Strategic Marketing Report: Hart's Bakery's US Market Entry Plan

This report provides a strategic marketing analysis for Hart's Bakery, focusing on its potential expansion into the US market with organic chocolate products. The report begins with a PESTLE analysis to identify political, economic, social, technological, environmental, and legal factors influencing the company's success in the US. It then evaluates three market entry modes—licensing, joint ventures, and franchising—recommending licensing as the most suitable option. Furthermore, the report delves into market segmentation and targeting strategies, critically assessing the ideal target market for Hart's Bakery. Finally, it explores Porter's generic strategies to identify how the company can gain a competitive advantage. The report concludes with a summary of the findings and recommendations for Hart's Bakery's strategic marketing approach in the US market.

STRATEGIC
MARKETING

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Analysing the opportunities and threats in the French market through PESTLE analysis.. . .1
TASK 2............................................................................................................................................4
Modes of market-entry and suitable mode for Hart's bakery.................................................4
TASK 3............................................................................................................................................6
Concept of market segmentation and targeting and critically evaluate the target market......6
Market segmentation..............................................................................................................6
TASK4.............................................................................................................................................9
Porter's generic strategies and how the company can gain advantage by these strategies.....9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Strategic marketing is the way of defining the uniqueness of company from its
competitors by identifying its strength in order to provide better values to consumers in terms of
both products and services. Strategic marketing is used for identifying the needs and desires of
customers for creating a plan to reach out to them to accomplish satisfaction among customers.
The company considered in this assignment report is Hart's bakery which is a UK based
company in the food & beverages sector (Wilson and Gilligan, 2012). Hart's bakery decided to
launch organic chocolate product in United States of America. This report will identify the
opportunities and threats faced by Hart's bakery in order to launch their chocolates in United
States market by using PESTLE analysis. This report will also assess the three modes of market
entry and will suggest best available mode to enter in US market Along with market
segmentation and targeting. Also, to identify the competitive advantage of the company by
applying porter's generic strategy.
TASK 1
Analysing the opportunities and threats in the French market through PESTLE analysis.
Background of the company
Hart bakery is a small business firm in United Kingdom who is providing a variety of
products such as, breads, lunch, coffee and many more bakery items to their customers. The
company wants to expand their business in developed countries such as United States for
introducing their new product i.e. chocolates to the customers in UK. United States is taken for
expansion because this is a developed market and support the expansion of small and medium
size businesses. This country has huge potential for the Hart's bakery due to eating habits of
American people. The people of America are attracting towards the organic products and
chocolates is the one among the many products which is preferred by the people. So, the
company decided to launch its organic chocolates into the US market for getting the
opportunities to expand its operations.
Pestle analysis
This analysis is used for identifying the external or macro environmental factors
responsible for growth or hindrance of an company. These factors have different impact on
different sectors of a economy. The analysed results can be used for identifying threats and
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weakness in SWOT analysis. An organisation needs to perform this analysis in order to know the
threats and opportunities which lies in the targeted country. Factors like political, technological ,
social, environment affects the company in performing well (Sargeant and MACQUILLIN,
2016). Management of a company is liable for doing this analysis in order to get to know about
the factors responsible for less productivity and areas in which a company can improve. Pestle
stands for:
Political- These factors are related to the intervention of government in the US economy.
These factors generally includes taxation policy, stability of government, labour law,
environmental law which effects the growth of organisation. Hart's bakery must follow these
rules and regulations for support from government in their operations. Threats- Regulations of US government on GMO food is a major problem for the
company. Opportunities- Hart's bakery should use GMO free organic chocolates with labelled
calories and constituents to attract more customers and stay active in the market.
Economical- These factors have a significant effect on the organisations profit. These
basically includes Economy growth, rate of interest, exchange rate, inflation etc. These have a
huge impact mostly on B2C organisations. Since Hart bakery is a B2C company, it needs to keep
an eye on these factors for less impact in case of changes in these laws. Threats- Unemployment rates and state of government can affect the company
performance because of high prices. Opportunities- Hart's bakery can introduce different types of sizes of their organic
chocolate so that people wont find it expensive. If they can't afford the bigger size, then
they can purchase smaller size at less prices.
Social- These factors focus on identifying customer needs and emerging trends. These
factors includes change in family demographics, change in attitude and cultural trends and
lifestyle change. These factors have direct impact on how marketers interpret their customers
needs. Hart bakery should identify the changes in trends and behaviour of consumers for
providing them good quality products. Threats- Different cultural taste of food and increasing awareness of healthy eating habits
among American peoples is a threat to company's product.
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 Opportunities- Hart's bakery needs to find out about the type of product which will be
suitable for these different types of people (Malshe, 2013). The people are paying
attention to their health and prefer organic food and Hart's bakery can provide organic
chocolates to customers because of the healthy eating habits.
Technological- These factors deals with change in technological trends and innovative
developments that affects the company. Factors include change in technology, development in
automation sector, R & D. Company needs to adopt new and updated technology in their
operations for improving the efficiency of their operations. Threats- Big companies have an competitive edge over the small firms in technology like
Food orders and marketing due to the costs issues. Opportunities- Hart's bakery can use their websites for placing orders of organic
chocolates or can publish articles for increasing awareness about health benefits of
organic food. With the use of technology, Hart's bakery can reach to customers in new
and easy way and can deliver efficient products quickly.
Environmental- These factors deals with change in environment or how the decision of
an organisation effects environment. Factors like co2 emission, insufficiency of raw materials
disposal of waste and recycling process. Customer demands that the product they purchase
should be from sustainable resources. Hart's bakery must take care of these environmental laws
while doing their process and activities for the protection of environment. Threats- Sustainability of raw material is other important factor to consider. Climatic
problems are threatening the farmers for the supplies of raw cocoa. Opportunities- Hart's bakery should provide storages facilities to cocoa producers so that
in case of climatic problems, Farmers can protect their raw product through these
storages. When the company needs cocoa, they can took it at reasonable rates directly
from the farmers instead of buying from somewhere else where the raw cocoa prices are
high (Kashmiri and Mahajan, 2014).
Legal- Organisation needs to consider legal factors of a economy before investment.
Factors like, health and safety issues, product safety, trade regulations which effects the
company's operations in that economy. Changes in these laws will adversely effects the
operations of the company so , management of the company must monitor these changes .
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 Threats- Various legal laws like Environment protection law, inadequate labour law and
antitrust law are creating barriers for the company. Antitrust law is a major threat for the
company because it reduces the capacity to grow due to mergers and acquisitions in the
US market.
 Opportunities- Hart's bakery should concentrate on growth strategies to promote quality
of organic chocolates instead of mergers and acquisitions.
Hart's bakery mostly have opportunities in US market. But there are also some major
threats like global warming and antitrust law. Company can further expand in this market and
extend its supply chain in order to address the threat of increasing cost of labour. Company can
raise awareness about the health benefits of organic food which leads to promotion of both
healthy eating habits as well as their own organic chocolate. Moreover the company can open
new stores of their new products in order to expand in US. This pestle analysis states that the
organic chocolate has huge potential to grow. An business does not depend only upon the quality
to achieve their targets Instead there are many external factors that effects the growth and profits.
TASK 2
Modes of market-entry and suitable mode for Hart's bakery
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Source: Entry strategies for foreign market, 2016
There are various modes that needs to assessed before entering in a new market or
country. Hart's bakery is introducing chocolates in US market. For entering in United States
market, Company needs to analyse these various modes of market entry in order to sustain
among big players currently exists in American foods and beverages sector. With the help of this
analysis company can perform well and enhance their output in foreign market. Three of these
modes are analysed below:
 Licensing- International licensing mode allows abroad businesses to produce a product
for a specified time in new market. In this the license provider provides certain resources
and rights available to the license holder in the host country. The rights may include
patents, copyrights, technology, skills so that the licensee can manufacture and sell a
relative product to the one the licenser is producing without opening another operation in
the host country. It is a agreement which can be customised according to the needs and
interests of licensee and the license holder. It will help the Hart bakery fro creating the
reach to the potential customers and if company is generating profit then company can
further expand their all operations in the new country.
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Illustration 1: Modes of market entry

