int. mkt strategy- haldiram, india

International Marketing

International Marketing- 7th Question

International Marketing- Haldiram

Submitted to Prof. Rekha

Submitted by Hitesh Goyal

Batch PGPRM-9

Reg. No. BLR 0903071001

Word 2380


Table of Contents

Overview of the Indian food industry:.........................................................................................2

Overview of the organization:......................................................................................................3

Problem Formulation:..................................................................................................................3

Literature review and Relation of this topic to International Marketing:....................................4

International marketing issue faced by Haldiram and how it overcame by these barriers:.........6

Political and Legal rules and regulations:....................................................................................6

Conclusion:......................................................................................................................................7

Reference:........................................................................................................................................8



Introduction:

Over many decades, due to rapidly change in resources, logistics or transportation services and

technology, many multinational organization across the world have established closer contacts

with each other to achieve the Economic of Scales and improve the relationship among

countries. They establish their production and operation units in other countries to use their

natural resources which help to increase the productivity and profit. When an organization

directly or indirectly provides its product or service to consumers in more than one nation and to

make it successful in that particular market it does promotion activities, logistic management,

pricing and many other activities called International Marketing. (Cateora, Graham & Salwan,

2008) If an organization wants to make its product or service successful in a particular country’s

market, it should do proper research about their culture, economical, social, environmental,

political and legal policies or in other word PESTEL analysis of that country then only it can

sustain in market for long time. To complete this assignment I have chosen ‘Haldiram’s Foods

India Limited’ which is a small scale food chain organization in India.

Overview of the Indian food industry:

The Indian food industry 2nd largest producer of food and grocery commodities after China,

contributes 1.5% share in total world trade and 9% in Indian GDP. It is also ranked on 5 th

position in term of consumption and growth. (Ministry of Food Processing Industry Government

of India, 2008) But still there is no even a single big multinational food chain in India like Pizza

Hut, Dominos, KFC and McDonald. Majority of the turnover comes from unorganized food and

grocery companies.



Overview of the organization:

It started its first store in Bikaner, a city of Rajasthan state in 1937. Due to its superior quality of

service and food and word of mouth soon it became famous and started to make huge profit.

During 1980s, it started to expend the market and opened new stores in Delhi, Nagpur and

Kolkata. It deals with typically Indian foods such as sweets, namkeens, cookies, beverage like

sherbet, lemon water and many other things. In 1994, Haldiram achieved the biggest

achievements of their career, it entered in USA market. After that it expended its operation in

UK, Netherlands, Italy, Spain and many other countries. There were many time it fall in

controversy and stopped to enter in a country due to legal rules and regulations. They also faced

several problems because of vary in culture, lifestyle, environment and so on but soon they

amend their mistake and now they are making huge profit there. (HALDIRAM'S GROUP, 2009)

Problem Formulation :

Whenever any big or small scale organization goes for international marketing or multinational

operations, there are several macro environmental factors which a company cannot have control

but by the help of effective strategy and study or analysis of that particular country can help the

company to enter in market successfully and run its business for long time. If a company does

not do proper research about a country where it wants to enter then it can become a big

controversy for an example if we talk about KFC and McDonald, they came in India in 1996

with their core products such as beef burger and chicken burger, they were thrown out by public

because according to Hindu religion, it is crime to kill cows and secondly majority of people are

vegetarian in India. They came back in India in 2002 with vegetarian dishes to target the Indian

market and now they are making huge profit. It shows that how can religion, social culture and



belief affect the business. So, in this report several issues are being studied such as how an

Indian SME ‘Haldiram’s Foods India Limited’ entered in numerous countries mainly in US and

European countries like UK, Italy and Netherlands, what were the several issues faced by the

company in term of legal policies like food quality, it should be approved by the government,

religion, beliefs or mindset of people such as, environment, company or brand image and many

other factors.

