohydrateand2g

protein.Ofthe3gfat,0.5gcomesfromsaturatedfat,while12gofthecarbohydrate

contentcomesfromsugar.FortypercentofthecaloriesinaNutriGrainbarcomefrom

sugar,while25percentcomefromfat.

WholeGrains

ThefrontofeachboxofNutriGrainbarstoutstheproduct'swholegraincontent.Eachbar

contains8gofwholegrains,whichisabout17percentoftherecommended48gperday,

accordingtotheWholeGrainsCouncil.ThewholegraincontentinNutriGrainbars

consistsofwholegrainoatsandwheat.Thegraincontentisnot100percentwholegrain,

astheproductalsocontainsrefinedwheatflour.TheinclusionofwholegrainsinNutri

Grainbarscontributestoitsdietaryfibercontentof3gperbar,or10percentofthedaily

value.

VitaminsandMinerals

NutriGrainbarsarefortifiedwithvitaminsandminerals,makingthemagoodsourceof

manyessentialnutrients.Eachbarcontains25percentofthedailyvalueofniacin,

riboflavinandvitaminB6,20percentofcalcium,15percentofvitaminAandthiamine,and


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10percentoffolicacid,ironandzinc.Eachbaralsocontains110mgsodium,or5percent

ofthedailyvalue.

Superfoods

NutriGrainalsooffersaSuperfoodFusionlineofcerealbars.Theflavors,suchas

StrawberryAcaiandCherryPomegranate,appeartoprovideadditionalnutritionalbenefit

aboveandbeyondthatofthetraditionalflavors,buttheyactuallydonot.Fruitslike

pomegranatesandacaidocontainbeneficialphytonutrientsthatmaypromotehealthand

evenpreventdisease;however,theseflavorsofNutriGrainbarscontainverysmall

amountsofthesesuperfoods.Itisbesttoconsumewholefruitsinordertoobtainadequate

amountsofbeneficialphytonutrients.

Antioxidants

TheSuperfoodsFusionflavorsalsotouttheirantioxidantcontent,thoughthisisnotdueto

theirsuperfoodscontent.Thebarsactuallycontainadditionalvitaminfortificationof

ascorbicacidandalphatocopherolacetate,whichareformsofvitaminCandE,

respectively.Eachofthesebarscontains20percentofthedailyvalueofvitaminCandE,

bothofwhichareabsentfromthestandardNutriGrainbars.Thesevitaminshave

antioxidantpropertiesthatmayhelptoreducetheeffectsofoxidativestresswithinthe

body.


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PEST ANALYSIS

ThePESTanalysisofSouthAfricaisinitiallyhardtorecoverduetothelackofinformation

providedpublically.However,withextensiveresearchanddeterminationwehavebeen

abletofindwaystodecodetheirnation.

PoliticalAnalysis

ForthepoliticalsituationinSouthAfrica,theyfaceadversitycontinuously.Asfortheir

ecologicalandeconomicalstatus,theyrankasthehighestnationwithbiodiversityinthe

world.Theirsoilisaffectedbymanyfactorsintheirunderlyingbedrock.Theirvarietyand

landformsandvegetationszoneshavethusresultedinaremarkablyhighdiversityof

species(plantsandanimalsalike)inSouthAfrica.Thisresultsinarichnaturalheritage,

whichincludesamixoftropicalMediterraneanandtemperateclimates.Theyarethusable

tomaintaintobeoneofthesixcountriesintheworldwithanentireplantkingdomwithin

itsnationalconfines.

AsforSouthAfricaslegislation,theyfaceafewboundarieswiththeirmixed/hybridlegal

system.Itiscomposedofinterweavinganumberofdistinctlegaltraditionssuchas:civil


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lawoftheDutch,commonlawoftheBritish,andanindigenouslawsystemfromAfrican

Natives.Withthesetraditionshavingacomplexinterrelationship,theproceduralaspectsof

thelegalsystemstillprominentlyprevailtobecorrelatedwiththeRomanDutchlegal

system.Duetothis,theircourtsystemisorganizedhierarchically,andconsistsof

MagistratesCourts,HighCourts,aSupremeCourtofAppeal,andaConstitutionalCourt.

