International

Marketing
Group Assignment
Part C

Market Entry and Marketing Mix

Strategy

Arnott’s Tim Tams -

Ukraine
 Market Entry and Marketing Mix
2
Strategy

October, 2010

A paper prepared for:

BUSI 3024 | International Business

Students Nos: u4535682 | u4314466 | u4526087
Semester Two, 2010

Contents
2
I Market Plan Overview.........................................................................................................3
II Market Selection Summary................................................................................................5
III Market Entry Strategy......................................................................................................8
IV Marketing Strategy.........................................................................................................10
Product......................................................................................................................... 10
Promotion.....................................................................................................................10
Placement....................................................................................................................12
Price.............................................................................................................................14
V Feasibility Analysis .........................................................................................................15
VI Plan Summary.................................................................................................................21
Bibliography........................................................................................................................24
Appendix............................................................................................................................. 26

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I Market Plan Overview

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Strategic Summary
Short Term Objectives:

Exporting through a distributor or dealer, selling at

supermarkets, hypermarkets and convenience stores in Kyiv.

Occupy 5% of market for Chocolate-coated biscuits at the end

of the first year, valued at approx. US$25m.

Acquire incremental market knowledge and establish brand

image.

Mid Term Objectives:

Expansion into markets in other major cities, with a further

increase in market share through better established reputation
and market knowledge.

Consider viability of establishing local production facilities and

warehousing.

Once sufficient trade relations established, explore possibility of

direct exporting and foregoing distribution agreement.

Long Term Objectives:

Potential to penetrate into neighboring countries through

establishment of a free trade region.

Use of Ukraine as an export base.

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II Market Selection Summary

Why should Arnott’s expand?

Arnott’s have been the market leader for many decades within Australia. Currently
Arnott’s have a total revenue of $1.2 Billion, far greater than any of its competitors.
Recently, Arnott’s has undertaken a global expansion strategy. They have moved to many
overseas markets, such as Israel, Canada, USA, England and the region of Asia. These
expansions have been extremely successful, for example in Israel.

A region that has been largely untapped by Arnott’s however, is Eastern Europe.
Competitors such as Kraft have recently moved into this market with their branded
products and their results have been moderately successful, with Kraft gaining a strong
foothold in the confectionary markets. Therefore there is also potential for Arnott’s to
succeed within this region. In particular, Arnott’s strong manufacturing capabilities allow
them to produce their products in large quantities and in a timely manner, with ample
capacity to produce excess goods for overseas sale. They undoubtedly have the necessary
capacity to serve an additional market and as a result, enjoy the benefits of economies of
scale. Strategically, Arnott’s must consider expansion into Eastern Europe as a valuable
opportunity.

Why Ukraine?

Ukraine is a suitable market for Arnott’s to move into. Firstly, Ukraine is a member of the
World Trade Organisation and has adopted the principles of the Marrakech and other
agreements. This means that Ukraine welcomes international trade and has opened their
markets to many international firms. Secondly, there is a large confectionary and biscuit
market within Ukraine. This market remained relatively large within its region despite the
Global Financial Crisis, which indicates that Ukrainian consumers are generally willing to
spend money on confectionary goods even in harsh financial times. This presents Arnott’s
with a unique opportunity to incorporate the country within their global expansion
strategy. In addition, Ukraine may serve as a test market for other Eastern European
countries, particularly Russia. It has the second largest population within the Eastern
European region, totalling around 47 million people. This creates substantial market
potential in regards to the revenue achievable.

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Geographically, Ukraine is also well positioned as a possible location for a strategic

expansion of Arnott’s current global manufacturing network. With the closest
manufacturing plant in the United States, Ukraine is a suitable choice to establish a
manufacturing plant which serves surrounding Northern Asian, Middle Eastern and
European areas. Moreover, in light of high unemployment levels, Arnott’s foreign direct
investment in a plant would be view favourably by the Ukrainian Government. Given the
high prediction of growth within the chocolate-coated biscuits market of 63% by 2014, the
option of local manufacturing may prove lucrative. Finally, Ukraine is a market that other
international organisations have been able to move into successfully, which Kraft holding
the greatest market share. This suggests that Ukrainian consumers do purchase foreign
products and whether strategically to match Kraft’s expansion efforts or simply to ensure
Arnott’s own successful globalization, Ukraine should be Arnott’s next target.

