Introduction

Kraft Heinz is one of the world’s biggest food Corporation in terms of its overall sales volume and
revenue. Heinz, formerly in full H.J. Heinz Company, division and brand of the Kraft Heinz
Company, a major manufacturer of processed foods and beverages that was formed by the 2015
merger of H.J. Heinz Holding Corporation and Kraft Foods Group. Heinz is known for its “57
Varieties” slogan, which was devised in 1896, though it marketed more than 5,700 products in
the early 21st century. Heinz’s headquarters are in Pittsburgh.

A corporate mission statement highlights the main activities of a business and how it plans to
advance its growth. On the other hand, a corporate vision statement sets the developmental path
for the company. In this case analysis of Kraft Heinz, the mission statement indicates the desires
of the company and its commitment to do everything to lead other companies in the food and
beverage industry.

Heinz Mission Statement

Kraft Heinz’s mission statement is “to be the BEST food company in the world.” The statement
shows the determination of Kraft Heinz to be the pacesetter in all aspects including quality
products and customer service. The company is motivated to offer the best services, and this
explains why it has drastically grown into the third biggest entity in the U.S within a period of 4
years ever since its merger. The statement has these points:

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 1. Be the best

2. Improving communities

3. In the world

Vision Statement

Although Kraft Heinz does not have a published vision statement, the operations of the company
indicate that it strives to set a course in making Kraft Heinz the premier food and Beverage
Company. The strategies adopted by the management, including a partnership with progressive
investors and constant enhancement of its corporate governance are a reflection of how this
company seeks to achieve its vision.

Core Values

Kraft Heinz’s core values comprise “customer first, innovation, integrity, ownership, quality.”
They are the basic principles that ensure everyone in this company contributes to the overall
growth of the corporation and the creation of a positive culture. The focus on customers, honesty
and call for all stakeholders to be innovative is exactly what has led to the high-quality products
and services at Kraft Heinz.

Value Proposition

Kraft Heinz provides value to its customers in the following ways:

 Its reputation and industry standing, with the Company established as one of the largest
consumer goods manufacturers and distributors in the world, with a long-standing reputation for
reliably producing high-quality products;

 Its broad product and brand portfolio, with the Company manufacturing and distributing a
broad range of grocery products, including condiments and sauces, cheese and dairy, meals,
meats, refreshment beverages, and coffee, under various high-profile brands, such as Velveeta,
Oscar Meyer, and Philadelphia;

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 Its international sales and marketing reach, with the Company serving a large domestic
customer base in the US, as well as an extensive network of customers across Latin America,
Europe, Asia Pacific, the Middle East, and Africa;

 Its extensive manufacturing and distribution infrastructure, with the Company owning and
operating its own network of production and distribution facilities, that enables the Company to
serve customers quickly and efficiently; and

 Its research and development activities, with the Company committed to innovation, dedicated
a significant portion of its funds each year to research and development activities.

Customer Relationships
Kraft Heinz provides ongoing support to its customers, who are able to contact the Company’s
various departments directly over the phone, via email, or through an online contact form,
enabling customers to access personalized support. The Company also provides a range of online
resources, largely directed at consumers, including recipes, and media releases and coverage.

Additionally, Kraft Heinz and its various brands operate a number of social media accounts –
including with LinkedIn, Facebook, and Twitter – through which it can interact directly with
customers and issue updates on corporate activities.

Key Activities
Kraft Heinz controls an extensive brand portfolio, including popular brands such as Heinz, Kraft,
Oscar Mayer, Planters, Philadelphia, Velveeta, Lunchables, Maxwell House, Capri Sun and Ore-
Ida. The Company's products are sold through its own sales organizations and through
independent brokers, agents, distributors, wholesalers, retailers, and foodservice companies.

Key Partners
Kraft Heinz works closely with a network of partners that support the Company’s manufacturing
and distribution activities. These partners can be categorised broadly as follows:

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 Supplier and Vendor Partners, comprising suppliers of materials, commodities, equipment,
and ingredients that are used in the Company’s manufacturing processes, as well as suppliers of
services and technologies that are utilised across the Company more broadly;

 Channel and Distribution Partners, comprising the Company’s network of intermediaries,

including brokers, agents, and distributors, that assist the Company in extending its sales and
marketing reach, particularly in overseas jurisdictions;

 Community and Social Partners, comprising various non-profits and charitable organisations,
with which the Company collaborates on social and community projects around the world; and

 Strategic and Alliance Partners, comprising various market leading companies across multiple
sectors with which the Company shares certain resources and works on joint marketing and
branding projects.

Key Resources
Kraft Heinz’s key resources are its brands and intellectual properties, its manufacturing and
processing infrastructure, its suppliers and supply chain, its IT and communications
infrastructure, its sales and distribution channels – including its network of intermediaries, and
its personnel.

Kraft Heinz owns a number of intellectual properties, including trademarks and patents, around
the world. The Company own numerous patents and patent licenses worldwide that the Company
considers to be key to its operations as well as a number of trademarks and brands the protection
of which remains important. These brands include Kraft, Heinz, Oscar Meyer, Philadelphia,
Maxwell House, Tassimo, Capri-Sun, Kool-Aid, and Cracker Barrel.

Kraft Heinz owns and or leases a number physical properties across the US, which are key to the
Company’s activities. This notably includes the Company’s network of 86 manufacturing and
processing facilities across the Americas, Europe, Asia Pacific, Africa, and the Middle East.