TheConstitutionalCourthadthehighestauthorityinallmatters.

EconomicAnalysis

SouthAfricantradepolicyiscomposedduetotheircompositionandaggregategrowthof

trade.Intheapartheidperiod,tradeprotectionseriouslyimpededbothexportsand

imports,andtheeconomydependedonfavorableglobalcommoditypricetrendstoavoid

runningintoanexternalconstraint.SouthAfricadevelopedacomparativeadvantagein

capitalintensiveprimaryandmanufacturedcommoditiespartlybecauseofitsnatural

resourceendowments.Highandopaquetariffsseriouslyimpededexportgrowth,and

whenglobalcommoditymarketswereweak,andadecliningingoldexports,theseriously

containedaggregategrowthanddulledresponsetoexportstotheweakerrandinthelate

1980s.Duetothis,tradeliberalizationinthe1990snotonlyincreasedimportsbutby

reducingbothinputcostsandrelativeprofitabilityofdomesticsales,alsoboostedexports.

Thegrowthinnoncommoditymanufacturedsectoralexportsasaresultofliberalization

wasactuallyfasterthansectoralimports.Thissuggeststhatadditionaltradeliberalization

couldwellbeapartofthestrategytoenhanceexportdiversification.


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SouthAfricasDepartmentofTradeandIndustryhaslaunchedaCompetitivenessFundthat

providesfinancialsupporttoqualifyingentrepreneurs,allocatinggrantsthatcoverupto

50%oftheirrunningcosts.TheyalsohavetheBEE,BlackEconomicEmpowerment,which

makessurecompaniesareprovidingsharestotheiremployees.

SouthAfricahasamixedeconomywithhighrateofpovertyandlowGDPpercapita.ByUN

classificationSouthAfricaisamiddleincomecountrywithanabundantsupplyof

resources,welldevelopedfinancial,legal,communications,energy,andtransportsectors,a

stockexchangethatranksamongthetoptwentyintheworld,andamoderninfrastructure

supportinganefficientdistributionofgoodstomajorurbancentersthroughouttheentire

region.Theyareranked25thintheworldintermsofGDPasof2008.

Advanceddevelopmentissignificantlylocalizedaroundfourmajorareas:CapeTown,Port

Elizabeth,Durban,andPretoria/Johannesburg.Beyondthesefoureconomiccenters,

developmentismarginalandpovertyisstillprevalentdespitegovernmentefforts.Atthe

startof2000,thenPresidentThaboMbeki,vowedtopromoteeconomicgrowthand

foreigninvestmentbyrelaxingtheirrestrictivelaborlaws,steppingupthepaceof

privatizationandcuttingunneededgovernmentspending.Resultswereseenassoonof

2004,whenSouthAfricasawasignificantincreaseineconomicgrowth.

Theirmonetarynote,theZAR,isthemostactivelytradedemergingmarketcurrencyinthe

world.ThenotewasthebestperformingcurrentagainsttheUSDollarforthreeyears,

20022005.Thesemarketstheytradewith,besidesotherAfricancountries,include:


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Germany,theUnitedStates,China,Japan,UnitedKingdomandalsoSpain.Theirchief

exportsincludecorn,diamonds,fruits,gold,metalsandminerals,sugarandwool.

Machineryandtransportationequipmentmakeupmorethanonethirdofthevalueof

SouthAfricasimports.Otherimportsincludechemicals,manufacturedgood,and

petroleum.

Oneoftheirbiggesthurdles,whichaffectSouthAfricalocally,isenvironmentaldamage,

whichwascausebythemisuseofthelandandglobalclimatechange.SouthAfricais

unusuallyvulnerabletoclimatechangeandhasseenavastdisappearanceofsurface

waters.