The Target Market

Women

Women in Ukraine are a largely un-targeted group in terms of consumer products. Over
the past few decades, women have been gradually given equal constitutional rights to
men and especially in urban areas, they are now generally considered equal in a social
sense. This perception is growing across the Ukrainian culture as women become more
prevalent in society and hold much more freedom to make their own choices.
Interestingly, there are few biscuit products targeted towards women due to a lack of
recognition of women as a target group. Thus Arnott’s are attempting to take advantage
of this opportunity and become the first movers into this subsection of the market.
Moreover, the typical status of Ukrainian women as the main decision makers of food
purchases within a household, including food type and brand, make them a particularly
good target choice.

Middle to Upper Class, Working with a Disposable Income, Kyiv

Women in Ukraine are working more now than ever before and constitute around 45% of
the workforce in the country. This number is set to grow in the future as Ukraine’s
perceptions of women are becoming increasingly modern. Women who work in highly
urbanised areas such as Kyiv earn double the amount of salary compared to country areas
of Ukraine, which means they are more likely to be able to have the disposable income to
purchase Tim Tams. In addition, women between the ages of 30-39 have the highest gross
income. As our target market works, they will want to unwind and treat themselves after a
long day’s work. This is a behavioural aspect of the target market that Tim Tams would
suit.

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Arnott’s Slogan

Arnott’s slogan, “There is no substitute for Quality” suits the market we are entering. We
want to position Tim Tams in a premium market segment, with the unique selling
proposition of quality. This remains very close to the strategic alignment of their products
in Australia and abroad as they price their products in a premium manner.

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III Market Entry Strategy

Entry Objective

Arnott’s entry into the Ukrainian market will embrace a long-term, strategic approach
aimed at establishing a foothold in the country’s growing confectionary market. Currently,
forecasted figures for the chocolate coated biscuit niche indicate a 63% growth in demand
by 2014, totaling an approximate US$509m.1 The targeted market share for Tim Tams
after the first year of entry will be 5% of this niche, an estimated US$25m, comprising a
large portion of market share from existing producers as well a degree of market creation
itself. Over the medium-to-long term, a firmer establishment of brand name and better
understanding of local preferences may allow an expansion of this market share and
possible entry into neighboring markets. This opportunity is particularly lucrative due to
Ukraine’s prospective free trade agreement and membership with the EU, reserving
potential to expand into other Eastern or Western European countries over time.

Entry Mode: Indirect Export

Given comparable levels of both risk and opportunity indicated by Ukraine’s recent
consumer and economic trends, a gradual approach to entry is crucial to minimize risks
from excessive outlays and changes in economic or political conditions prior to
establishing a stable foothold. In particular, Arnott’s lack of local knowledge and market
experience in Ukraine or neighboring Europe results in heavy liabilities of foreignness and
a gradual entry will assist in acquiring incremental market knowledge. The most
appropriate mode of entry, requiring a comparatively small degree of involvement, is thus
by way of export.

Employing an export strategy, further capital requirements are moderate and will mainly
arise in the areas of product adaptation, importation and marketing expenses. The product
adaptation process includes changes to Tim Tams’ packaging, biscuit portions or flavours
while importation costs involve tariff charges, physical transportation costs, distribution
expenses and any fees incurred to overcome non-tariff barriers. At present, import tariffs
for chocolate coated biscuits rest at 5% of product value while shipping costs largely vary
with quantity and carrier. In terms of non tariff barriers, each shipment of Tim Tams must
undergo inspection for labeling standards and other sample tests, which may create
substantial fees and potential product loss. Ideally therefore, Arnott’s should obtain a
1
Euromonitor International. (November, 2009). Biscuits - Ukraine. Retrieved from
http://www.portal.euromonitor.com/

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‘certificate of conformity’, which remains valid as certification of a particular product for a

period of 2-3 years.2 Excluding distribution costs, the Doing Business Report estimated
import expenses to average at a total of US$1430 per 20 foot shipment container in 2010.3
Meanwhile, marketing expenses will initially be considerably higher than in the domestic
context in order to establish Tim Tam’s brand image amidst a competitive landscape.
However, such costs are unavoidable.