These all factors play a vital role for any organization. If an organization underestimate them

then it will create difficulty for a company firstly to enter in that country and if they enter then to

sustain their business over there. If we talk about culture in term of value, language, religion,

these factors are not in any two countries. If one country religion is to kill animals (cow in

Muslim countries) may be it is not accepted by other country’s people (India). Every part of our

life affects by culture such as how we spend and how we consume. (Kotler & Keller, 2009)

Literature review and Relation of this topic to International Marketing:

To find out what is the relationship of this particular topic to International Marketing, firstly we

should understand what the Small and Medium Enterprise (SME) is, what the Marketing is and

similarity and difference between Marketing and International Marketing?

Marketing is the set of some process and functional task of an organization for creating demand,

delivering the value, communicate with customer and providing good products and service to

customer to fulfill their demand and managing the good relationship with customers in a way

which benefits the organization and satisfy the customers and its stakeholders. (Kotler & Keller,

2009) It is all about creating and identifies the customers’ need and demand and meeting them

profitably. International Marketing is also same but the main difference is a company plan, price,



promote and provide service and goods to customers in more than one nations to earn profit.

(Cateora, Graham & Salwan, 2008) Over many decades due to increase the competition and

scarcity of resources most of the companies find out and realize that to make more profit and

increase the productivity going global is very important. But to enter in global market and sustain

there for long time, a company must have effective global market strategy to access the global

opportunity, logistic management, promotion and keep track on operations. Working globally or

internationally means there are different type of legal policies, politics scenario, culture,

language, environment, religion and technology. (Kephart, 2007) So, an organization should do

proper research such as PESTEL analysis, Porter’s five forces and make good business strategy

to enter in that market and set their operation.

Small and Medium Enterprise (SME) are those organization which got its most of working

capital by its owner. Mostly it is owned by one or few people. They have small market share and

the government also help them to grow in term of providing them some subsidy and discount

such as export insurance and trade discount. These organizations internationalize because of

local competition, to find niche target market and improve their productivity. (Cateora, Graham

& Salwan, 2008) If we talk about Haldiram’s Foods India limited, due to competition by big

companies such as Britannia, ITC Dabur and opportunity in other countries where there are a

vast number of Non Residence Indians are living, to target them it entered in USA and European

countries. It also faced several problems in terms of legal policies, culture barriers and problem

related to environment.



International marketing issue faced by Haldiram and how it overcame by these barriers:

After achieving success Haldiram’s Foods India limited expended its operation in USA, UK,

Netherlands, Italy, Spain and many other countries to target Non Residence Indians. There were

many time it fall in controversy and stopped to enter in a country due to legal rules and

regulations. They also faced several problems because of vary in culture, lifestyle, environment

and so on but soon they amend their mistake and now they are making huge profit there. It is

growing at rate of 40% in international market and its export contributes 12% in total turnover. It

is not because Indian people are consuming their products but also their food is finding

worldwide consumers. (HALDIRAM'S GROUP, 2009) Some of the issues faced by Haldiram

when they enter in foreign market:

Political and Legal rules and regulations:

Every country has its own legal and trade policy for example how much is FDI allowed in that

particular industry, trade barriers in term of taxes, quota, the government stability and local

communities. If a company does not do proper study about the political and legal policies of a

country then it can be a reason of restriction and close down their operation from there. If we talk

about food industry in USA and European countries every multinational company who trade in

food and grocery commodities have to approved their food quality by US Food and Drug

Administration (FDA) and Safety Act, UK. When Haldiram’s Foods India limited entered in

USA and European countries, their food quality did not match with quality parameter of FDA

because of spending huge time in logistics and transportation in India and there were not good

laboratory to check food quality and no good cold warehouse to stock the food. So huge

consignment of their food were return by USA and EU countries such as UK, France,


http://www.fda.gov/

http://www.fda.gov/


Netherlands and Italy and they were not allowed to setup the business which result them a huge

loss. But after that they spend a huge amount to setup their own laboratory and in-house testing

facilities for aflatoxin, pesticides, Sudan color and other microbiological tests. It has state of the

art technology from Italy and every operation has done according to rule and regulation of

international norms of HACCP. It got HACCP certification by DNV, Netherlands and now it is

also member of International Association VIZ, European Snack and Food Association (ESFA)

and Association of Amusement Parks and Attraction Alexandra, USA. It also got help by the