SouthAfricamaintainsformaltraderelationswithvariouscountriesbymeansoftreaties,

tradeagreements,andmembershipininternationaltradeinstitutions.Thecenterpieceof

SouthAfrica'sforeigneconomicpolicyistheSouthernAfricanDevelopmentCommunity

(SADC),comprisingAngola,Botswana,theDemocraticRepublicofCongo(DRC),Lesotho,

Malawi,Mauritius,Mozambique,Namibia,Seychelles,SouthAfrica,Tanzania,Zambia,and

Zimbabwe.Thegovernment'skeypolicyobjectiveistostrengthentradeandinvestment

linkagesbetweenSouthAfricaandtheotherSADCcountries.

TheUnitedStatesisanotherofSouthAfrica'slargesttradingpartners.SouthAfricaisa

beneficiaryoftheU.S.GeneralizedSystemofPreferences(GSP),whichgrantsdutyfree

treatmentformorethan4,650products.SouthAfrica'sexportstotheUnitedStates

increasedfromR5.2billionin1993toR14.8billionin1998.SouthAfricaalsohas


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importanttradingrelationswithJapan,SouthKorea,andcountriesinSouthAmerica.

SocialAnalysis

Withagrowingpopulationof49,052,489andelevenofficiallanguages,SouthAfricahas

becomeandintenselydivertivenation.Theyhavealargemassmediasectorthat

commonlyusestheEnglishlanguage.

TheSouthAfricanblackmajoritystillhasasubstantialnumberofruralinhabitantswho

leadlargelyimpoverishedlives.Itisamongthesepeople,however,thatculturaltraditions

survivemoststrongly;asblackshavebecomeincreasinglyurbanizedandWesternized,

aspectsoftraditionalculturehavedeclined.UrbanblacksusuallyspeakEnglishor

Afrikaansinadditiontotheirnativetongue.Therearesmallerbutstillsignificantgroupsof

speakersofKhoisanlanguageswhoarenotincludedintheelevenofficiallanguages,but

areoneoftheeightotherofficiallyrecognizedlanguages.Therearesmallgroupsof

speakersofendangeredlanguages,mostofwhicharefromtheKhoiSanfamily,that

receivenoofficialstatus;however,somegroupswithinSouthAfricaareattemptingto

promotetheiruseandrevival.

Researchersinvestigatingtheimpactofthecurrenteconomiccrisisonlocalconsumer

behaviorhavefoundthat60%ofSouthAfricansareworriedaboutthefutureandtheirfear

isfuellingaconsiderablechangeintheirbuyinghabits.


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TechnologicalAnalysis

ThereisanintenseincreaseofecommercetechnologiesthroughoutSouthAfrica.Through

asurveyof150SouthAfricanbuilding,itwasrevealedthedominanceofcommunication

aspects,butnotthetransactionprovesofecommerce.Theintegratedimplementationof

ecommercesolutionsandsecurityenablingapplicationsisincrediblylimited.


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TARGETMARKETANDINDUSTRY

Thecerealbarindustryisonethatiscommittedtounderwhattheconsumerneedand

providingavarietyofproductsthatworkfordifferentlifestages.Thetargetmarketof

cerealbarsisspannedthroughoutthegenerations.IE:differentagegroupspreferdifferent

tastesversusoneanother.Theworldwidetrendtowardhealthiersnacks,practicallybars

thatdelivermultiplewholesomebenefits,issomethingtheindustrywillcontinuetosee

rise.AsSouthAfricanconsumerlifestylesmoveeverfaster,thiscountry,aselsewhere,is

experiencingandexplosionofcerealbars.AccordingtoDanaBarithwaite,thefood

researcheratBMIFoodpack,themarketismaturinginSouthAfricaandgrowingwell,

healthbarsarethebiggestsectorwithalmosthalfthemarket.SouthAfricahasavery

differentdemographicascomparedtotheUS,andsophisticatedflavorswouldonlyappeal

tosmallpartofitspopulation,sothroughtheintegrationoftheircurrentstaples,

stimulatingtheirmarketwithaspecializedbarwouldeasethediscomfort.

