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Kraft Foods Is The Worlds Largest Food Company Marketing Essay

Inspiring the trust of others – consumers, customers, business partners and fellow employees – may seem like second nature. But, in fact it takes a conscious effort and a strong commitment from the entire company to always do what is saying that is going to do…and to do it in the right way.

Succeeding in business is tough, and sometimes aggressive goals can seem impossible to meet while playing by rules. Fortunately the Kraft Foods company has a well – earned reputation of following the rules and respecting the values. It’s the company way of doing business.

Kraft Foods is the world’s second largest food company . It has a market presence in over 160 countries. Originally established as a chess wholesaler in Illinois, U. S. in 1903 the company grew with a combination of natural growth acquisitions to be a dominant force in many food/grocery sectors. The current structure of the organisation was established in 2000.

Kraft is one of the world’s biggest employers with over 97,000 employees worldwide in 2009. The portfolio of brands includes nine brands with annual turnovers over $1 billion each and over fifty brands with seals of over $100 million each. More than 40 of its brands are over 100 years old.

There are three main geographical units: Kraft Foods North America, Kraft Foods Europe and Kraft Foods Developing Markets. The operations in North America and Europe are organised and managed by product category. In the Developing Markets the business is managed by geographic location. Sales figures are reported under the following headings - U.S. Beverages, U.S. Cheeses, U.S. Convenience Meals, U.S. Grocery, U.S. Snacks, Canada and North America Foodservice, Kraft Foods Europe and Kraft Foods Developing Markets.

Key factors in the Kraft business environment:

Customers

Seasonality

Competition

Distribution and marketing

The products are generally sold to supermarket chains, wholesalers, hypermarkets, mass

merchandisers, convenience stores, petrol stations, drug stores and value stores. The retail trade

in most countries is consolidating and polarising.

The marketing activities are conducted in three main ways: consumer marketing in both traditional media and on-line media, consumer incentives such as money-off coupons and competitions, and trade promotions to support price features, mass displays and other in-store merchandising such as sample tastings of products.

Strategy

There are four priorities that will shape the long – term strategy:

1 – to focus on growth categories

2 – to expand penetration in developing markets

3 – to expand the presence in instant consumption markets

4 – to increase margins by the improvement of the portfolio mix and by the ongoing reduction of costs whilst still investing in quality

Human resources

The good quality comes from the best workers…the philosophy of Kraft Foods can be sum up in:

Inspiring trust

Acting like owners

Open and inclusive

Leading from the head and the heart

Discussing, deciding, delivering

Kraft’s success at cultivating talented leaders has been honed over decades.

Key Factors that helps Kraft Foods in being successful:

Kraft Foods is a food company – nothing speaks for the corporate values more than the relentless focus on food safety. Kraft Food has earned that thrust by making safe products

Marketing is designed to persuade people and Kraft Foods has been very successful at it

Kraft Foods competes hard – but fairly

As a large manufacturer, Kraft Foods affects the environment in many ways, thing which is an inevitable part in running a business. But the big effort in preventing pollution, minimizing waste, and reducing the use of natural resources is a big and important point of the company strategy

Key Factors and Challenges That May Affect Kraft Foods

Kraft Foods operate in a highly competitive industry, which may affect their profitability

The consolidation of retail customers, the loss of a significant customer or a material

reduction in sales to a significant customer could affect Kraft’s operating margins, their profitability, their net revenues and their results of operations

Increased price volatility for commodities Kraft purchase may affect their profitability

Kraft product sales depend on their ability to predict, identify and interpret changes in

consumer preferences and demand, and their ability to develop and offer new products rapidly enough to meet those changes

If Kraft is unable to expand their operations in certain emerging markets, their growth rate could be negatively affected

Kraft may not be able to complete proposed acquisitions or divestitures successfully or integrate acquired businesses successfully

Changes in Kraft’s debt rating and the effects of volatile economic conditions on the credit market could adversely affect their borrowing costs and liquidity

Legal claims, product recalls or other regulatory enforcement actions could affect sales, reputation and profitability

Kraft Foods will be recognized as the leading company in the United States in its ability to attract, develop and retain the highest caliber talent and to fully leverage that talent to achieve consistently superior business results.

At Kraft Foods, they have developed programs and initiatives that support diversity within the organization and within the community.

Competitive advantage and international trade

Kraft Foods’ competitive advantage is its company size. It thrust to collaborate with other companies further augmented its competitive advantage. The company has experienced sporadic progress and growth upon acquiring other companies to expand its horizons and business endeavor. Kraft does this in to increase revenues on an annual basis.

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