Zorbas Bakery: Expanding Bread and Baked Goods in Russia Market

This report examines the international marketing opportunities and challenges for Zorbas Bakery, a Cyprus-based company, as it seeks to expand its bread and baked goods business into the Russian market. The report begins with an introduction to international marketing and the rationale for Zorbas's expansion into Russia, highlighting the demand for bakery products. It then provides an overview of Zorbas and its current operations. The core of the report involves a detailed market analysis of Russia, focusing on its economy, culture, GDP, growth rate, import/export data, and consumer demand. Specific attention is given to Moscow as a key location for market entry. The report also assesses the competitive landscape, identifying key players in the Russian bakery market. A cultural profile is provided, examining aspects like people interaction, dress code, norms, and languages to understand consumer behavior. Based on the analysis, the report recommends a comprehensive marketing mix strategy, including promotion, product, place, and price strategies, along with Porter's generic differentiation strategy. The report also suggests a joint venture entry mode. The conclusion summarizes the key findings, reiterating the opportunities for Zorbas in Russia while acknowledging the challenges, and emphasizes the importance of implementing the recommended strategies for success.

International Marketing

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Introduction
International marketing is the applications of marketing principles which helps to
satisfy demand and needs of different people across the national borders. International
marketing is helps to undertake the marketing activities in more than one nation (Business
jargons, 2018). In this report, the discussion is made on the topic of “Integrated marketing”.
In this report, Zorbas has been taken into consideration to analyse the environment. Zorbas
and Sons Ltd. is a coffee bakery company which was founded in Athienou. It achieves the
high success in the market of Cyprus but now it wants to expand the business in Russia
market.
In the beginning g of this report, the external analysis will be done in order to expand
the business with the effective strategies as per the market condition. After that, cultural
analysis of the Russia market will also be analysed in order to attain the high success in
Russia market. At the end, strategies will be recommended on the basis of analysis of
environment.
Overview of the organisation
Zorbas and Sons is a bakery company that produce and sales the bakery products. The
company achieve the continuous success and get the positive response from consuming
public the company extended in the province of Nicosia. Zorbas Bakeries was listed under
the Cyprus stock market.
The main activity of the company is the production, distribution and sales of
confectionary products and pastries. As per the continuous success, the company expanded
the business from cooked food including production and sales of salads, sandwiches and
pizza which is prepared with the top quality and fresh ingredients. The bread and baked

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goods are the main services that are provided by the company to its consumers. The company
export bakery products in the different countries such as confectioneries desserts, traditional
French breads, pastries and cakes (Zorbas, 2019).
The demand of consumers of Russian people is high and it is biggest market in
Northeastern Europe. The high demand and continuous growth of market is beneficial for the
company that is why; Russian market has been selected to expand the business.
Market profile and Implications
Economy
Russia has an upper-middle income which is mixed and transition economy. Market
reforms in the 1990s privatized much of Russian industry and agriculture. Russia’s vast
geography is an important determinant of its economic activity. The Russia has more than
$460 billion in reserve with the debt level of 29% of the gross domestic product and 15.9
months of import cover (Business Insider, 2019). It has been seen that the economic growth
of the country have low rate of 1.5% approx. The economic growth of the country is slow due
to which the company can face the challenge of financial crisis.
Culture
Russian is the biggest country in the world in terms of territory with a total area of
6601660 sq. miles. In this largest territory, Russia has 190 ethnic groups that follow the
different religion. People use the Russian languages in the large amount and 100 languages
by other employee. The taste of consumer is also depends on the religion of the people which
also become the challenge for company as the demand is fluctuated.
GDP

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Russia’ gross domestic product is grown by 2.7 per cent average in every year. GDP
Annual Growth Rate in Russia is averaged with the 3 per-cent from 1996 until 2018. GDP
per capita income of the country is $10,608 (nominal; 2017). The GDP growth rate of the
country is less which states that the company face the challenge of financial crisis (Trading
Economics, 2019).
(Source: Trading Economics, 2018)
Growth Rate
The growth rate of Russia is relies on the GDP rate of the country. The country is
ranked at the 11th in nominal. It grows with the rate of 1.4% in the year of 2019 (Global Edge,
2018).
Import and Exports
It has been analysed that the total export of the country in the year 2017 is
$359,151,975,199. The import of the country is $ 228,212,749,973. The total balance of
trade is $ $130,939,225,226. The rate of GDP of export of goods and services is 26.04%.