SWOT ANALYSIS

Strengths

SouthAfricaisdevelopingcountrywithmaturingtastesandanewandhighlyreceptive

population.Beingenabledthroughanewlyopengovernmentwithcontinuestorelaxits

strictlaws;theyareacceptinginternationalproductswithgreatsuccess.

Weaknesses


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Kelloggsneedstoperfectthetotaldevelopmentofthisnewproduct,alsosincetheyarenot

thefirstcompanytobegintoinfiltratethecerealbarmarketwithinSouthAfricatheywill

facemarketprevalencetopreexistingproducts.

Opportunities

Withthecornmealandchoiceoflocalfruits,thetastesblendthenewandtheoldSouth

Africatogetherintoawhollyopportunisticproduct.

Threats

Inevitableriskoffailure,foreigncountry,andalsoaforgeinconsumer.


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MARKETCHARACTERISTICS

Overview

SouthAfricahasapopulationof49,109,107peopleandisgrowingatarateof0.051%.

PopulationgrowthsarelowerinSouthAfricaduetoanexcessofmortalityduetoAIDS.

SouthAfricahasabirthrateof19.61births/1,000populationandadeathrateof16.99

deaths/1,000population.

61%oftheentirecountryisanurbanpopulationandthereisa1.4%ofannualrateof

changetowardurbanization.

18.1%ifadultshaveHIV/AIDS.5.7millionpeoplearelivingwithAIDSinSouthAfricaand

therewere350,000HIV/AIDSrelateddeathsasof2007.

ThedegreeofriskfordiseasesinSouthAfricaisintermediate.Bacterialdiarrhea,Hepatitis

AandtyphoidfevermakeupmostofthefoodandwaterborndiseasesinSouthAfrica.

SchistosomiasisislistedasthemainwatercontactdiseaseinSouthAfrica.

79%ofthepopulationisSouthAfricaisblackAfrican,9.6%iswhite,8.9%islistedas

colored,and2.5%isIndian/Asian.


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Thereare11officiallanguageslistedinSouthAfricaincludingIsizulu,IsiXhosa,Afrikaaner,

Sepedi,English,Setswana,Sesotho,Xitsonga,isiNdebele,TshivendaandsiSwati.

86.4%ofthepopulationareconsideredliterate,meaningthat86.4%of15yearoldsand

oldercanreadandwrite.87%ofmalesand85.7%offemalesareliterate.

13yearsold,formalesandfemales,istheschoollifeexpectancyofmostchildreninSouth

Africa.Thisstatisticdependsonlocationandsocioeconomicfactors.

TargetMarket

Ourtargetmarketconsistsofmaleandfemaleteenagersfromtheagesof1218yearsold.

Thetargetmarketwillbelongtoallsocioeconomicbackgrounds,ruralandurban,and

belongtoallmajorracesinSouthAfricaincluding,blacks,whites,Indians,andEuropean

AfricanMalays.

WearetargetingthisagegroupbecausestudieshaveshownthattheyouthofSouthAfrica

isatthemostriskformalnutritionandthathighschoolagedchildreninSouthAfricadono

eatasufficientbreakfastonadailybasis.

Astudyofbreakfasthabitsin1618yearoldSouthAfricanstudentsshowedthat21%of

ruralblacksdidnoteatasolidbreakfast,19%ofurbanblacksdidnoteatasolidbreakfast,

13%ofIndiansdidnoteatasolidbreakfast,13%ofEuropeanAfricanMalaysdidnoteata

solidbreakfast,and14%ofwhitesdidnoteatasolidbreakfast.