Cost Structure
Kraft Heinz incurs costs in relation to the procurement of commodities and supplies, the
operation of research and development projects, the operation of its manufacturing and

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 processing facilities, the maintenance of its IT and communications infrastructure, the operation
of its sales and distribution infrastructure, the implementation of marketing and advertising
campaigns, the management of its partnerships, and the retention of its personnel.

For the year ending 3rd January 2016, Kraft Heinz recorded cost of goods sold in the amount of
$18.30 billion, and selling, general, and administrative costs in the amount of $4.61 billion. The
Company’s research and development costs for the year totalled $105 million.

Revenue Streams
Kraft Heinz generates revenue through the manufacture and sale of various grocery products
across more than 190 countries and territories across the world. These products are organized
into five categories:

 Condiments and Sauces;

 Cheese and Dairy;

 Ambient Meals;

 Frozen and Chilled Meals; and

 Infant and Nutrition.

Marketing Mix of Heinz

Heinz is an American origin corporation that is associated with food processing industry. It was
founded in the year 1869 by its founder Henry J. Heinz. In the United States, it is ranked at first, a
position for its core product Ketchup and occupies nearly 50% of the market share. In the year
2013 Heinz was purchased by 3G Capital and Berkshire Hathaway for 23 billion dollars and in the
year 2015, it once again merged with Kraft to become Kraft Heinz Company. Currently, this food
company is fifth largest in the global market. Some of its competitors in consumer market are as
follows-

 ADM
 Tyson Foods

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  ConAgra Foods
 Campbell Soup
 Del Monte Foods
 Nestle Ltd
 Unilever

Product in the Marketing Mix Of Heinz:

Heinz is an international brand which started its product kit with Tomato Ketchup. Later in year
1914, it started manufacturing Salad Cream and in year 1930 it offered its customers baby food
and ready-to-serve soups, which became top sellers.

In Australia its product portfolio includes Canned-Baked Beans and Spaghetti made in tomato
sauces, ready-to-eat soups, condensed soup and canned soup. In Canada, its portfolio includes
ketchup, mustard, tomato juice, vinegar, barbecue sauces, baby food, beans, canned pastas, soups,
gravies and pasta sauces. In India Heinz Ketchup is available in two variants Heinz Tomato Chilli
Sauce and Heinz Tomato Ketchup.

The company has acquired Glaxo India and now its product kit in India also includes Sampriti
Ghee, Glucon C, Glucon D and Complan. In Indonesia it manufactures syrups, Juices, condiments
and sauces and in the United Kingdom it markets Heinz Baked Beans and baby milk.
Heinz products are available in bottles and sachets of various sizes to
suit individual consumer needs.

Products (Key Ingredients for Success)

Every Heinz product is designed to enhance your culinary creativity, variety and profitability.AA
wide variety of heinz food are as follows,

 Ketchup
 Condiments
 Sauces
 Dressings
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  Mayo
 Dips
 Tomato Juice
 Tomato products
 Syrup & toppings
 Soup & Entrées
 Other

Place in the Marketing Mix of Heinz:

Heinz is one of the most established brands in food and beverage industry and has its presence
spread over several countries in the world. Its food products are manufactured in several facilities
located on six continents. These end products are marketed in nearly two hundred countries spread
all over the globe. Heinz has its headquarters base at Pittsburgh, Pennsylvania in the United States.
Heinz has factories in South Carolina, Oregon, Idaho, Florida and California in United States, Mill
Park and Echuca in Australia, Ontario and Montreal in Canada, Indonesia, Netherlands,
India, China and the United Kingdom. Heinz has strong Research & Development facilities that
are located in several places.

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It has a widespread distribution network that helps in quick and efficient workings.
Its channel includes services of manufacturing plants and from there to wholesalers and then to
retailers. Consumers can easily purchase Heinz products from local markets, grocery store,
convenient store, discount store, hypermarkets and supermarkets.

Price in the Marketing Mix of Heinz:

Heinz faces tough competition from rival companies and hence has adopted competitive
pricing policy by keeping its price range in similar brackets as that of its competitors. It has set up
prices after evaluating various factors like demand from consumers and the price they are willing
to pay. Heinz has also taken up penetration strategy as it wants to increase its market share. The
brand has adopted a reasonable pricing policy and has assured its customers of value-based
strategy because it is offering quality products at affordable rates. Consumers are finding these
prices within their means and hence have continued to maintain its brand loyalty.

Promotions in the Marketing Mix of Heinz:

Heinz has adopted several marketing policies to create positive brand awareness amongst
consumers. It has conducted a thorough research and its promotional campaign is focused on
reaching new customer base by adopting an aggressive strategy. Heinz launched several sampling
campaigns to make the consumers aware about its different products.

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 It has used every possible medium like electronic, social and print to its advantage. Its commercials
are telecast via different television channels and are aired on several radio stations. Hoardings are
placed at strategic and crowded areas to gain maximum exposure. Ads are displayed through
posters, pamphlets, magazines and newspapers. Heinz has a strong social exposure through
platforms like Facebook, YouTube and Twitter.

Heinz SWOT Analysis / Matrix

The Kraft Heinz is one of the leading firms in its industry. Kraft Heinz maintains its prominent
position in market by critically analyzing and reviewing the SWOT analysis. SWOT analysis an
immensenly interactive process and requires effective coordination among various departments
within the company such as – marketing, finance, operations, management information systems
and strategic planning.
The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the
managers of the Kraft Heinz to develop four types of strategies:
 SO (strengths-opportunities) Strategies
 WO (weaknesses-opportunities) Strategies
 ST (strengths-threats) Strategies
 WT (weaknesses-threats) Strategies

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 SWOT Matrix Strategies Objective

The main purpose of SWOT matrix is to identify the strategies that a firm can utilize to exploit
external opportunities, counter threats, and build on & protect Kraft Heinz strengths, and
eradicate its weaknesses.

