Global Marketing Report Business PDF Essay Example

interconnectedness creates independent and monopolized production channels that are vertically integrated and not reliant on third parties. These channels provide the company with economies of scale and established production channels. The CEO of Caracal described a clear shipping and distribution process in a 2001 speech, as shown in the adapted figure below (Hansen and Richard, 2013). However, there is debate over whether this model of producing globally to sell at home is more efficient than producing domestically like Monsanto, a competitor of Caracal, which produces meat in Brazil for both domestic consumption and exportation.The text discusses the comparison between Cargill's ocean shipping services and companies like Shell and Handy. While Shell and Handy focus on ensuring safety and timely delivery of their products, Cargill has additional reasons for owning its fleet. Cargill's shipping service allows them to gain insight into the economic situation in different regions globally, as well as provide trading feedback from various industries. For example, Cargill's ships stopping in Chinese ports allowed them to see decreasing iron-ore stocks in China, enabling them to predict signs of the economic depression in 2008. Additionally, Cargill utilizes its strong R&D centers to create innovative products such as a reduced sugar chocolate called "Trivia," which was sold extensively in retail chains in the USA. While Cargill primarily targets commodity markets in Asia, it focuses on Western markets for experimental and marketing-oriented commerce due to its established presence in the USA and Europe.

Cargill, a multinational company, distributes its commodity and mass produced goods worldwide, except in Sri Lanka where it operates a retail chain (Seas of Change, 2010). In the Western markets, Cargill's marketing activities are

more horizontally integrated. For example, in collaboration with Coca-Cola, Cargill developed a sugar-free sweetener for the health-conscious market in the USA (Cargill, 2013). The efficient work of Caracal's R&D team is evident in their identification of the American market as accounting for nearly 80% of the reduced fats/sugars market in the confectionery industry (Confectionery, 2011). Value-added products such as cholesterol-reduced milks and environmentally friendly foam making ingredients for lower petroleum use were also introduced by Cargill (Marketing, 2013).

Cargill's marketing approach is driven by the need to cater to more competitive Western markets as compared to Asian markets where a monopolistic approach can be adopted. The transnational markets of Cargill are predominantly focused on commodities. For example, in India, Cargill has factories for olive oil-refineries and animal nutrition which require minimal customization. These factories are not located near New Delhi in water-problematic Punjab but rather in water-rich areas near Calcutta or Mumbai, allowing for easier distribution to China as well (Cargill, 2014; see Figure 2).

Figure 2: [Insert relevant information about Figure 2 here]

Caracal's factory distribution in India is notable for its reliance on established brands that have gained popularity in the Indian market. For example, Cargill has not hesitated to consume mature brands like Leonardo olive oils or re-launch the Swear brand. This strategy is also observed in the Latin American markets, where Cargill acquired leading Milliner tomato brands in Brazil. This approach reflects Cargill's preference to trust the marketing success of local or popular matured brands rather than engage in market research. This strategy is characteristic of a big company with sufficient funds to buy local brands like Adagio. However, for Cargill, it

is more than just an investment; it is a market entry strategy that aims to secure demand before entering markets with core products. In Western markets, Cargill also has to monitor changing trends and implement marketing strategies accordingly. For instance, in 2012, Cargill implemented a marketing software for price competition that takes into account current meat and competitor prices, allowing for more accurate pricing for specific cuts of beef. This targeting of price-conscious customers is especially crucial in countries like the USA, where strong competition and the lingering effects of the recession make consumers highly sensitive to prices.

The changing trends are crucial for Cargill as artificial eggs produced by Silicon Valley's Hog company, sponsored by Bill Gates, have caused a shift in the market. These artificial eggs have the same taste and nutritional value as real eggs but are cheaper and do not involve the unethical treatment of animals. Cargill has customs when entering its target markets and cooperates with fast-food brands to expand its reach. The company is cautious in its transnational entries and marketing channel management. Caracal, Cargill's franchise with KEF, demonstrates its market targeting strategy in Sir Lanka where it opened meat-processing plants in 1996. KEF is now the leading fast-food chain in Sir Lanka. Similarly, Cargill entered Russia in the early 2000s but only opened factories in 2012 after securing a contract with McDonald's Russia for beef supplies. McDonald's in Russia and KEF in Sir Lanka served as demand anchors in foreign markets.

Using a franchise for a large company like Cargill is not as costly as entering foreign markets without knowledge through KEF. This strategy is similar to other industries'

brands. Ezra locates its stores near high street Airman or Boss brands, ensuring demand and building a high tree image. Burger King chooses to locate near McDonald's to ensure demand, instead of conducting its own location research. This tactic helps brands secure their position in foreign markets by leveraging the demand from well-known brands. However, not all mass production approaches have been successful for Cargill in every market. For example, the Japanese market requires continual, small deliveries to retail chains, which Cargill failed to recognize and subsequently left the market. On the other hand, Nippon Meat secured contracts directly with retailers and delivered its products within 24 hours of receiving an order. Evaluating this situation raises questions about whether Cargill would have entered the Japanese market if it had known about these trading patterns. Unlike Nippon, Cargill owns its own fleet and may not be able to afford ocean transportation patterns, resulting in both fuel and management costs. Furthermore, Cargill chooses to sell and distribute its products on its own instead of shipping them to distributors.In the Sri Lankan market, Cargill owns its retail chain, allowing the company to gain a comprehensive understanding of consumer demand through electronic POS systems. This approach is different from the natural-sweetener production, where Cargill distributes its products to retail chains in Western markets. Caracal's success with zero-sugar chocolate and their unique marketing strategy has advantages such as being advertised alongside other low-calorie brands and observing consumer preferences through sales feedback. On the other hand, the Noble Group, a competitor of Caracal, differentiates itself through vertical integration of both marketing and sourcing channels. However, unlike Cargill, the Noble Group does

not have direct-to-consumer products as it mainly operates in coal, finance, and mining industries. This gives Cargill an advantage in receiving direct feedback from consumers and obtaining a better understanding of the competitive market. Furthermore, while Cargill's American origin influences the company as a transnational corporation, its GEM production plays a significant role in its supply chain origin.The text suggests that Cargill has become more transparent in recent years. In the past, Cargill and its competitor Monsanto invested in avoiding GEM labeling, which had a negative impact on their global image. For example, Brazil limits imports of Cargill production and European markets oppose such producers. As a result, Cargill is unable to go global or advertise its brand and remains a silent producer of GEM crops and production. Additionally, Cargill faced strong opposition in Japan from both the public and local producers. In India, farmers boycotted Cargill's fertilizers and produce as a form of opposition. The size and origin of the company contribute to these efforts by local producers to oppose its entry into the market. However, in recent years, Cargill has transitioned from a global private company to a more open and transparent conglomerate.The opening of Caracal's slaughterhouses for journalists in 2011 and the labeling of its products with unwanted artificial ingredients in 2013 mark the company's efforts towards transparency and traceability (Commonly, 2011; Reuters, 2013). This shift is likely driven by a growing trend of food-conscious customers. For global suppliers like Cargill, meeting the standards of companies like McDonald's is crucial for maintaining their image (Russia). In the early 2000s, Cargill took steps to distance itself from its image as a GEM producer

by selling continental GEM wheat to Monsanto (IMAM, 2003). As the world becomes more interconnected, it is increasingly important for companies like Cargill to monitor local markets and adapt to changing trends. To secure their reputation in food-conscious West, it is recommended that companies continue engaging in transparent activities.