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PacketcerealfoodssuchasCornFlakesandRiceKrispiesareconsumedfrequentlyby

Indianandwhitestudentsbutareeatenlessfrequentlybyblackstudentsdomainlytothe

costofmanufacturing.

Porridgeand/orbreadwithsomethingtodrinkisconsumedmostfrequentlybyless

privilegedgroupsbutisalsoconsumed,insimilaramounts,bywhiteandIndianstudents.

INTEGRATEDSTRATEGY

TargetSegment

OurtargetsegmentforNutriGrainbarsinSouthAfricawillbeyoungadultsfrom1218

yearsold.Wewillbetargetingbothmaleandfemaleyouths.Wewouldliketoreacha

targetaudienceofallofthedifferenttypesofsocioeconomicclassesinSouthAfricawith

ourproducttailoredslightlytomeettheneedsoflowereconomicclasses.Wewillfocuson

ruralblacks,urbanblacks,Indians,EuropeanAfricanMalay,andwhites.Thetarget

segmentisfocusedonteenagersfromtheageof1218yearsoldbecausestudieshave

shownthatteenagersinSouthAfricaarenoteatingasufficientdiet,includingbreakfast.

Outoftheseteenagersalargenumberofthemareatriskofdevelopingchronic

malnutritionatanearlyage.

BrandPositioning

WewouldlikeNutriGrainbarsinSouthAfricatoembodyboththevaluesofKelloggsand

thevaluesofSouthAfrica.SinceKelloggsstrivestosupplyqualityandhealthyproducts


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thatenhanceconsumerlifestylesaroundtheworld.NutriGrainbarsinSouthAfricawill

thenstrivetobringbreakfastbacktointocommunitiesandprovidefamilieswitha

nutritiousproduct,whichtheycanrespectandenjoy.Theproductwillenterintoa

competitivemarketwiththehopestobringinresultsbyencompassingacombinationof

wellknownKelloggvaluesandfavoriteSouthAfricantastes.Wewillworktoward

sustainabilityinthecommunitiesthroughoutSouthAfricabyprovidingalowcost,healthy

breakfastandsnackavenue.

BusinessObjectives

NutriGrainbarsinSouthAfricawillstrivetoupholdthebusinessobjectivesofKelloggs.

ThecompanywillfocusonachievinggrowthasanewproductintheSouthAfricanmarket

andonsurvivinginthebreakfastfoodmarket,particularlyinthecerealbarmarket.Nutri

Grainwillstresstheimportanceofethicalandsocialresponsibilityinitsbrandpositioning

andfollowKelloggsobjectivetobesociallyaware.Kelloggsmissionstatementstatesthat

itisimportanttodrivesustainablegrowththroughthepowerofourpeopleandbrandsby

betterservingtheneedsofourcustomer,consumers,andcommunities.Kelloggsiswell

knownforbeingsociallyresponsible.Thecompanybelievesthatsocialresponsibilityis

keytosustainabilityandincludesenvironmentalstewardship,communityinvolvementand

nutritionleadership.

MarketingObjectives

ThemainobjectivewehaveforNutriGraininSouthAfricaistoinitiateandgrowproduct

earnings.OurobjectiveistobuildarelationshipwiththeSouthAfricancommunitythrough


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healthylivingandthereliabilityofourproduct.WewillstrivetogrowNutriGrainintoa

brandthatisasstrongasallthecurrentKelloggsproductsinSouthAfrica.Wewill

increasethenumberofSouthAfricanteenagerswhoeatbreakfastandmiddaysnacks

throughtheinexpensiveandhealthychoiceofNutriGrainbars.Wewillincreasesales

throughstorepromotionsandbypartneringwithSouthAfricansoccerteamstosupport

NutriGrainoverothercompetitors.Byaffiliatingourselveswithsoccerteamsandwell

knownSouthAfricansportswewillbeabletoincreaseawarenessofourproductinSouth

Africancommunities.