Kraft Heinz SWOT Analysis

Strengths of Kraft Heinz – Internal Strategic Factors

As one of the leading firms in its industry, Kraft Heinz has numerous strengths that enable it to
thrive in the market place. These strengths not only help it to protect the market share in existing
markets but also help in penetrating new markets. Some of the strengths of Kraft Heinz are –
 Good Returns on Capital Expenditure – Kraft Heinz is relatively successful at execution of new
projects and generated good returns on capital expenditure by building new revenue streams.
 Automation of activities brought consistency of quality to Kraft Heinz products and has enabled
the company to scale up and scale down based on the demand conditions in the market.
 Highly skilled workforce through successful training and learning programs. Kraft Heinz is
investing huge resources in training and development of its employees resulting in a workforce
that is not only highly skilled but also motivated to achieve more.
 Strong Brand Portfolio – Over the years Kraft Heinz has invested in building a strong brand
portfolio. The SWOT analysis of Kraft Heinz just underlines this fact. This brand portfolio can
be extremely useful if the organization wants to expand into new product categories.
 High level of customer satisfaction – the company with its dedicated customer relationship
management department has able to achieve a high level of customer satisfaction among present
customers and good brand equity among the potential customers.
 Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the
company to overcome any supply chain bottlenecks.
 Strong dealer community – It has built a culture among distributor & dealers where the dealers
not only promote company’s products but also invest in training the sales team to explain to the
customer how he/she can extract the maximum benefits out of the products.

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 Successful track record of integrating complimentary firms through mergers & acquisition. It has
successfully integrated number of technology companies in the past few years to streamline its
operations and to build a reliable supply chain.
Weakness of Kraft Heinz – Internal Strategic Factors
Weakness are the areas where Kraft Heinz can improve upon. Strategy is about making choices
and weakness are the areas where an organization can improve using SWOT analysis and build
on its competitive advantage and strategic positioning.
 Need more investment in new technologies. Given the scale of expansion and different
geographies the company is planning to expand into, Kraft Heinz needs to put more money in
technology to integrate the processes across the board. Right now the investment in technologies
is not at par with the vision of the company.
 The profitability ratio and Net Contribution % of Kraft Heinz are below the industry average.
 Limited success outside core business – Even though Kraft Heinz is one of the leading
organizations in its industry it has faced challenges in moving to other product segments with its
present culture.
 The marketing of the products left a lot to be desired. Even though the product is a success in
terms of sale but its positioning and unique selling proposition is not clearly defined which can
lead to the attacks in this segment from the competitors.
 Not highly successful at integrating firms with different work culture. As mentioned earlier even
though Kraft Heinz is successful at integrating small companies it has its share of failure to
merge firms that have different work culture.
 Organization structure is only compatible with present business model thus limiting expansion in
adjacent product segments.
 Not very good at product demand forecasting leading to higher rate of missed opportunities
compare to its competitors. One of the reason why the days inventory is high compare to its
competitors is that Kraft Heinz is not very good at demand forecasting thus end up keeping
higher inventory both in-house and in channel.

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 Opportunities for Kraft Heinz – External Strategic Factors

 Decreasing cost of transportation because of lower shipping prices can also bring down the cost
of Kraft Heinz’s products thus providing an opportunity to the company - either to boost its
profitability or pass on the benefits to the customers to gain market share.
 Government green drive also opens an opportunity for procurement of Kraft Heinz products by
the state as well as federal government contractors.
 New environmental policies – The new opportunities will create a level playing field for all the
players in the industry. It represent a great opportunity for Kraft Heinz to drive home its
advantage in new technology and gain market share in the new product category.
 The market development will lead to dilution of competitor’s advantage and enable Kraft Heinz
to increase its competitiveness compare to the other competitors.
 Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at
lower interest rate to the customers of Kraft Heinz.
 Organization’s core competencies can be a success in similar other products field. A comparative
example could be - GE healthcare research helped it in developing better Oil drilling machines.
 The new taxation policy can significantly impact the way of doing business and can open new
opportunity for established players such as Kraft Heinz to increase its profitability.
 Opening up of new markets because of government agreement – the adoption of new technology
standard and government free trade agreement has provided Kraft Heinz an opportunity to enter
a new emerging market.
Threats Kraft Heinz Facing - External Strategic Factors

 Liability laws in different countries are different and Kraft Heinz may be exposed to various
liability claims given change in policies in those markets.
 New environment regulations under Paris agreement (2016) could be a threat to certain existing
product categories.
 Increasing trend toward isolationism in the American economy can lead to similar reaction from
other government thus negatively impacting the international sales.
 Intense competition – Stable profitability has increased the number of players in the industry
over last two years which has put downward pressure on not only profitability but also on overall
sales.