 Joint ventures- It is a process which involves two or more companies so that they can
work together for a specific project. The profit and loss in these ventures depend upon
shares of different shareholders (Shank and Lyberger, 2014). It is different from a
acquisition due to no shift in ownership in the treaty. The main thing to reckon in joint
ventures are transfer of technology, ownership, pricing, capability of local firm and
interference of government. Joint ventures wants to improve their shared resources but
still each firm tends to improve their own resources without considering the impact on
other firm. Through this, the company can use resources and technology of their ventures
for producing the goods without investing in the new technology or equipments hence it
lowers the cost of production.
 Franchising: is the arrangement where one party gives the license to another party to
use its trademark, process of making and marketing goods and services according to
certain conditions. Its involves two parties: the franchiser and the franchisee. Franchiser
is the one who grants the licence and franchisee is the one who takes the license. The
franchise system allows the business to grow and expand. It reduces the investment of
capital and risk liability. This strategy is also used by the people for entering in the
competitive market. Through this, the Hart's bakery can expand their products and
operations in the new country without worrying about patents and trademarks. This will
also helpful for producing the quality based products and supplies them to the franchisee
so it also lowers the transportation and supply cost.
Based on the above analysis, The most suitable mode of market-entry for Hart's bakery is
through licensing in United States. With the help of licensing, taken firm could use the resources
and machinery of the Licenser which will save cost of the organic chocolate of Hart's bakery.
With the help of licenser, Company can expand its product in US market without any legal issues
of Patents, copyrights etc. By saving cost on resources, Hart's bakery can use this money for the
marketing strategies of organic chocolate which will increase the customer base of new organic
chocolate as well as for the Hart's bakery in international market of United States. US market
have opportunities for the company due to the technological advancements and increasing
awareness of organic food in health sector.
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TASK 3
Concept of market segmentation and targeting and critically evaluate the target market
Market segmentation
Source: Market segmentation diagram, 2013
It is a process of dividing the market of customers into different groups and segments on
the basis of different characteristics, needs and wants, purchasing power and degree of
willingness to buy in order to supply better services and products based on their needs or desires.
There are typically 4 types of Market segmentation used by organizations in order to generate
growth:
 Demographic Segmentation
This segmentation based on different variables such as gender, age, income, housing type
educational level, family size, family life cycle , marital status, religion, language, ethnicity and
occupation. With the help of this segmentation an organization categorized need of consumers.
 Behavioral Segmentation
This type of market segmentation the groups of customers differentiate according to their
knowledge of attitude towards, usage rate, response, loyalty status and readiness stage to a
product. It help a company to identify with a similar behavior (Ayub and et. al., 2013). It would
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Illustration 2: Market Segmentation

