Nack Brands Mondelez In Bangladesh: [Essay Example], 927 words GradesFixer
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Nack Brands Mondelez in Bangladesh

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Mondelez, one of the biggest snack brands of the world is present in more than 160 countries in the world. In the month of August they made the official announcement of opening its first site in the country, as it celebrated 70 years of operations in India. Tang, the imported powdered beverage brand, has been present in the country since 1995 which actually motivated the company to come with the products which have been admired by consumers worldwide. A corporate office was inaugurated in Dhaka, rolling out new billing systems and warehouses across the country. The reasons for the selection of this specific company and country are:

  • The company is entering into the eighth most populous country of the world with more than 160 mn customers, hence tremendous growth opportunity.
  • Appointment of Indian Category Marketing Manager as the Country head for Bangladesh makes it important to see whether he will try to replicate the Indian model or bring in a new approach.
  • Venture of various Chinese companies into Bangladesh will give a tough competition to any company which is trying to establish its presence.

12C Framework of Bangladesh:

Culture

More than 98% of the people in the country speak the official language Bengali and the percent of people speaking or understanding Hindi or English in the country is very less. Warm treatment and relationship building is inherent to everyone in the country. The country is predominantly a Muslim nation with more than 90% people practicing Islam. Hence a localized approach is very important for a new entrant.

Country

Population of MAC (Middle and affluent customers) is increasing at a good pace around 10% or 11% per year, and at a pace that outstrips many other Asian markets. (Appendix A). At this pace, Bangladesh will grow its MAC population by 65% in next 5 years says BCG. By 2025, it is expected to nearly triple, to about 34 million. The GDP growth and poverty decline is also a testimony of it being a favored nation. (Appendix B ).

3. Concentration

The population of the country is fairly spread across the eight administrative divisions and close to 10% population is concentrated in the cities of Dhaka, Chittagong and Khulna (Appendix C). But 80% of MAC population is concentrated in two cities: Dhaka and the eastern port city of Chittagong.

Choice

As per a BCG reports (mentioned in References) the consumers have a strong brand affiliation, and a willingness to spend more for quality. But affinity for a brand is followed by the preference basis the price of a product. Around 60% people in a survey of 2000 Bangladeshi’s identified both brand and quality as factors in packaged food segment. Hence product education and winning the consumer initially is very important.

Consumption

The food consumption patterns are highlighted in Appendix D. also, the average daily consumption of calories per person is 2318 Kcal which is in favor of introducing a snack brand like Mondelez. But about one fifth of the population of 160 million is unable to afford an adequate diet.

Contractual Obligations

In 2017, Sheik Hasina invited companies from India to invest in Bangladesh and a promise of offering SEZs. Food industry was one of the prime focuses for the government offering the advantage of high demographic dividend and cheap labor costs. Federation of Bangladesh Chambers of Commerce & Industry president Abdul Matlub Ahmad said that there is also a possibility of supplying back to nations like India in future, leveraging the advantage of reduced costs. Besides, very strong labor laws were brought into effect after the collapse of a garment factory which killed 1132 workers in 2013.

Caveats

Major usage of Bengali as written and oral language needs to have people who know Bengali as a part of the establishing team. The condition of the road infrastructure as well as the electricity is in a very bad shape in the country. Hence production as well logistics of transportation remains a matter of concern.

Capacity to Pay

60% of the 2000 Bangladeshi consumers surveyed by the BCG said that their income is expected to rise in subsequent 12 months, showing that willingness to spend will also go up. This sentiment was strongest among MAC consumers, 71 percent of whom believe that their incomes will rise.

Communication

More than 66% percent of the 2000 people surveyed by BCG used internet to search for products online and amongst them 82% said that they trust the source but 70% also said that information obtained from a friend/known is important (Appendix E). Though E-commerce is in its nascent stage, but with only 15% MAC customers buying online, main focus should be on OOH advertising, TVC, newspaper etc and digital should be a futuristic approach.

Currency

The country has strong forex reserves worth of $33 billion against a normal requirement of $20 billion. The taka is not expected to depreciate sharply against the US dollar during 2018. Bangladesh’s only concern is its weak export position compared to neighboring countries and imports being cheaper. It will force the country to depreciate take to 84 to 84.50 during future time which should be the short term focus for a new company.

Commitment

Ensuring the quality levels and establishing strong brand equity during the initial years will hold the key for a company like Mondelez. Innovative advertisements and even BTL activation can help create the required awareness and desire for the products on the offering. Besides, a method to cope up with the infrastructural challenges will help them produce better.

Channels

Replication of what a company has been doing successfully in an Asian country like India can ensure success in Bangladesh. Strong presence across the geography can help the cause in a big way.

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