Indian government such as 2% trade discount on normal export rate of 12%. Now it is running

their business successfully in USA and European countries and it got many awards such as

International Food award from TROFEO International Alimentation of Barcelona, Spain in

2000, APEDA Export award, Brand Equity award, International award for Food and Beverage

by the Indian government. (HALDIRAM'S GROUP, 2009) So it shows that how legal policy of a

country can affect the business and if the organization follow all policy then it helps to establish

their business in any country.

Culture:

Culture is also plays very vital role for any company because every country has its own culture,

beliefs and religion. If a company does not know the culture of a country then it would difficult

for them to do business there for long time such as when McDonald and KFC entered in India,

they entered with same product such as beef burger and most of the product which they were

offering were non vegetarian which they are using in every country. They did not do any product

customization. Due to this problem they were thrown out from India by public but then they did

product customization and entered in India and now doing their business successfully. It



happened with Haldiram. When it was doing business in western countries they did not do any

product customization because majority of people who living there are non vegetarian and also

they believe in eating from McDonald, KFC, Dominoes and Pizza Hutt. If we talk about product,

Haldiram entered with same product which they are using in India such as Samosa, Pav-Bhaji

and other. These all thing need many stuff to prepare. People did not prefer their food due to

spicy, oily and typically Indian image. They made loss in starting because their target market

was small and western people did not like but when they starting to offer burger and other fast

food, people started to eat and now their other product are also more famous than burger and

pizza in UK and USA. (Haldiram Group- Seeking for the right marketing mix, 2007)

Conclusion:

After analyzing this case and I would like to say that if an organization does not study foreign

market carefully such as political, legal, technological, environmental and cultural or social

(PESTEL) factors then it is really difficult to sustain in that particular market for a long time but

if an organization does proper research and make effective global strategy then it can make huge

profit in that market. It also help me to make clear International Marketing concept which I have

learnt in class such as what is SME, why they go for internationalize, what is difference and

common points between marketing and international marketing.



Bibliography:

Cateora, P. C., Sullivan-Mort, G., D’Souza, C., Taghian, M., Weerawardena, J. & Graham, J. (2009). International Marketing. McGraw-Hill.

Cateora, P. R., Graham, J. L. & Salwan, P. (2008). International Marketing (13 th ed.). Tata McGraw-Hill.

Kotler, P. & Keller, K. (2008).Marketing Management (13th ed).New Delhi: Prentice Hall of India

Onkvisit, S. , John, J. (2000). International marketing “analysis & strategy” (3 rd edition). Dorling Kindersley private limited. New Delhi

BATEMAN, J. (2000). Taking On the World. Billboard, 112(11). Retrieved on May 2000 from Business Source Premier Database:http://web.ebscohost.com/ehost/detail?vid=2&hid=5&sid=c3f58320-9d86-4dbf-a9c7-4ee123aa67d9%40sessionmgr13&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh&AN=2863203#db=buh&AN=2863203

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Haldiram’s journey (n.d.). Retrieved on Dec. 2009 from Haldirams:

http://www.haldirams.com/

Haldiram’s achievement (n.d.). Retrieved on Dec. 2009 from Haldirams:

http://www.haldiramusa.com/xcart/home.php

Halfhill, D., Halfhill, S., & Gillingham, D. (2005). International Marketing: A Growing Importance. Journal of the Academy of Marketing Science, 5(4), 41-44. Retrieved from Business Source Premier Database:http://web.ebscohost.com/ehost/detail?vid=5&hid=5&sid=471e8b71-8394-492b-8787-d097f27b807c%40sessionmgr13&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh&AN=4642482#db=buh&AN=4642482#db=buh&AN=4642482


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http://www.haldirams.com/

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