Kroger's International Marketing Management: UK Market Entry Strategy

This report provides a comprehensive analysis of Kroger's potential for international expansion, specifically focusing on the UK retail market. The report begins with an introduction to Kroger and the impact of globalization on its operations. It then delves into market research to identify opportunities in the UK, including the impact of corporate tax reductions and the growing trend of online shopping. The report also examines customer behavior towards Kroger's competitors, highlighting opportunities to capture market share by catering to diverse economic classes and offering enhanced digital services. A detailed marketing strategy is proposed, emphasizing the use of both traditional and digital marketing channels, including social media, online platforms, and marketing metrics analysis. The conclusion summarizes the findings, recommending Kroger's expansion into the UK market based on the identified opportunities and proposed strategies. The report highlights the importance of understanding consumer behavior and adapting marketing strategies to effectively compete in the UK's dynamic retail landscape.

International Marketing
Management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Evolution of Kroger with Globalisation and Global Trends That Can Affect its Operations.....3
Market Research to Identify Opportunities.................................................................................4
Customer Behaviour Towards Kroger’s Competitors and Resulting Opportunities...................5
Marketing Strategy......................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Business organisation operating in any industry or sector inevitably need to enter global
markets as they provide the business organisation with immense opportunities to expand and
grow their business functions, diversify their operations, increase their customer base, market
share, profitability and productivity in the consumer markets (Eriksen, 2018). This report
assesses the global expansion efforts of The Kroger Company, which is an American retailer,
founded in 1883, an astonishing 137 years ago, operating from its headquarters in Ohio, USA.
Through its continued operations in the USA’ retail markets, Kroger has grown on to become the
second largest retail business in the USA and fifth largest retailer in the entire world.
MAIN BODY
Evolution of Kroger with Globalisation and Global Trends That Can Affect its Operations
Globalisation is the process through which foreign business organisations grow and
expand their operations by starting business in new countries and markets in order to diversify
their operations and increase their existing customer base, market share, profitability and
productivity. Globalisation has had immense impact on the profitability and productivity of
Kroger in the retail markets of USA and has made Kroger business organisation and its products
evolve as a direct result. Because of globalisation in the retail markets of USA, new retail
industries have started their operations, which has had a direct effect on the operations of Kroger
as the inherent competition in the retail industries has increased tremendously (Martell, 2016).
This has also resulted in an increase in consumer’s bargaining power, as they now have great
choice in terms of which retail business to choose from amongst the various businesses operating
within the industry, based on their preferences, convenience and prices charged by these
businesses in the retail markets (Rodrik, 2018). This increased competition in the retail markets
of USA has made the operations of Kroger evolve as a direct result, with now Kroger placing
greater focus on their pricing strategies and consumer satisfaction levels, in order to retain their
existing customer base and service them effectively and to keep the new competition in USA’s
retail industry from stealing into their market share and customer base. As a direct result of

globalisation Kroger’s leadership and management have also evaluated global markets to be
effective form of expansion as they provide Kroger access to increase their customer base,
productivity and profitability which is not present in USA’s retail markets.
There are numerous global trends that can have an impact on the products and services
provided by Kroger in the retail markets. The most significant global trend to impact the
operations, profitability and productivity of Kroger in the next 5 years seems to be the social and
consumer trend of online shopping. In the last few years, with the widespread adoption of the
internet and the increased number of ecommerce businesses that have started their operations to
service these customers, people of the world are increasing choosing to conduct their shopping
operations exclusively online through these ecommerce websites and applications. This trend
appears to be increasing as the number of online users is increasing dramatically, with increasing
customers now choosing to shop online (Stiglitz, 2017). This can have a significant impact on
the profitability and productivity of Kroger in the next 5 years with the impact being positive or
negative for Kroger now depending on the kind of services Kroger provides to its online
customers in the next 5 years. Advancement in technologies can also have an immense impact on
the productivity and profitability of Kroger and Kroger administration and leadership is
recommended to keep a keen eye on all technological advancements in the next 5 years which
can improve their operational performance and efficiency in the retail markets.
Market Research to Identify Opportunities
Kroger can effectively diversify their existing operations and increase their market share,
customer base, productivity and profitability by expanding their operation to the global markets
of UK. Expanding their operations to the retail markets of UK would effectively allow Kroger to
increase their existing customer base and acquire new customer who can be serviced effectively
allowing Kroger to increase their productivity and profitability (Benson, Hirst and Beresford,
2018). This is because there exist numerous opportunities for Kroger in the UK’s retail markets.
The UK government has recently made an announcement about the reduction in the
corporate taxes levied on a business organisation’s profits from 19% to 18% which is to be
applied from April 2020 onwards. Not only is the reduction in the corporate tax of UK a great
opportunity for Kroger to increase its profitability, expanding into UK’s retail markets would
also be immensely profitable for Kroger as the corporate tax in the USA which is also levied on a