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The rate of GDP of imports of goods and services in the year 2017 is $20.69% (Biz
community, 2018).
Statistic data of consumers demand
It is observed that the consumption of bread per capita per year in Russia is 8.7
million of tones which is come under the highest consumption of the countries. Russia is one
of the leading countries where the high level of per capita consumption with the 61kg/year.
The consumption rate of Russian people is high as compare to Cyprus. It indicates that the
organisation can enter the market and earn the high profit (Global Edge, 2018).
Locations
It has been seen that the Moscow is the best location in Russia for selling the bread.
Industry and Competition
It has been seen that the company expand the business of baker goods in Russia. It
includes breads, pastries, cakes and confectionery products.
States Growth
The increasing demand of consumers towards the bakery helps to grow in the market.
As discussed above, the bakery market in biggest market in Russia. The sales growth of the
countries is 2% annually until the year 2019. Bread and rolls are the best selling products in
the bakery market and it covers 50% market of bakery. It is expected that it grow with the
CAGR of 5.9% in value terms during the 2015-20120 period. As per the report, bakery
market is an ideal market for exporters in terms of entry. The value of imported goods in
Russia is reached at a massive $240 million in 2015. Moscow is the biggest city which is
highly growing in terms of consumer demand (Food-exhibitions, 2018).

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Competitive Landscape
There are top bakery companies in Russia that provide the quality of services to
attract consumers towards its services. The main competitors of the organisation are Grupo
Bimbo, McKee Foods , BreadTalk and GroupHostess Brands. Although, the bakery industry
of Russia market is highly developed and offers variety of product due to which the
competition between the companies are high. The company has to adopt the different strategy
to develop their product new as they expand the business at the international level.
Differentiation strategy and cost leadership strategy helps to gain the competitive advantage
in the market.
Cultural profile and Implications
People Interaction
Russian people are friendlier in behaviour as they met their relatives, and friends in
large number. People of Cyprus meet in less number with the people. In Cyprus, the people
organise the small gathering to meet each other and celebrate their parties. It has been seen
that organisation has to adopt the Russian culture and train the employees according to the
culture of Russia (Every culture, 2018).
Dress Code
It has been seen that the dress codes of the countries are different. The people of
Cyprus prefer to wear covered clothes from their head to toes. In the restaurants and café,
servants also wear full covered uniforms. Russian people more prefers to wear the western
dresses to look smart and expensive dresses to enhance credibility.
Norm

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Russian people believe on collective spirit instead of individualism spirit. Russian
people join the strangers in food dinner rather than eat alone in café and restaurant. People of
Cyprus are little bit narrow minded. The people avoid meeting in public places for meetings
with their relatives.
In Russia, families live in their separate apartments and they are small families with
the single child (Rough guides, 2018). But in Cyprus, there are extended family which is
expected to helps their relatives.
The values and believes are different in both the countries due to which the choice are
also different. The company can face the challenges due to huge cultural difference among
employees.
Languages
Russian is the main languages of the Country. There are many large number of people
speaks English as the second language. There are other 100 languages used by the people in
the today’s world such as Tartar, Bashir, Ukrainian, Mordvin, Chuvash, and Chechen as the
different number of people live at a place. The language used by the people of Cyprus is the
oral mixed variety in early year but now the most of people uses the national language of
Greece and turkey (Commisceo-global, 2018).
Recommendations
Marketing Mix
Promotion Strategy

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From the above analysis, the company requires to promote the product in the Russian
market. It is required for the company to adopt the modern promotion channel such as social
media, television, and websites as the Russian people follow the western culture.
Product Strategy
The company has to adopt the product strategy in order to develop the new product
for variety and also adopt the techniques to improve quality of product. It has to enter the
market with the existing products with high quality to grab the market (Wu, & Li, 2018).
Place Strategy
The company has to analyse the environment before selling the product. As per the
above analysis, it is observed that the demand of consumers of Moscow is high towards
bakery product. That’s why; it is recommended that the company has to expand its business
in Moscow market.
Price Strategy
The company has to adopt the price strategy to gain the competitive advantage. It has
to set the cheap prices while entering the market so, that the large number of attract towards it
(Jackson, & Ahuja, 2016).
Porters generic Strategy
Differentiation strategy
As per the above analysis, it has been seen that the company also provide the similar
nature product to consumer as its competitor provides. According to generic strategy, the
company has to develop the different product as compare to existing competitors of Russian
market.

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Entry Mode
The whole scenario states that the company has to enter the market in the mode of
Joint venture. In joint venture, two companies are getting together for spreading their
business in the different locations or in terms of varieties. The company has to enter the
market in Joint venture form so that the consumers of existing companies are also attracted
towards the product of organisation.
Conclusion
From the above discussion, it is concluded that the Zorbas- the bakery company can
enter the Russian market with the motive to gain the success. The company can faces the
challenges of economic issues and culture difference issue. The people of Russian and
Cyprus have their different values and believes due to which the demand of consumers are
also change. The organisation faces the cross-culture challenges and many others. It is
recommended that the company has to adopt the marketing mix strategy, differentiation
strategy of porters generic and the last is entry of mode of conduct. The company has to enter
the market through joint venture form so; that it can attract large number of consumers
towards its services. It is highly recommended that the organisation has to adopt these
strategies in order to attain the high success in Russian market.

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References
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Biz community. (2018). Global bread and bakery consumption continues to experience
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https://www.bizcommunity.com/Article/1/162/176273.html
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