Adopting an exporting strategy allows Arnott’s to strike the best balance between low to
moderate levels of involvement, relatively low exposure to political and economic risks
and the ability to nonetheless create a market presence for strategic purposes. Exit
options in the case of an unsuccessful experience are also much lower.

2
United States Department of Agriculture. (July 21, 2009). Ukraine Food and Agricultural Import Regulations
and Standards - Narrative . Retrieved from http://gain.fas.usda.gov/
3
World Bank and International Finance Cooperation. 2010. Doing Business 2010 – Ukraine. Retrieved from
http://www.doingbusiness.org/

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IV Marketing Strategy
Product
In Australia, there are several varieties of Tim Tam available to consumers. As we are
introducing a new product onto the Ukrainian market, our initial export should focus on
two to three basic varieties, so as not to overwhelm or confuse consumers with too many
choices. If the initial introduction is successful, other varieties could be exported or even
developed based on further research into consumer tastes.

Ukrainians prefer milk chocolate to other varieties4 and as such Original and Double
Coated Tim Tams would be most suitable for export. Dark chocolate is the next popular
and the Dark chocolate variety would also have a fairly broad appeal to the target market,
particularly given the alleged health benefits of dark over milk chocolate5.

The packaging of the product may require some alteration to comply with labeling
regulations and to translate text into Ukrainian. Ukrainian and Russian both utilises the
Cyrillic alphabet and as such, an English, lower-case, ‘m’ is in fact a Ukrainian ‘t’. Tim Tam
would read, as ‘Tit Tat’ so changing the text to ‘Tiм Taм' would be beneficial for
establishing a correct knowledge of the brand from the outset.

Promotion
Initial promotion of Tim Tams will use a combination of fairly traditional methods such as
print, billboard and television advertising to create and build awareness in the market, of
the newly introduced product. A website should also be created to provide consumers with
a source of further information about the product.

A well targeted and executed television advertising campaign will be an essential

component of the promotion strategy. Television advertising in Ukraine is the most
effective in communicating with a large proportion of the target market. This is reflected in
the fact that over 50% of all advertising expenditure is on television.6 The advertisement

4
Euromonitor International. 2009. Chocolate Confectionary - Ukraine. Retrieved from
http://www.portal.euromonitor.com/
5
Health Benefits of Chocolate (2009), retrieved from
http://longevity.about.com/od/lifelongnutrition/p/chocolate.htm

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should focus on introducing Tim Tams as a high quality, indulgence to be shared or kept
all to oneself.

Arnott’s has in the past produced highly successful advertisements in Australia which were
aimed at a similar target market. The advertisement involving an attractive male genie
and a women wishing for a never-ending packet of Tim Tams would likely be transferable
to the Ukrainian market. It would position the product as something, which is highly
desirable as an indulgence while presenting the product in an entertaining way. The
addition of an attractive male as the genie, will also assist in assuring those being
targeted pay attention to the advertisement.

Within the advertisement, an image of a woman enjoying Tim Tams should include a cup
of tea/coffee to create an association between the two products. This capitalises on the
increasing popularity of hot drinks7 and will hopefully create an idea that a cup of tea or
coffee can become a truly indulgent experience if it is paired with a Tim Tam.

TV spots should predominantly be taken out during the most popular [amongst the target
market] television programs at prime time as this is the time most working women will
have an opportunity to be watching television. Some daytime advertising would also be
beneficial to target housewives within the segment. To minimize advertising spend and to
increase effectiveness, a two weeks on - two weeks off approach could be taken. During
the on periods, the advertisement would play at a high frequency throughout the most
popular programs. During off periods, print and billboard will continue to reinforce the
marketing message.