be done on the basis of qualitative data and not completely quantitative data. After identifying
behavior of customers, company can further provide unique range of organic chocolate
according to their needs of taste.
 Psycho graphic segmentation
It is quit similar to behavioral segmentation. In it consumers are classified into market
segments on the basis of their personality, attitude, values, self image, interests, opinion, lifestyle
etc. Companies make products to fulfill their psycho graphic needs and wants of customer. If the
company is able to understand the customer's psychology, there can target them better with the
products and services.
 Geographic Segmentation
It is divides people on the basis of geography. It is the simplest methods of market
segmentation. Marketers segment the people according to geographic criteria such as nations,
states, regions, countries, cities and postal code. With the help of this segmentation, company
can identify their different customer needs and can provide better products based on their
geography.
Hart's bakery can use demographic segmentation for their chocolate as people from all
age and demographics tends to prefer chocolates and even give more preference to the organic
chocolates. Bakery is targeting children and youths for their chocolates due to huge demand of
chocolates in these age groups.
Targeting
Targeting is defined as the process of choosing target market from a particular sector. It
involves breaking the market into small segment and focusing on them. The market is targeted
according to the age group, gender wise, culture etc. After segmenting the particular class,
targeting is done.
Youth and children now a days have a habit of eating chocolates. Here, the target market
is children in Hart's Bakery company. As it produces the bakery items which includes chocolates,
cookies, cakes, pastry, ice-cream. The main focus is children who lies between the age group of
3-15. Most of the children prefer to eat chocolates rather than fast food which is a good
opportunity for Hart's bakery (Robertson and Wardrop, 2012). The company should bring
innovation in the products which attracts large number of customers. It is very important for any
company to target particular class of people in order to produce goods. For success, profitability,
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sustainability of Hart's Bakery creative ideas should be use. Thus, company should provide gifts
to the children to encourage other kids for purchasing of goods. The demand of these chocolates
is very high during the festivals like Valentine's day, Halloween, Easter eggs, Christmas etc.
which will drive growth and sales of the newly launched product.
TASK4
Porter's generic strategies and how the company can gain advantage by these strategies
Source: Porter's generic strategies, 2016
These strategies also known as porter's marketing techniques. These strategies are used by
organisation to enter in the market and gain an competitive edge over the competitors in order to
sustain in the market. Also, it can be stated as the major aim of an firm to attract the sector in
which they are operating. A company place itself in market by determining its strengths. A firm
gain competitive advantage over others by providing better products and services. These generic
strategies help an organisation to cope up with the five competitive forces in the market and
perform better than their competitors. There are four strategies identified by Michael porter as
described below:
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Illustration 3: Porter's generic strategy diagram

Cost leadership strategy- It is the common business strategy considered by businesses
trying to gain competitive edge over the competitors. It means that the business is going to
dominate the market in maintaining costs and budgets in one way or other (Sparks, Nykiel and
Jascolt, 2012). This can be useful for Hart's bakery as they wants to increase productivity by
decreasing cost of production and operations of a product. Less cost and improved quality will
tend to attract more customers than the competitors. Through this, Hart's bakery can penetrate
targeted market which is dominated by high cost firms. Ways through which companies can
achieve cost advantages are:
 By improving efficiency of processes,
 Access to low cost raw materials,
 Development of products with efficient production,
 Employing experienced candidate in production process.
Differentiation strategy- It is completely opposite to cost leadership strategy. In this,
Businesses try to take advantage of quality and functionality in penetrating the market.
Companies tries to tell customers that their quality of product is high than their competitors and
that's why their cost is high (Hajli, 2015). Hart's bakery needs to have strong marketing strategies
in order to prove their better quality of product. So, it is necessary for Hart's bakery to develop
such type of products and services. A company should have following strength to adopt this
strategy:
 Well experienced R&D department,
 Skilled staff in development and manufacturing process,
 Strong expertise in sales and marketing department, Brand image in innovated and quality certified products.
Focus strategy- This strategy is based on Divide-Rule. This strategy focus on a narrow
segment within which it tries to accomplish advantage on differentiation or cost. This strategy
emphasizes on the needs of customers to whom firm can serve better services by focusing
entirely. Hart's bakery has focus strategy for enjoying the loyalty of consumers and the loyalty of
customers discourages other organisations to compete. Due to focus on small market, Hart's
bakery's production is low which leads to less bargaining power of suppliers. Focus strategy
further segmented into two types as stated below:
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