ProductOffering

KelloggsNutriGrainbarswillencompassthetastesofSouthAfrica.Thecrustofthecereal

barswillbemadewithcornmeal.MieliePapisastiffcornmealmixthatisthestaplefood

ofmostSouthAfricandiet.CornmealisaddedtomanySouthAfricandishes.Bymaking

thecrustoftheNutriGrainbarswithcornmealKelloggswillappealtothepalatesofits

SouthAfricancustomers.ThefruitfillingoftheNutriGrainbarswillcomeinthree

differentflavorsthatarenativetoSouthAfrica.Bananas,mangos,andpineapplesarethree

ofthemostfrequentlyeatenfruitsinSouthAfrica.ByfillingtheNutriGrainbarswith

thesefruitswewillbetargetingthespecifictastesofouraudience.

Pricing(CompetitiveandValuePosition)

Thecerealbarandbreakfastbarmarketisaverycompetitivemarketwithmany

companiessellingclosesubstitutestoNutriGrain.ThebiggestcompetitorforNutriGrain

willbeWheatbixmanufacturedbyBokomoandpricedat3.24foraboxof48barsand


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1.74foraboxof24bars.StorebrandssimilartoWheatbixandcheapercompetitorbrands

suchasAsdasellfor2.15.Wewillneedtobepricedcompetitivelyamongstorebrands

andwellknownnamebrandssuchasBokomo.PricingNutriGrainbarsclosertostore

brandswillgiveusanadvantageoverthewellrespectedbrandofWheatbix.

ThereisaneedtoadjustpricingtotheSouthAfricanmarket.Peoplearenotaswelloffin

thismarketandwewillhavetosellourproductatadiscountascomparedtothedomestic

market.Anestimatefrom2000put50%ofSouthAfricanpopulationbelowthepoverty

line.Thereisalsoanunemploymentrateof24%asofa2009estimatefromtheCIAworld

factbook.FurthermoreGDPpercapitais$10,300estimatedasof2009,whichisverylow

whencomparedtoothernations.Alsotheinflationrateisworrisome,at7.1%bya2009

estimatebytheCIA.Currentlytheexchangerateis6.92SouthAfricanRandsto1dollar.

SouthAfricaishoweveranemergingmarketone,whichisseeingrapidgrowthand

industrialization.Becomingpartofthisemergingmarketshowsgreatprospectsforthe

future.

Ourpricingobjectivewillbetomaximizeourprofit.Thelowestpricewewouldbeableto

goisoneinwhichourmarginalrevenuefromabar,equalsitsmarginalcost.Atthislevel

wecanfindaperfectlycompetitiveequilibriumquantityandprice.Itisnothowevera

perfectlycompetitiveindustry.Thismarketisoneinmonopolisticcompetition,onein

whichtherearemanycompaniessellinggoodsthatareclosesubstitutes,withfreeentry

andexitintothemarket.Inthebeginningwemayneedtopriceatthislevelfor

promotionalreasonstogetourproductout.Tomaximizeprofitwecanpricesomewhere


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abovethislevel.Theprofitmaximizingpointwillbeifwedrawalineuptoademandcurve

derivedfromextensivemarketresearch.Thiswillbecontingentonwhatthemarketwill

take,andhowourcompetitorsplaythepricinggame.Inthelongrunweuselongrun

marginalcost,andthemarginalrevenuecurve,uptothepointwherelongrunaveragecost

istangenttoourdemandcurve.Atthesepointswewillfindourprofitmaximizingpoints

andwillbeenabledtoachieveourgoalofmaximizingprofit.Pricinglessthenthiswould

notmakesenseforourbottomline,andexcessprofitswillcausemorefirmstoenter.

