1. Introduction-MG628 International Marketing Management
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This report is based on the Hello Fresh company which now owns Green Chef and planning to expand the business in Denmark as a brand under the umbrella of Hello Fresh (Vardi et al., 2020). This is going to help the company to reach wider and broader and most importantly new potential customers for the business. This report will help the business to know more about the cultural insights, the various segmentation and buying behaviour of the Denmark citizens in the country. The market entry strategies involve 2 options; Direct Arrangements and Joint Venture with Amazon. The different global trends in the international marketing environment and how social media shapes the success of the business and assist in reaching a wider and broader audience.
2. Background of Hello Fresh
HelloFresh delivers pure, nutritional, and customizable food options. The firm maintains an online service that allows clients the option between different sorts of dishes and cuisines to be distributed on specified days. Company conducts their business in International and United States of America. Global corporations include businesses in the U.K, The Netherlands, Belgium, Luxembourg, Australia, Germany, Austria, Canada, and Switzerland (Forbes Media, 2021). The corporation derives a majority of its income via the US. The business was formed by Jessica Nilsson Schultz, Thomas W. Griesel, and Dominik S. Richter on October 4, 2011, and is based in Berlin, Germany.
3. Market Entry Strategy
Green Chef is looking to expand its businesses by adding a new channel of distribution and two options can be discussed here.
First Option – Direct Arrangements
There is no denying that distribution is the crucial element for any organization or business that deal in product-based operations. The distribution enables businesses to deliver their goods or products to the consumer. Green Chef also wants to expand and deliver its goods and products to the consumer without needing the assistance of any third party or agents in Denmark. This direct distribution way of distribution can assist the Green Chef to generate more revenue (Kumar and Ruan, 2006). Generally, direct distribution requires the business to have their distribution system and all the management are done by the business itself. Most of the direct distributions are adopted by online businesses and Green Chef can be a good fit for this direct distribution for the customer. Green Chef can also get hugely benefit by collaborating with REMA 1000. As of 2020, the revenue of the Rema 1000 peaked at a value of 84.91 billion Norwegian kroner (Blázquez, 2021).
This value shows how large Rema 1000 is in Denmark; it introduces new opportunities for the Hello Fresh Owned Green Chef. This collaboration can enable the Green Chef to sell their various offerings to the customer in the Rema 1000 and also able to provide their services from their website. A huge boost in revenue generation can take place because, by collaboration, Green Chef can reach the wider customer with the assist of a supermarket and the Hello Fresh's Website as well. In this time of the pandemic, people are heavily relying on online services to get the products at their convenience. Hello fresh owned Green Chef’s goods can be ordered from the Rema 1000 store website in Denmark and simultaneously, the company can also provide their goods and services from Hello Fresh Online Store.
Second Option – Joint Venture with Amazon
Amazon is the largest e-commerce company in the entire world. As of 2020, the net revenue of Amazon was 386.06 billion USD (Coppola, 2021), the formation of the joint venture with Amazon can be profitable for both companies. Amazon is very impressive in delivering goods and services to customers at their convenience. Amazon is also doing great in its various services like Amazon Prime, Amazon Luna etc and this prime service will be greatly beneficial for the delivery of goods and services to different people living in different parts of the world. Both Green Chef and Amazon conduct their business through the medium of E-Commerce, and joining hands can be beneficial for both companies. The joint venture can be easily dissolved by the will of the joint venture agreement.
The formation of a joint venture occurs when the two companies want to achieve particular goals and they are willing to use all their resources to accomplish that particular goal (Killing, 2017). Green Chef can increase its reach by providing goods and services to people living in different parts of the world. Amazon Prime is the service that enables the customer or consumer to get the goods or services on the same day of ordering (Pandit and Poojari, 2014). Green Chef can deliver their various meal kits with the help of Amazon to a customer and the prime customer can get additional perks like more salad with the ordered meal kit. For Instance, Kohinoor Foods LTD an Indian rice exporter company joined hands with McCormick a US spice maker. This joint venture enabled McCormick to market the basmati rice of Kohinoor Foods LTD in India.