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 Growing strengths of local distributors also presents a threat in some markets as the competition
is paying higher margins to the local distributors.
 The demand of the highly profitable products is seasonal in nature and any unlikely event during
the peak season may impact the profitability of the company in short to medium term.
 The company can face lawsuits in various markets given - different laws and continuous
fluctuations regarding product standards in those markets.
 Imitation of the counterfeit and low quality product is also a threat to Kraft Heinz’s product
especially in the emerging markets and low income markets.
Porters Five forces model of Heinz

Porter Five Forces is a holistic strategy framework that took strategic decision away from just
analyzing the present competition. Porter Five Forces focuses on - how The Kraft Heinz
Company can build a sustainable competitive advantage in Food - Major Diversified industry.
Managers at The Kraft Heinz Company can not only use Porter Five Forces to develop a
strategic position with in Food - Major Diversified industry but also can explore profitable
opportunities in whole Consumer Goods sector.

Threats of New Entrants

New entrants in Food - Major Diversified brings innovation, new ways of doing things and put
pressure on The Kraft Heinz Company through lower pricing strategy, reducing costs, and
providing new value propositions to the customers. The Kraft Heinz Company has to manage all
these challenges and build effective barriers to safeguard its competitive edge.

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 How The Kraft Heinz Company can tackle the Threats of New Entrants

 By innovating new products and services. New products not only brings new customers to the
fold but also give old customer a reason to buy The Kraft Heinz Company ‘s products.
 By building economies of scale so that it can lower the fixed cost per unit.
 Building capacities and spending money on research and development. New entrants are less
likely to enter a dynamic industry where the established players such as The Kraft Heinz
Company keep defining the standards regularly. It significantly reduces the window of
extraordinary profits for the new firms thus discourage new players in the industry.

Bargaining Power of Suppliers

All most all the companies in the Food - Major Diversified industry buy their raw material from
numerous suppliers. Suppliers in dominant position can decrease the margins The Kraft Heinz
Company can earn in the market. Powerful suppliers in Consumer Goods sector use their
negotiating power to extract higher prices from the firms in Food - Major Diversified field. The
overall impact of higher supplier bargaining power is that it lowers the overall profitability of
Food - Major Diversified.

How The Kraft Heinz Company can tackle Bargaining Power of the Suppliers

 By building efficient supply chain with multiple suppliers.

 By experimenting with product designs using different materials so that if the prices go up of one
raw material then company can shift to another.
 Developing dedicated suppliers whose business depends upon the firm. One of the lessons The
Kraft Heinz Company can learn from Wal-Mart and Nike is how these companies developed
third party manufacturers whose business solely depends on them thus creating a scenario where
these third party manufacturers have significantly less bargaining power compare to Wal-Mart
and Nike.

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 Bargaining Power of Buyers

Buyers are often a demanding lot. They want to buy the best offerings available by paying the
minimum price as possible. This put pressure on The Kraft Heinz Company profitability in the
long run. The smaller and more powerful the customer base is of The Kraft Heinz Company the
higher the bargaining power of the customers and higher their ability to seek increasing discounts
and offers.

How The Kraft Heinz Company can tackle the Bargaining Power of Buyers

 By building a large base of customers. This will be helpful in two ways. It will reduce the
bargaining power of the buyers plus it will provide an opportunity to the firm to streamline its
sales and production process.
 By rapidly innovating new products. Customers often seek discounts and offerings on
established products so if The Kraft Heinz Company keep on coming up with new products then
it can limit the bargaining power of buyers.
 New products will also reduce the defection of existing customers of The Kraft Heinz Company
to its competitors.
Threats of Substitute Products or Services

When a new product or service meets a similar customer needs in different ways, industry
profitability suffers. For example services like Dropbox and Google Drive are substitute to
storage hardware drives. The threat of a substitute product or service is high if it offers a value
proposition that is uniquely different from present offerings of the industry.

How The Kraft Heinz Company can tackle the Treat of Substitute Products / Services

 By being service oriented rather than just product oriented.

 By understanding the core need of the customer rather than what the customer is buying.
 By increasing the switching cost for the customers.

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 Rivalry among the Existing Competitors

If the rivalry among the existing players in an industry is intense then it will drive down prices
and decrease the overall profitability of the industry. The Kraft Heinz Company operates in a
very competitive Food - Major Diversified industry. This competition does take toll on the
overall long term profitability of the organization.

How The Kraft Heinz Company can tackle Intense Rivalry among the Existing
Competitors in Food - Major Diversified industry

 By building a sustainable differentiation

 By building scale so that it can compete better
 Collaborating with competitors to increase the market size rather than just competing for small
market.
Competitive advantage and international trade
Kraft Foods’ competitive advantage is its company size. It thrust to collaborate with other
companies further augmented its competitive advantage. The company has experienced sporadic
progress and growth upon acquiring other companies to expand its horizons and business
endeavor. Kraft does this in to increase revenues on an annual basis.

HR Strategy
Focus on Employee Experience

At Kraft Heinz, the priority of HR executives is on the employees themselves rather than on the
completion of paperwork. The company feels so strongly about putting an emphasis on its people,
rather than processes, that it launched a 2019 global initiative about it. “The goal is to examine 12
different pillars of the employee experience (onboarding, career development, life events,
technology, etc.), define the desired benchmarks for each pillar, and standardize the Kraft Heinz
experience for every employee across the globe.

.Identify Areas for Improvement

Just as some organizations make an effort to survey employees about job satisfaction and level of
engagement, some companies also recognize the need to get input from those who are leaving.
“One item we excel at is consistency in exit interviews,” says Greg Ruffino, director of Training
at Training Top 125er Williams & Fudge. “We capture approximately 90 percent exit interview
rates with departing staff members. The questions are designed to extract areas of improvement

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for us, in addition to a general understanding of the employee experience to help us grow and
improve,” he says. “In addition, there are anonymous surveys presented to the staff via their
departments or sent out office-wide. These generate a great view of the company culture and
employee needs to which we can make adjustments if necessary.”