business’s profits is 21% (Aguzzoni and et.al., 2016). This means that if Kroger can service the
same or even less number consumers in the retail markets of UK, it can effectively gain greater
profits from this expansion than it does in the USA, as it would have to pay the UK government
considerably less financial amount through the corporate tax than it does for its current
operations in the USA.
The retail markets of UK are also experiencing the consumer trend by which increasing
number of consumers are now choosing to conduct their shopping operations digitally, though
the number and quality of ecommerce services available to them are not as advanced as that
present in the USA’s retail markets. This also provides Kroger with increased opportunity to
enhance their customer base through online digital stores which would help Kroger to effectively
capture an uncaptured market and tremendously increase their profitability and productivity in
the retail markets of UK (Thompson and McLarney, 2017). As Kroger is such a large business
organisation, it can effectively make use of the principle of economies of scale for all of their
operations to drive low the cost of their products, further providing them with opportunities to
increase their customer base and productivity.
The majority of businesses in UK’s retail markets also operate using old operational
equipment and dated technologies. This also presents Kroger with great opportunities to increase
their profitability and productivity in the UK’s retail markets as their operations should invest
into new operational manufacturing technological advancements that will allow Kroger to
operate with increased performance and efficiency than their competitors in the UK, providing
Kroger with a competitive advantage in the retail markets of UK and increasing their overall
productivity and profitability.
Customer Behaviour Towards Kroger’s Competitors and Resulting Opportunities
The current retail businesses of UK observe various types of behaviours from different
retail customers in the UK’s population. Customers belonging to the lower economic classes of
the UK’s population effectively ignore many of the retail businesses which exclusively service to
the middle and higher sections of the economy, with them exclusively choosing retail businesses
that operate solely on a lower cost model. While the middle and upper classes of the society
largely ignore the operations of retail businesses that aim to serve the lower classes of UK’s
economy as the quality and range of products these retail businesses operating on a cost model

offer to their customers is quite less when compared to the other retail business in the UK’s retail
markets (Kang and Gong, 2019). This has effectively created a divide in the customer behaviour
of UK’s customers in the retail markets and presents Kroger with immense opportunities to grow
and expand their operations by servicing all classes of UK’s population at a single venue or
store. Owing to their large business operations and reach, Kroger can make use of the principle
of economies of scale to effectively decrease the prices of their manufactured goods and products
to cater to the lower economic classes of the UK’s population while providing them with
increased quality and range of products that their competitors simply cannot hope to compete
with, as they operate of limited scale when compared to Kroger. Kroger can also make use of
economies of scale in their logistics and distribution operations to further decrease the price of
all their goods and products allowing Kroger to service the middle and higher economic classes
of UK with competitively priced commodities in the retail markets of UK (Teller and et.al.,
2018). Servicing all three economic classes of the UK’s population would also allow Kroger to
effectively compete in the retail markets of UK as other businesses in the retail industries cannot
service all three sections of UK’s economy in an effective and efficient manner.
The digital behaviour of consumers in the retail markets of the UK also presents Kroger
with increased opportunities to attract them towards their own operations. The competitor digital
retail businesses of Kroger do not provide their customers with functionalities such as
schedulable deliveries, dynamic digital tracking of their shipment and reimbursement options
should the delivery get late or damaged, even though the consumers have been asking for such
services (Ramanathan and et.al., 2017). Kroger can effectively capture the consumers of their
competitors if they pay attention to the consumer behaviours and provide them with these
functionalities which their competitors do not.
Marketing Strategy
The primary aim of Kroger’s marketing strategy for their operations in the retail markets
of UK should be to promote and advertise their services to as large an audience as possible
within the prescribed budget allowance, as this would effectively attract a great number of
consumer to the operations of Kroger in the UK’s retail markets. The marketing strategy of
Kroger must make use of both traditional and digital channels of marketing so that they would be
able to promote and advertise the Kroger’s products and services to a very large section of the

population. Kroger’s marketing strategy must make use of marketing tools provided by the
digital marketing channels such as the various social media platforms, online websites and
smartphone applications (Armstrong and et.al., 2018). Using these digital marketing tools would
allow Kroger to market their products and goods to a very large section of the UK’s population
at significantly less costs incurred through digital means and would also allow Kroger to
effectively engage and interact with their consumers with interesting content which have an
immensely positive impact on the productivity and profitability of Kroger in the retail markets of
UK. Kroger’s marketing strategy should also include the use of external digital marketing
monitoring software to assess and analyse the performance of their digital marketing operations
such as Google Analytics and Hootsuite., use of which can effectively provide Kroger’s
marketers with various marketing metrics such as the number of consumers they marketed to
through their digital operations, time spent per customer on their marketing content, cost of
marketing to each single consumer etc. (Palmatier, 2018). Analysis of these recorded marketing
metrics by Kroger’s marketers will effectively allow them to gain insight into the performance of
their digital marketing operations and allow for their marketers to implement necessary changes
to their marketing strategies to that the performance of their digital marketing operations can
effectively increase and greater number of consumers in the retail markets of UK can be
effectively marketed to, resulting in increased productivity and profitability of Kroger (Zhu and
Gao, 2019). In addition, Kroger should also make use of traditional tools of marketing as
provided by the traditional marketing channels so that customers that do not have access to the
internet can also be effectively marketed to. These traditional marketing tools include magazines,
TV and radio commercials, newspapers, billboards, sponsorships etc., which can effectively
allow Kroger to market to a very large section of the UK’s population.
CONCLUSION
Based on the findings of the report, it can be concluded that Kroger can effectively
expand their business operations to the retail markets of UK if it takes into consideration the
factors present in the UK that can impact their operations along with the opportunities present in
the markets. This report assesses how Kroger has evolved with globalisation and identifies trends
which can affect its operations in the next 5 years. Then the report conducts market research to
evaluate the opportunities for Kroger to make use of in UK markets. The report also assesses UK

customer’s behaviour towards Kroger’s competitors and how Kroger can make use of
opportunities this presents. Finally, the report develops a marketing strategy so that Kroger can
exploit identified opportunities in UK markets.

REFERENCES
Books and Journals
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grocery retail market. Recent Advances in Retailing and Services Science.
Eriksen, T.H., 2018. Globalization. In Handbook of Political Anthropology. Edward Elgar
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Kang, M. and Gong, T., 2019. Dysfunctional customer behavior: conceptualization and empirical
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Martell, L., 2016. The sociology of globalization. John Wiley & Sons.
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Zhu, G. and Gao, X., 2019. Precision retail marketing strategy based on digital marketing model.
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