Fall 2011, Leadership in a Global Environment - OLG593
Due Date: October 3, 2011
“Pillsbury in India”
The Pillsbury case study was quite interesting. It explained how the Diageo PLC unit of Pillsbury revamps its business by venturing into India (host Country) with a “dying” product in the home country. The four questions asked at the end of the case study will be answered in this paper. Question 1: Identify and describe the roles of the product policy, pricing, promotion, and distribution in Pillsbury’s marketing of flour in India? Marketing mix plays a vital role in helping an international company ensure an overall success and it played a paramount role in Pillsbury’s making of flour in India and should always be considered by international companies before expanding into foreign markets. Pillsbury has a huge market to expand into in India since it “consumes about 69 tons of wheat a year” and India consumes wheat (roti) with “almost every meal.” Pillsbury’s ingenious way of providing flour that is conveniently packaged, contained no artificial preservatives, their focus on freshness and softness, their efforts into research of what the customers want is quite commendable. Because packaged flour sticks to the stomach and is bad for the intestine ((New Delhi housewife), Pillsbury aimed to establish its flour business and then introduce new products to carry its customers up to more lucrative products, which is an excellent business approach. Effective pricing is essential to business success. Pillsbury strategically set its pricing low (although, higher than its competitors pricing) in order to increase its market share; however, over a period of time, the company planned to increase its products, as well as the price range. Also, Pillsbury took into consideration many factors that impacted pricing, namely, competition, culture, income levels, legal requirements, variation of cost of doing business from country to country, differences in transportation charges and tariffs which impacts land prices on goods by country, and differences in distribution costs. Promotion includes all the efforts by the company to enhance the desirability of its products among potential buyers, as well as, motivate the distribution chain to push the product. It is critical for marketing managers to effectively blend and utilize the four elements of the promotion mix (advertising, personal selling, public relations, and sales promotion). Pillsbury created an engaging TV advertisement in an attempt to connect with the market. For respect for the Indian culture, the Doughboy’s pressing of his palms together and bowing in the traditional Indian greeting and that he spoke six regional languages is another excellent business strategy. Distribution is very important because the company must determine an effective and efficient way to transport its goods from one point to the other. The choice of mode clearly depends upon the trade-off between time, money, and value to the customer. In India, Pillsbury could reasonably use the train or trucks since it is reasonably inexpensive and chose to produce their wheat locally to reduce cost, provide freshness to its customers, and maintain a reliable inventory. Importing raw materials by air would not be a practical mode for efficiency because it is too expensive. Pillsbury realizes these and that is why they chose to produce locally after investing in an “18 months” study of trying “to decode Indian wheat.”
Question 2: Did Pillsbury customize or standardize each of the four Ps?
It is very important for any global organization to perform an analysis to determine whether the four Ps should be customized or standardized. SWOT analysis is one of the tools that an organization may utilize for this study. Pillsbury’s analysis was evaluated and based on their results, customized the marketing mix as they ventured into India.
I believe that Pillsbury used the...