Constant Communication and Engagement

Maintaining HR that keeps employees at the center of its efforts requires communication with
those employees. Training Top 125er Windham Professionals, Inc., makes an effort to do just that,
says Senior Vice President of Human Resources Cherie Sugg. “We offer a variety of employee
engagement activities and communications.” These include, but are not limited to:

1. A monthly newsletter engages featuring a leader, site, or special event

2. Celebrating new hires, anniversaries, birthdays
3. Providing kudos to employees of the month

Marketing strategies

Heinz traditional approach for many years has been to engage in above-the -line advertising
of its lines, mainly through television. However, 1994 saw a significant change in its
approach. Heinz continues to use television advertising to support the umbrella ‘Heinz
Brand’ i.e. the synergy of its 360 lines. However, it has significantly moved into direct
marketing as a targeted approach to build stronger and more focused relationships with its
customers. This is a new and innovative approach.

There are three main reasons why Heinz has decided to make this move.

1. The proliferation of media channels and the associated fragmentation of consumer

audiences, has called into question the effectiveness of the advertising for
individual brands, especially when there are more than 360 in the portfolio. Many

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 manufacturers are asking themselves; 'Is there a better way of communicating
individual brand messages to key consumers?'

2. The development of sophisticated database systems for direct marketing. Today,

marketing departments have available to them all the latest technology to obtain
and retain information about their consumers, enabling them to communicate
individually with these consumers.

3. Increasing consumer sophistication, means that consumers have become more

selective from whom they buy. They are more likely to purchase those products
which are most in-tune with their needs and wishes, i.e. with organisations who are
prepared to listen to individual voices.

Relationship marketing
In her influential 1991 book ‘The Popcorn Report’, the American marketing guru Faith Popcorn
charts the rise of consumer bonding or relationship marketing. The principles she identifies are
particularly relevant to Heinz’ move into direct marketing.

'We do need to build relationships with our customers, to create a dialogue, expose them to our
corporate values, establish a bond based on something more deep-seated than product quality,
brand image or even simply meeting consumer needs.'

'At Home' has enabled Heinz to develop a genuine ongoing dialogue with consumers. The
magazine is particularly useful for bringing information on new products to the attention of
consumers in a relevant and motivating way.

Developing a direct marketing approach

The primary direct marketing tool which Heinz has Follow-on-Milks, with coupons and samples.
used, is its consumer magazine called Heinz 'At Home'. This magazine is published several times
a year and mailed to households from a database of over four million names. The names and
addresses of these households were collected using an existing database of consumers who had
responded to previous Heinz promotions and through other commercially available sources. This
is a very important approach and demonstrates an exciting way of using information technology
as a marketing tool to meet customer requirements. One of the key benefits of the programmed,
for both Heinz and consumers, is that the company is able to channel offers and promotions to the
appropriate people. Tracking is an extremely important procedure.

Heinz monitors which households have redeemed which coupons in order to continue to offer
consumers attractive, personalized offers on the products they want. Through this mechanism
Heinz develops a clear picture of how individual consumers in their database are responding to the
offers they are making. If the Jones family of Tennyson Avenue, Horsforth, is one of the four

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million households in the database, it is possible to check on which offers the family has taken up
from the Heinz magazine. Heinz is then better placed to build an ongoing relationship with this
family. This is a particularly powerful way of finding out how individual households are
responding to new lines and promotional offers. Database marketing gives the marketer far more
information than ever before.

Analyzing Kraft Heinz’s Great Brands Strategy

Growing great brands strategy

The Kraft Heinz Company (KHC) has been evaluating its portfolio on a broader basis in the
following areas:

1. big bet innovations

2. more investment in working media
3. building aggressive sales team
The two iconic brand portfolios of Kraft and Heinz complement each other and expect to create
synergies. The company expects to deliver aggressive cost savings of $1.5 billion by 2017. Kraft
Heinz also plans to reinvest the savings of the fixed-cost back into the business. The company thus
plans to increase its marketing and innovation investments in order to support revenues.

Heinz aims to have been the industry leading innovator in the consumer food space (XLP). Heinz
has set the strategy under which North America and Europe will operate as innovation platforms,
and remaining zones will implement the successful launches. Other zones will also have their
custom categories focusing on local innovation needs. In its open innovation initiative, Kraft Heinz
has been looking for novel sources of sustainable oils.

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Corporate Level Strategy
Corporate-level strategies are strategies that focus on gaining long-term revenue, profits, and
market value through managing operations in multiple businesses (diversification). Both Kraft
Foods and Heinz made a smart move in diversifying their businesses in July of 2015 by merging.
In the fiscal year prior to the merger, 61% of Heinz's total sales came from their international
market, while Kraft Foods generated 98% of total sales domestically. The strategic decision to
merge horizontally allowed for both companies to expand their market share simply through
association with the other company. While both are in the packaged food industry, the two
companies' primary markets differed and thus synergies and competitive advantages for both
companies have been generated.