From both of the options, the Second option is the most favourable. The formation of the joint venture between Amazon and Hello Fresh can result in reaching a wider audience around the world. There is no denying that the fact that Amazon is the largest E-Commerce retailer and it is natural that it can assist Hello Fresh to a wider audience in Denmark as well as other parts of the world and it can also result in maximum profitability.
4. Application of Global Trends in the Local Environment
The New Norm – COVID 19
The pandemic has changed the lifestyle of the people and this living with the virus has become a new normal. The rise in the huge popularity of online services can also be easily recognized as people are living more indoors. For Hello Fresh, this trend is very relevant because the business model of Green Chef is heavily dependent on online services as they deliver the meal kits via E-Commerce to the customer. The pandemic has affected many mainly offline businesses but on the contrary, the online business recognized a huge profit and sales (Bhatti et al., 2020). The biggest evidence can be seen from the giant Amazon Corporation which grew significantly at the time of COVID 19. After the arrival of the virus, the customer starts to order on a massive scale and quantity. The E-commerce business in Denmark reported that the revenue was 25 % higher than expected (Tighe, 2021). There is a need to reduce the shipping fee of the meal kits in Denmark so that more people can use the Hello Fresh for the food.
Healthy World
The rising interest in being a healthy person is rising day by day and this trend of being healthy can result in the success of the Hello Fresh's Green Chef. Food is a vital part of becoming a healthy person and pandemic like COVID 19 has disturbed the system of food. This is a fact that the majority of the problem starts from the stomach as eating unhealthy food and an unhealthy routine can disrupt the human body. This trend is very relevant for Green Chef because green chef provides healthy food at the customer's convenience. The data shows that 53.4% of the Denmark people spent at least 2 hours exercising (eurostat, 2017). Green Chef needs to offer “gluten or allergen” free meals to the customers in Denmark.
Veganism
Vegan refers to a diet that involves food that is completely based on the plant. Vegan diets do not include non-vegetarian items such as meat, egg and even milk. Veganism has been growing significantly in different countries around the globe. However, the growing rate of veganism is still very low in various places but it can be witnessed that the increment is still significant in terms of the rising vegan population (Chai et al., 2019). This trend is relevant for Green Chef because the business deals in organic and quality vegetarian meals. More vegan people mean more customers and more revenue generation. The stats shows that 2.5% of the Denmark’s population lives a vegan lifestyle and this 2.5% people never eat non vegetarian meals (Alle rettigheder forbeholdes - Dansk Vegetarisk Forening, 2017). Green Chef must introduce quality vegan food items and more varieties in terms of vegan food choices.
5. Importance of Social Media in Denmark
Social networking has transformed the way people conduct business and also open up new opportunities. Social networking helps businesses to reach the wider customer for Green Chef to engage with the consumers, can boost brand recognition, and create more opportunities (Vinerean, 2017). There is no denying that Denmark is the leader in the adoption of digital technology by companies. Moreover, digital revenues by businesses are significant. Denmark is one of the most digitalized countries in Europe. Over 90% of the total Danish population uses the online platforms actively which also makes their technical skills worthwhile. The term social media is not a new concept in Denmark and the technology is critically standardized and the people have already adapted the technological aspect in Denmark (Nielsen and Schrøder, 2014). Denmark has many areas of technology where it impresses the most such as technology in terms of audio and sound, Invention of robots, wireless technology etc. Green Chef’s business operations can be easily promoted with the help of social media channels in Denmark. As of 2021, the most used social media in Denmark is Facebook which was 62.7 per cent; twitter was 7.05% and 4.37% was for YouTube. Over 5 million people in Denmark use social media (Statista Research Department, 2019). The cultural values of Denmark are consisting of trust, openness and corruption-free culture etc and these needs can be easily fulfilled by Green Chef and the business can operate their business activities ethically and transparently.