In conjunction with the television campaign, print and billboard advertising will be utilised
to reinforce the message of the television advertisements. Print advertisements should be
placed in women’s magazines such as, Natali (circulation of 688,200) and Edinstvennaya
(circulation of 320,000)8, which reach our desired market segment. This does however
create an issue with advertising a product nationally, while it is only available locally in
Kyiv. Even if the advertisement is seen in areas where the product is unavailable, the
advertisement still creates awareness of the product and the brand, which will be
beneficial when expanding into other regions of the country.

6
Overview of Ukrainian TV Broadcasting Market, retrieved from
http://www.horizoncapital.com.ua/files/sectors/Ukr.%20TV%20Broadcasting%20Market.pdf

7
Business Monitor International. (May, 2010). Ukraine Food & Drink Report – Q3 2010. Retrieved from
http://proquest.umi.com/
8
Journalism Network, Ukraine – Media Landscape, retrieved from
http://www.journalismnetwork.eu/index.php/_en/country_profiles/ukraine/

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The Kyiv Metro provides an excellent opportunity for a poster and billboard campaign.
With a daily ridership of between 1.7 – 1.9 million9 the vast and numerous metro stations
are highly concentrated with potential consumers. Underground metros have a large
number of escalators, whose walls are often lined with small print, or even digital
advertisements. Large subways and open station areas also provide a larger space for full-
sized billboards to be placed. Print and billboard advertisements would echo the television
commercial but would also make consumers aware of Arnott’s slogan ‘no substitute for
quality’. The company could also use images on the advertisements of specially designed
packaging similar to a recent Australian campaign where ‘Tim Tam’ was replaced with
‘Want Me’.

Though an active online campaign will not be undertaken, given the relatively low internet
use and online advertising spend, a website should still be developed to provide further
information to consumers. Ukrainian consumers are generally skeptical of advertising10,
but if they have access to a website (which echoes the tone and style of the other aspects
of the campaign) any concerns or questions will hopefully be addressed by the site.

As the product matures within the market and the company looks to expand its export
operations to other regions of Ukraine, similar advertising strategies should be utilized to
introduce the product. In addition to this, sales based promotions would also be an
effective way of increasing market share and enticing consumers to purchase. For
example, a competition to win a trip to Australia would provide a great incentive to
purchase the product as many Ukrainians are not in a position to travel overseas often.

Placement
The Ukrainian distribution system is relatively streamlined for food products, as illustrated
by Appendix 1.1. Three main levels of middlemen exist between the importer and
consumers, including distributors, wholesalers and retail agents. Initially, Tim Tams’
distribution will likely traverse all three levels.

Among the Ukrainian regions, the first point of entry for Tim Tams will be the capital of
Kyiv due its relative economic prosperity and cosmopolitan character. At the outset,
distribution will focus only on Kyiv so as to minimize distribution expenses and to test
product reception. However, an aggressive approach will be taken toward coverage and

9
Kyiv Post (2009), Kyiv decides to spend Hr 20.2 million on 50 anniversary of metro, retrieved from
http://www.kyivpost.com/news/city/detail/56121/#ixzz12LD5GZ3xhttp://www.kyivpost.com/news/city/detail/56
121/
10
Dr. Sunanda Sangwan, Advertising in Emerging Markets: Consumer Attitudes in Ukraine, Institute of
International Economics and Management Copenhagen Business School retrieved from
http://openarchive.cbs.dk/bitstream/handle/10398/6522/wp11.pdf?sequence=1

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shelving arrangements across the city in order to compete effectively against existing
producers. In the medium-to-long term, other urban areas may also be included.