The Kraft-Heinz Company (KHC) merger also led to competitive advantages through corporate-
level strategy by taking advantage of economies of scope. Economies of scope are cost savings
from leveraging core competencies or sharing related activities among businesses in a corporation.
According to an analysis of the merger completed and published by marketrealist.com, the
company is consolidating their North American supply chain network, and also announced a cost-
saving initiative in the form of the reduction in corporate headcount. By integrating their domestic
supply chains and reducing general and administration expenses, significant cost savings will
occur. Cost savings will also occur from shared manufacturing facilities, ingredients, and
customer/retailer relationships. Revenue enhancement through increased sales will likely occur as
customers recognize that both brands have solid and trustworthy reputations.

Business-Level Strategies
The Kraft-Heinz Company's business-level strategy is a hybrid, consisting of both cost-cutting and
differentiation tactics. Within the food product industry there is a significant amount of
competition, however Kraft Heinz Company (KHC) strives to provide customers with the best
product and value for their dollar as well as with new and innovative flavors/varieties of products
that can already be found on store shelves.

Aligning with their company goal of providing customers with the best value for their dollar, Heinz
ketchup is arguably tastier than its cheaper alternatives and also comes packaged in a bottle that is
more user friendly. Complete with the 'upside down lid' to help consumers use every last drop, and
a no drip valve to prevent messes, it is evident consumers are willing to pay a little more for
convenient ketchup. Although Heinz Ketchup may be a few cents more expensive per ounce, their
products are still reasonably priced and the average consumer can afford to purchase them, keeping
them in the low-cost category. In addition, KHC offers more variety (differentiation) in their
ketchups than their contenders. For example, KHC has recently introduced Heinz Organic, No
Salt, and Reduced Sugar ketchups to appeal to health-conscious consumers as well as Jalepeno
and Sriracha flavors to appeal to those who may be more adventurous.

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Finance Strategy
For the fiscal year 2017, Kraft Heinz reported earnings of US$11.0 billion, with an annual revenue
of US$26.2 billion, a decline of 0.6% over the previous fiscal cycle. Kraft Heinz's shares traded at
over $61 per share, and its market capitalization was valued at over US$136 billion in September
2018.

In February 2019, shares in Kraft Heinz fell to a record low of under $35, after the company
reported a $10.2bn loss for the previous year as the company announced that it would take a $15.4
billion write down of its Kraft and Oscar Meyer brands, slashed its dividend, and acknowledged
that the U.S. Securities and Exchange Commission had opened a probe into its accounting
practices. In August 2019 Kraft Heinz announced a further $1.22 billion in write downs. In August
2019, Kraft Heinz announced it was bringing back its former CFO, Paulo Basilio, who had served
in the position until 2017, to replace David Knopf, saying it wanted a "seasoned veteran" in the
job following a series of accounting errors.

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Introduction
The House of Young’s started its operations in 1988 as a small food processing establishment in
Karachi, Pakistan. From the beginning, people working at Young’s had the vision and passion to
raise Young’s to new heights with products that meet the daily food needs of our consumers and
offer high value of nutrition and convenience.

Another milestone in spreads category was “Young’s Chicken Spread” which was launched in
1989. Young’s was the first company to commercially manufacture Chicken Spread in the world.
The journey of successful launches continued with Sandwich Spread, Chocolate Spread, Cooking
Chocolate, Olive Spread, Dip Sauces and Natural Honey.

The journey of successful launches continued with Sandwich Spread, Chocolate Spread, Olive
Spread, Mayo Garlic and Natural Honey. Today, Young's enjoys successful brand leadership in
Mayonnaise and Spreads category throughout Pakistan. Young's is remarkably spreading in
various parts of the world. Corporate Philosophy The corporate philosophy of Young's is based
on stronger belief that all the benefits come from the Creator of whole Universe, Allah. At
Young's, we believe that our organization is responsible to our Creator, our people and our
business partners. Vision We will, Insha'Allah, be a brand of choice for consumers seeking Halal
and Convenient food products in the Global Halal Food Market. We will achieve this vision by
continuously giving our customers true value for their money, developing our people, improving
the way we work and thus developing a business model of excellence.
Today, Young’s enjoys successful brand leadership in Mayonnaise and Spreads category throughout
Pakistan. Young’s is remarkably spreading in various parts of the world.

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Mission Statement
At Young’s, our mission is to provide our customers Halal, hygienic, healthy, nutritional, and convenient
food products; through our customer-driven and service-oriented.

Vision
We will, Insha’Allah, be a brand of choice for consumers seeking Halal and Convenient food products in
the Global Halal Food Market.

We will achieve this vision by continuously giving our customers true value for their money, developing
our people, improving the way we work and thus developing a business model of excellence.

Corporate Philosophy
The corporate philosophy of Young’s is based on stronger belief that all the benefits come from the
Creator of whole Universe, Allah. At Young’s, we believe that our organization is responsible to our
Creator, our people and our business partners.

Core Values
1- Allah Pleasing

2- Responsive to Stakeholders

3- Mushawrat

4- Excellence

5- Improvement and Innovation

Quality & Food Safety Policy

The management of Young’s (Private) Limited is committed to satisfying the customers by
providing Halal, Safe and Convenient food products.

Is striving to establish and maintain a customer focused management system in compliance with
applicable legal and statutory requirements through a skilled and qualified team.

Puts due emphasis on communication within food chain to state requirements and exercise
necessary controls.

Sets and monitors measurable quality objectives which lead to continual improvement.

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 Product Range:
Real Mayonnaise

Mayonnaise

Mayo Garlic

Light & Egg Free Mayo

Chicken Spread

Sandwich Spread

Chocolate Spread

Olive Spread

Pizza Spread

Natural Honey

Value proposition
Young’s creamy mayonnaise has a rich creamy texture, with a mild saltish, mustard taste.