DistributionTactics

PickandPayStores,Shoprite,andMassmartarethreeoftheleadingsupermarketsand

fooddistributorsinSouthAfrica.Wewillwanttodistributethroughthesestoresbecause

theyarewellknowninSouthAfricaandwellrespectedbymanypeopleincludingour

targetmarket.Thereareatotalof775PicknPayStoresacrossSouthAfricathatarea

combinationofFamilyStoreandSupermarkets.ShopriteisoneofSouthAfricasmost

trustedbrandsandthehighestpercentagesofshoppersinSouthAfricachooseShoprite

overotherstores.Shopriteofferscustomersthelowestpricesforfoodandhousehold

amenitiesandhas309storesthroughoutSouthAfrica.Massmartisthethirdlargest

distributorofconsumergoodsinAfricaandaleadingretailerofwholesalerfoods.

UseofRetailers

Ofthe31,000retailstoresinSouthArica,1,000ofthemgenerate60%ofthecountrys

business.Woolworthsisapopularretailchainthathasaseriesoffoodstoresthroughout

thecountry.Directmarketingwouldbeineffectiveforacerealbarattemptingtoinfiltratea


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newforgeinmarket.Theuseofcatalogsandonlinedistributorsmaybeusedafterthe

productseesameasurableamountofsuccess,however.Changecouldalsobeverycostly,

soitwillbeimportanttohaveastrongdistributionsystemfromthestart.

Middlemen

FactoriesinSouthAfricawouldbetheplacewheretheproductwillbecreated.Shippingof

SouthAfricanNativeingredientsbacktotheUnitedStatesandthenshippingthefinished

producttoSouthAdrivawouldbeovercostlyandineffective.Nutrigrainfactorieswillbe

setupinSouthAfrica,employedandmanagedbytheirnativeworkers,andoverseenby

U.S.representatives.Agentmiddlemenwouldgiveustherighttoestablishpolicy

guidelinesandpricesthatrequireagentstoprovidesalesrecordsandcustomer

information.ThisallowsKelloggsmorecontrol,asopposedtousingMerchantMiddlemen.

ForeignMiddlemen

Withourtargetmarket,theuseofforeignmiddlemenwouldletusemploypeoplewho

knowthecountryanditsnativepeoplebest.Useofforeignmiddlemenwouldshorten

channelsandallowustohaveaconstantcontactwiththemarket,andthirdparty

distributors.Thesemiddlemenwillsetourproductupwiththirdpartydistributorswho

arenativetothecountryandareabletogettheproductwhereitneedstogo,whenit

needstogetthere.Foreignmiddlemenhaveknowledgeofthegeographyandcultureof

SouthAfricathatdomesticmiddlemenmayneverunderstand.Therearealsodrastic

changesinwealththroughoutSouthAfrica.Inruralareas,wewillhavetodistributeto

large,wellknownretailstores,andinlessruralareas,itwillnotbeasimportantbutwe


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willstillneedtomaketheproductavailablewhenpossible,throughsmallernativechain

stores.

BrandCommunication

Byusingacombinationofpushandpullcommunicationwewillbeabletomeettheneeds

ofSouthAfricancommunitiesthroughourcosteffectiveandhealthyproduct.NutriGrain

willcommunicatehealthylivingandeatingtoruralandurbanfamiliesofallsocioeconomic

backgrounds.SouthAfricaisagrowingandprosperingnationwithmanybackgroundsand

peoples.NotonegroupismorelucrativetoNutriGrainorKelloggsthananothergroup.

Wewillcommunicatehealthylivingandeatingto1218yearoldmalesandfemalesby

promotingourproductthroughtraditionalSouthAfricansportssuchaswellknownsoccer

teamsandsportingevents.OurbrandwillcommunicatethatKelloggsisinterestedinthe

futureofSouthAfricabypromotingaproductthatembodieshistoricalSouthAfricantastes.