To promote the brand effectively, Green Chef must use Facebook as their main medium for promoting their offerings and ultimately reaching the wider audience in Denmark. Green Chef already has a Facebook Page where they post regularly to inform customers about the new or existing offerings. However, other social media platforms such as Twitter and YouTube are not as active as they should be. On Twitter, the last post of Green Chef was on March 30, 2020, and the situation on YouTube is also the same. Even though the percentage of active users on YouTube and Twitter is low (Twitter was 7.05% and 4.37% was for YouTube), there is a necessity of targeting those customers as well (Twitter and YouTube) (Statista Research Department, 2019). The Facebook page must include a large portfolio of organic food items in the offerings which are fresher and more organic because a large portion of consumers in Denmark consumes and prefer and are also willing to pay extra for organic food items rather than inorganic items. Green Chef can make a Facebook page especially for the Denmark customer base and as the people in Denmark put heavy emphasis on nationalism, the Facebook page of the Green Chef must include Danish Flag in their page and customized meal-kit including the Danish Flag.
6. Conclusion
Hello fresh can expand the business in Denmark because Denmark is a land of opportunities and the citizens in the Country prefers organic food and are always ready to spend extra on organic products rather than spending money on organic food items. The Joint venture with Amazon will be most beneficial because amazon can assist Hello Fresh owned Green Chef to enhance the whole e-commerce operations. Both companies involve an e-commerce business model in which a large number of people access their goods and services from the online medium of accessibility. As of 2021, the most used social media in Denmark is Facebook which was 62.7 per cent; twitter was 7.05% and 4.37% was for YouTube (Statista Research Department, 2019). Over 5 million people in Denmark use social media. Facebook is the prime platform for Denmark Citizens and they are technological advancements in a fast manner.
7. References
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Chai, B.C., van der Voort, J.R., Grofelnik, K., Eliasdottir, H.G., Klöss, I. and Perez-Cueto, F.J., 2019. Which diet has the least environmental impact on our planet? A systematic review of vegan, vegetarian and omnivorous diets. Sustainability, 11(15), p.4110.
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Appendix
Appendix One – Segmentation and Buyer Behaviour
Danish are the nation's greatest lovers of "Organic Products". Findings suggest that 34 per cent of Denmark customers are ready to spend extra for organic goods in general, and 43 per cent feel that organic foods are healthy for individuals and everyone. The research also demonstrates general trends of customers becoming more involved and prepared to spend extra for the Organic Goods or meals when persuaded about excellence, ecological and morals (Jespersen et al., 2017). The Denmark customers are by far the biggest organic customers on the planet. In reality, Denmark boasts the nation's biggest market for organic foods. Worldwide revenues for organic food items is very high. The year of 2019 witnessed revenues of € 106 billion and Denmark was the highest contributor. Denmark is the nation that makes up for the highest percentage of the total sales of organic food (Denver et al., 2019). Green Chef can target customers of Denmark of all ages. The pandemic has accelerated organic sales in Denmark. During the pandemic, the buying behaviour involves people are more focusing on buying Danish brands rather than other brands. Danish people are uploading and persuading other people to buy more local brands to support the country. In this time of CORONA, the people are buying items in a large quantity from the online medium.
Appendix Two – Cultural insights
Denmark culture is egalitarian, indicating that it prioritises fairness, justice, and freedom. It features a decentralized approach in which power, for instance, among the old and youth, employers and workers, or instructors and pupils are not highlighted. Everybody has an exactly equivalent chance to engage, express views, and fulfil their potential (Bruun, Jakobsen, and Krøijer, 2011). Denmark also boasts several of the greatest gender equality. Females are widely regarded in the culture and viewed as having equivalent standing as males. Females have tremendous flexibility to continue their jobs; employer maternal break policies are generally liberal to encourage female decisions in their lives. It denotes pleasure, acceptance, and enthusiasm. Danish embrace their dear members at the airports carrying the Denmark flag (Jaskulowski, 2016). People adorn birthday cakes, wedding cakes, and Christmas trees with dozens of Denmark flags. The plastic packaging of cucumbers also has a danish flag in the supermarket.
