Famous Amos is one of the most recognizable cookie brands in the world and its products are positioned as premium quality. Initiated by Wally Amos in 1975, the brand currently belongs to the Kellogg Company and is available in most parts of the world. However, it remains alien to China and this report is dedicated to Famous Amos’ entry into Shanghai. Its products include bite-sized chocolate cookies, sandwiched cookies and muffins that come in various flavors. Apart from that, it offers customized wrapping services at its specialty stores. Parallel with the goals of its parent company, Famous Amos is focused on achieving sustainable growth through the expansion of its operations. It was identified that Famous Amos practices the differentiation, market penetration and market development strategies. To enter the market, it can select to either export its products or entry through acquisition.
Shanghai, as one of the largest metropolitan, serves as the heart of finance and economic activities of China. With a large population and rising income level, it provides many opportunities for Famous Amos to grow its business. Not only is Shanghai culturally and socially diversified, its people are also early adopters and are open to western cultures. Its strong currency and steady stock market performance indicates economic strength which add to its attractiveness. The drawbacks are that its political conditions are slightly instable due to the ongoing process of reformation and its legal structure is still developing.
An analysis on competition level in Shanghai revealed that its main competitors will be Kraft, Mars and Cadbury. Besides that, Famous Amos also faces a threat from Hershey’s should it enters the market. The SWOT analysis was also included to highlight the strength and weaknesses of the brand along with the opportunities and threats poses by the external environment. Listed marketing objectives for the first year mainly revolve around building brand awareness, capturing market share, innovation and establishing an effective distribution network. A few targeted segments were identified, which are the affluent group, the working class, children and students. The characteristics of these segments are discussed in the report.
A marketing plan of is formulated for Famous Amos’ first year in Shanghai. In terms of promotional activities, Famous Amos will engage in heavy advertising, promotions and public relations to build brand awareness, consistent with one of the marketing objectives. Examples of promotional activities are such as distribution of free samples in schools, giving away complementary merchandises and introducing loyalty programs. New flavors such as almond, green tea and red bean will be introduced to suit local taste in to capture market share efficiently. Distribution channels selected such as specialty stores, retailers and convenience stores will provide wide geographical coverage to make its products accessible. An implementation chart is then laid out to highlight the type of marketing activities to be carried out at different periods such as launching of orange-zest topped cookies during the Chinese New Year and so on. Famous Amos does not practice standardized pricing in all its markets, rather it sets different price for each market. As it is a premium brand, it will not slash it prices but rather sell in smaller packages so that it can be afforded by children and students. The prices of its products remain relatively constant throughout the whole year except for special student rate during promotion.
Finally, an evaluation chart is provided followed by a conclusion of whether Famous Amos should enter the Shanghai market. In fact, our research has found more than enough information to support that the entry of Famous Amos into Shanghai is feasible.
2.0 Background Information
The Kellogg Company is the world’s leading cereal and snacks...