International Business Practices- Simulation 3:
H&H Co. Ltd aims to be the world's favorite ketchup on every table. H&H specializes in making Tomato ketchup. It was during the 1800s that the use of tomato ketchup came to the attention of British consumers as a result of its popularity with American servicemen. H&H launched its tomato ketchup in 1995 in the UK and became the country's most popular sauce. Today the UK market is more than 50 million and H&H has a 50% share. You can search in most food cupboards in this country and you will find a bottle of H&H ketchup. The main ingredients of H&H ketchup are tomatoes, sweeteners, vinegar, salt, spices, flavorings, onion, and/or garlic. The types of sweetener used are usually granulated cane sugar or beet sugar. The spices commonly used to enhance the flavor of the tomatoes are allspice, cassia, cinnamon, cayenne, cloves, pepper, ginger, mustard, and paprika. The white vinegar, commonly known as 100-grain distilled, helps to preserve the ketchup.
H&H adopts a global marketing strategy which involves the creation of a single strategy for a product, service or company for the entire global market embracing many markets and aiming to level the difference between them. Consumers across the globe share many similarities, yet at the same time they have their own unique set of values and culture.
H&H uses premixed or encapsulated spices, which are easier to use but more expensive. Whatever the form, spices must be of a high quality. Thicker consistencies require a greater ratio of sugar and spices relative to the tomato juice. Due to its major success in the UK, H&H now wants to expand its operations and enter into different Asian markets. H&H uses the business strategy of 'gain the lion's share of the market and the profits will follow'. H&H is concentrating on four things. First, the ability to produce in bulk using sophisticated technology; second, being able to use the marketing strategy , best practices and lessons learnt from the UK market; third, the ability to bargain when dealing with suppliers; and fourth the advantage of producing a brand that has a global presence. H&H believes that if they have 51% of the market their next nearest rival can only gain 49%. By winning the largest share of the market they are best placed to benefit from economies of scale - the advantages of being big - enabling them to lower the unit cost of producing items.
However, entering new markets and especially Asian markets like India, China, Pakistan and Afghanistan, can bring different challenges which translate into extensive research work. You are the Brand Manager for H&H Tomato ketchup and you are asked to develop a plan for entering the new markets. Your director has asked you to make a report based on the following questions:
Questions-
1. In some Asian countries, government officials might suggest that the facilitation of payments or bribes will make it easier for market entry. What steps should H&H take in researching and preparing to enter one of these corrupt markets?
2. Select two markets of your choice in Asia where it will be most feasible to launch H&H Tomato ketchup. Select two markets in which it will be most difficult to enter and should not be entered at this time.
3. Identify strategic options to enter into one of these markets that you have selected. Develop a strategy for establishing and maintaining a long term presence.
4. Choose one market that you will like to enter first and develop a market entry method keeping in mind the lesson plan and the course material.