 Gives flexibility to create your own uniqueness

 Make your special dip sauces
 Make you special roll sauces
 Consistent in quality
 Hygienically manufacture & packed
 Ideal for rolls, dip, sauces, shawarma & sandwiches.

Quality and Food Safety Policy

Quality and Food Safety Policy Young's is committed to satisfy the customers by providing Halal,
Safe and Convenient food products. Young's is striving to establish and maintain a Customer
Focused management system in compliance with applicable legal and statutory requirements
through a skilled and qualified team. Young's is Puts due emphasis on communication within food
chain to state requirements and exercise necessary controls. Young's is Sets and monitors
measurable Quality Objectives which lead to continual improvement. Manufacturing Facilities

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Young's (Pvt.) Ltd. maneuvers three plants with the capacities to generate 20, 10 and 6 tons of
production from each plant per shift. Our first two production plants are for mayonnaise and
spreads, whereas, the latter is for the processing of natural honey. These units are compliant with
Quality and Food Safety Management System. The processing facilities also include chicken and
vegetable processing units which are specifically designed for the processing of dressing chicken
and fresh vegetables under highly hygienic and controlled conditions to keep them wholesome and
healthy for longer periods. The spread manufacturing units are equipped with a Metal Detection
System which scans the product to assure food safety. Young's owns fully-automatic,
programmable filling and packaging machine units. These efficient pneumatic units shape the
packaging foil into SAPs (Stand Alone Pouches); giving them a curved design, filling in product,
place the nozzle, spurges nitrogen in the headspace and seals it at a very high speed. Use of MAP
(Modified Atmosphere Packaging) for bottles and pouches ensures sustained quality products.
Vacuum sealing for bottles and nitrogen splurging for SAPs reduce the risk of deterioration of the
products. Automatic labeling, filling and packaging machines increase the efficiency of
manufacturing units. Use of SPCs (Statistical Process Controls) in all the unit operations helps in
increasing the uniformity of processes, improving quality of output and also facilitates in
continuous improvement initiatives like TPM, TQM and Six Sigma. Maintaining a food safety-
oriented facility, the management serves to fulfill the modern trends of manufacturing. To uphold
a controlled and hygienic environment, filtered air is used in the processing units where High-
Efficiency Particulate Air (HEPA) filters are installed with Heating Ventilation Air- conditioning
and Cooling (HVAC) system. Plant washing through Clean-in-Place (CIP) system makes the unit
more reliable and assures the safety of products being handled. To make products safer the
manufacturing facility is equipped with hi-tech automatic hand washing stations where chances of
cross contamination are non-viable. Manufacturing is done under the supervision of skilled staff
and training sessions are also arranged on routine basis to increase workers' awareness.

Brand Personality

25 Years old company Shangrilla is a sister concern company. Main Category in which young’s
deal is “Spread” Initial product is spread, and wanted to call as FOOD not spread. Initial use in
only “Salads & Sandwich” Awards

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Food marketing

Food marketing to children Studies of food marketing to children have concluded that: • Food and
drink marketing to children is dominated by foods high in fat, salt and sugar (HFSS). • The majority
of products fall within the ‘Big Five’ product categories: pre-sugared breakfast cereals, soft drinks,
confectionery, savory snacks and fast food.

 Children are influenced by a range of different types of media, including,

increasingly, internet advertising and social media.
 Much food advertising operates at a subconscious level. The boundaries between
socializing, entertainment and marketing are not clear for children.
 Themes of fun, fantasy and taste are used to promote food and drinks to children. •
Due to the range and scope of interaction children have with marketing, the
opportunities for parents to mediate are limited.
 Food promotion is having an effect, particularly on children’s preferences, purchase
behavior and consumption.
 Food marketing influences children’s choice at both a brand and category level, e.g.
Drink brand and fizzy drink; brand of snack and snack type. Marketing techniques
 Children and young people are engaging with media at younger ages.
 Major food and drink brands use a range of media such as TV, advertiser-owned
websites and social networks, mobile phones and game consoles.
 A range of marketing techniques are developing including, product placement, viral
marketing, averaging, social networking, sponsorship, peer to-peer marketing,
user-generated content, equity brand characters, licensed characters, celebrity
endorsement, premiums, give-away and brand promotion.
 Children have increasing exposure to marketing and promotions from around the
world while opportunities for parental mediation are reduced .
 Many HFSS brands have links to in-school marketing and sports sponsorship.

Quality Policy

Is committed to satisfy the customers by providing Halal, Safe and Convenient food products. Is
striving to establish and maintain a customer focused management system in compliance with
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applicable legal and statutory requirements through a skilled and qualified team. Sets and monitors
measurable quality objectives which lead to continual improvement.