AdvertisingChannels

SABC1isthemostwatchedstationinSouthAfrica,whichoffersnew,entertainment,and

sports.Wecouldshowcaseourproductthroughtheuseofcommercialsduringthetarget

marketsmostwatchedtimeslots.Kudaclub,anonlineTVservicebyMNet,isanotherplace

wherewecouldplacecommercials.WiththeonlineTVBroadcast,wecouldalsoutilize

popupadvertising,andwebsiteadbanners.

SportingEvents,likeduringaBafanaBafanagame,amenssoccerteam,wecouldplace

bannersatthestadiums.AnothercosteffectiveuseofadvertisingcouldbeseenatBanyana


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Banyanagames,whichisawomenssoccerteamthatisnotintenselyfollowed.Rugby

however,isamoreprobableformofsportsadvertisingsinceitisthemostfollowedevent

inSouthAfrica.

SalesPromotions

Throughsports,thecompanycouldsendcustompackagestosportsteams,andalso

showcaseparticularteamsontheirpackaging.Alsotheycouldplacethisnewproductnext

tootherexistingcerealbarsinthedistributors,thereforepiggybackingontheirdominance

forunderstandingthroughthecommunity.

SalesForce

Thesalesforcewillworkverycloselywiththedistributorsbecauseourmaindistributors

willbelargescalegrocerystoresandthesmallcommunitylevelstorethatthelargerstore

distributeto.ThesalesforcewillbeinchargeofpromotingNutriGrainthroughsports

teamsandactiveliving.TheywillworkwithsmallcommunitystorestobringtheKelloggs

brandclosertotheconsumerandembedafeelingofKelloggscommitmenttohealthier

familyliving.

Byutilizingthirdpartysalesteams,whicharenativetoSouthAfrica,wewillbeableto

haveateamthatisfamiliarwithworkingwithSouthAfricans.Thisallowstheproductto

createabetterbrandimagineasaSouthAfricansnackasopposedtoanAmerican

attemptingtoimitateSouthAfricanFlavors.Wewillworkalongsideofthesalesforceto

handleproblemsthatmayarisewithretailersandactualcustomers.Allcustomerfeedback,


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5

comments,questionsandconcernswillbehandledseriouslybyateamofAmerican

professionalsthatcanmakeanychangesnecessarytotheproductorproductimage.

IMPLEMENTATIONANDTIMING

There is no real set time to enter the market just wait until the area can sustain our product

otherwise it will become a high priced low demand product even when the country is able to

sustain it.


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WORKSCITED

"AboutShopriteFoodRetailingtoConsumersofAllLevels."WelcometoShoprite-Lower

PricesYouCanTrustAlways.Web.30Nov.2010.

.Agbola,By."EstimationofFoodDemandPatternsinSouthAfricaBasedonaSurveyof

Households|AfricaSouthernAfricafromAllBusiness.com."SmallBusinessAdvice

andResourcesfromAllBusiness.com.Web.30Nov.2010.

.

"CIATheWorldFactbook."WelcometotheCIAWebSiteCentralIntelligenceAgency.

Web.30Nov.2010..

ExchangeRate.com-CurrencyRates.Web.30Nov.2010..

KelloggCompany.Web.30Nov.2010..

Massmart.Web.30Nov.2010..

"NutrigrainBarNutritionInformation|LIVESTRONG.COM."LIVESTRONG.COM-Health,

Fitness,Lifestyle|LIVESTRONG.COM.Web.30Nov.2010.

.

"SouthAfricanFood."ExploreSouthAfrica-SouthAfricanTravelandAccommodation.Web.

30Nov.2010..

"SouthAfricanFood."ExploreSouthAfrica-SouthAfricanTravelandAccommodation.Web.

30Nov.2010..


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7

"SouthAfricaFreshFruitsExporter."China,Africa,Asia,EuropeTradeandSourcing.Web.

30Nov.2010..

"WelcometoPickNPay|FindRecipes,LifestyleTips,Events,&ShopOnlinePickNPay."

PicknPay.co.za.Web.30Nov.2010.

.

Documents

South Africa Marketing Plan