Market share of the main 4 products

Mayonnaise = 83%

Sandwich/Chicken Spread = 87%

Chocolate Spread = 15%

Honey = 3%

Mayonnaise it is the market leader in this category. Main Ingredients are Eggs & vegetable oil.
Delicacy involves Viscosity need to maintain Demand need to maintain target market should be
defined because expiry date is very short due to Eggs involvement. Target Market Young Females
Citizen/Urban B, B+ & C Category Female only is to “She wants to Win Heart of the other
members” Because mayonnaise use in Kitchen, Position It is a helping (Add Taste) in product,
NOT A PRODUCT. We don’t eat mayonnaise by eating a spoon, we eat with French Fries, Burger,
Sandwich, and so on. Communication of the Brand Young’s Follow “Shariah Compliance
Company” So, TV Commercial, Radio, Cinema don’t prefer. Using: Beverages & Activities to
communicate product in the market. Activities include Programs and fun gala at schools and
colleges, MAIN target are GIRLS. Perform different games in which they want to use spread &
mayonnaise so how best they can utilize, offer gift box which include = Chicken/Sandwich Spread,
Mayonnaise, Honey & Chocolate Spread. Focus on 9th class to graduation females and offer them
RECIPIE BOOK. Other Helping things in Communication

1- Development in kitchen
2- Brand Ambassador in different malls and events
3- Facebook page and different activities, question answer session.
4- Exhibition in lifestyle & Dawn. All above are Basic Parameters

In outdoor Signboard, Billboard, Female Magazines, Digest of Females, Print Ad, etc. Brand
Equity of Mayonnaise is huge; we can calculate by Market Share and trust level of 83%.

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Reasons for Failure of Young’s Ketchup in Pakistan:

There are two major reasons for the failure of Young’s Ketchup in Pakistan. Lack of variety in
ketchup Lack of Promotion.

Our Proposed Marketing Strategy:

We propose that the Company should adopt Product Development Strategy.

This can be done by launching new flavors in the product brand.

• The Company should introduce flavors, like

• Chili Garlic ketchup

• Chili Ginger ketchup

• Hot and Spicy ketchup

SWOT Analysis:

Strengths :

Higher Brand image

Quality and Taste

Strong brand loyal consumer base

New flavors

Best quality in low price

Attractive trade promotion

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Weaknesses :

Hard core loyals

Unimpressive packaging

Higher pricing than local brands

Narrow range of distribution channel

Opportunities:

• Improvement of product

• Improvement of packaging quality

• Changing preference of consumer towards fast food

. • Decreased operational cost

• Developing foodservice industry

Threats :

• Price war with competitors

• Strong presence of regional competitors

• Modest economy

Porter's Five Forces Model:

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Target Market:

Young’s target market consists of middle and upper-income household as well as foodservice
sector for example; restaurant.

Segmentation:

Demographic Segmentation:

Gender – Male and Female Age – from 5-50 Years

• Singles and families.

• Mostly females and children.

• Have a household income of more than 10,000 per month

• Middle-income and upper-income household.

Geographic Segmentation:

Country – Pakistan Province— Sindh City – Karachi Population about 18.3 million

Psychographic Segmentation:

we have targeted the middle to upper class households who need ketchup for family and their
children to add extra taste to their eating. We have targeted the consumers who are food loving
and they heavily consume the Fast food.

Behavioral Segmentation:

• Paying a premium for higher quality, tastier ketchup.

• Special offers at Eid and other occasions

• Health consciousness

• Potential consumers

• Medium product users

• Shifting loyals

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Marketing Mix:

Product:

Product The first and basic P of the marketing mix is product. Young's Tomato Ketchup provides
an ideal relish for use with all types of foods especially fast foods.

Characteristics of Product:

• The product Best quality

• More durability

• Posses no harmful chemical ingredient

Product Differentiation:

Young’s Tomato ketchup should emphasize its differentiation on the basis of : Brand Quality
Taste Variants.

Packaging:
• The brand name of young's tomato ketchup will be visible in packaging.

• Colors will be according to the taste and quality of the product.

• Packaging will carry the Product Attributes

Pricing Strategy:
• Pricing is an important strategic issue because it is related to product positioning.

• For Young’s Tomato Ketchup the pricing objective is to maximize the market share.

• price penetration strategy will be employed. So the prices will be a little lower than the major
competitors.

Distribution Strategy:

• Intensive distribution to have our product sold through well-known stores and shopping malls.

• The major ketchup catalogs and Websites.

• Detailed specification handouts, full-color photos and displays featuring the product

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. • We will also arrange special trade terms for retailers who place volume orders

Promotion
Young’s tomato ketchup should be promoted using the ATL and BTL activities both. The blend
of these activities is important to communicate the brand and message to the target market.

Advertising

Direct marketing

Sales promotion

Advertising:
Advertising is the non personal communication of information usually paid for and usually
persuasive in nature about products, services or ideas by identified sponsors through the various
media.

“ The goal of advertising is “Informative Advertising”.

Social media Advertising

• TV ads : T.V Commercials(ARY digital, Geo,Ptv home ,CABLE CHANNELS) • Radio ads:
Radio FM 94.6, FM 100, FM 106 • Bill Boards • Print ads: Newspaper (DAWN, JANG) and
magazines

Sales Promotion:

• Sampling program

• Free trials

• Point of purchase displays and demonstrations

• Free Trials

• Point of Purchase demonstration

• Event and Experiences

• Trade Promotion tools Incentive to Retailers:

• These incentives are in the shape of:

• Return Tickets

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• Free Transportation Services.

Conclusion:
Through new ideas, constant innovation and development of its core icon brands, Heinz is able
to stay at the forefront of its markets. By responding to the changing needs of consumers, Heinz
has achieved a high level of consumer satisfaction. Heinz continues to enjoy the benefits of high
levels of brand awareness and customer loyalty an enlarged customer base with a constant
demand for products high levels of customer confidence, which encourages support of new and
existing Heinz products even when faced with new offerings from rival producers.

https://www.slideshare.net/hiranust/youngs-relaunch

https://www.slideshare.net/MuhammadZakaria13/youngs-food-brand-management

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