Currently, various forms of food retail exist in Kyiv and wider Ukraine, including
hypermarkets, supermarkets, discount stores, convenience stores, grocery shops and
specialist food shops.11 The greatest proportion of expenditure occurs in hypermarkets and
supermarkets, although very closely followed by discount stores.12 Convenience stores
receive approximately one tenth the revenue of hypermarkets, but are an important
distribution avenue due to the vast number of existing outlets – in 2009, there were 21,
921 convenience stores in Ukraine compared to 64 hypermarkets and 662 supermarkets.13
However urban populations are increasingly purchasing from hypermarkets, supermarkets
and discount stores, where products are generally of higher quality and expiry dates are
well marked. Consequently, Tim Tams should purchase shelf space in each of these as well
as a considerable portion of the convenience stores, particularly as shelf space has
become more affordable post GFC following a fall in demand. Extensive coverage of
independent convenience stores is unnecessary but should include organized outlets such
as those covered by the Bumi Market group, a subsidiary of Fozzy Group, Ukraine’s largest
mass grocery retailer.

Finally, Arnott’s should engage a confectionary distributor or dealer as an intermediary

during the distribution process. These are both appropriate avenues due to their long-term
nature, local market knowledge and ability to provide support in promotional efforts. In
addition, as Tim Tams are relatively simple to sell, requiring no explanation of product
features or after sales service, the selection of intermediaries is quite broad. As Arnott’s
lacks market experience and relational networks in Ukraine, it is vital to engage a
distributor or dealer at the initial stage. The activities of the intermediary must then be
incentivized by sales-based commissions and the likelihood of an ongoing relationship,
with a possibility of reaching an exclusivity agreement subject to satisfactory performance
over time. Moreover, a further benefit of distributor and dealerships will be Arnott’s ability
to retain a high degree of control nonetheless and exercise some degree of price
authority. However commissions may make it worthwhile at a later point to internally
establish an export section and export directly to Ukrainian retailers, foregoing
commission costs.

Over the long term, local production may also be more efficient when sales levels are
sufficiently high to render it worthwhile to erect a production base. In particular, pending
establishment of a Ukraine- Europe free trade agreement, it may be possible to export to
other parts of the EU through the same production facility.
11
Swedish Trade Council. 2008. The Ukrainian Food Market. Retrieved from http://www.swedishtrade.se/
12
Business Monitor International. (May, 2010). Ukraine Food & Drink Report – Q3 2010. Retrieved from
http://proquest.umi.com/
13
Business Monitor International. (May, 2010). Ukraine Food & Drink Report – Q3 2010. Retrieved from
http://proquest.umi.com/

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The placement of the product once in the retail outlet is ideally amongst other chocolate
biscuits, taking up several rows a little below eye level. In supermarkets and
hypermarkets, aisle ends or special product display areas should be pursued to make the
product highly visible in order to have an impact on shoppers, particularly while the
advertising campaign is underway.

Price
In order to facilitate entry into a highly saturated confectionary market, Tim Tams must
initially target a near-parity price strategy with the objective of capturing market share
from its competitors at the premium end of the chocolate and biscuit markets. Currently,
prices of premium chocolate range between UAH40-UAH60 for a 200g portion,14 while the
price range of premium biscuits is slightly lower but vary within a similar scope. On this
basis, the initial target price per packet of Tim Tams will lie between UAH40-UAH50,
positioning the product on the premium end of the spectrum but offering a competitively
priced, quality alternative to existing producers such as Ferrero and Roshen. The resulting
strategy is thus a mild variation to the penetration pricing strategy, with the specific
objective of capturing market share in the premium end of the market but avoiding
negative value perceptions otherwise associated with low pricing. Importantly, this
strategy augments the marketing of Tim Tams toward female consumers with both
purchasing power and the desire for premium quality, yet acknowledges the important of
price considerations caused by the economic conditions post-GFC.

Following the establishment of an initial foothold however, the attainment of a stronger

brand image, growing brand loyalty and improving economic conditions, are expected to
justify an increase in price after a 6-12 month period. This will assist to reinforce the
positioning of Tim Tams as a premium product, with sustained demand from the targeted
market.

14
Prices estimated from online grocer Svit Gurmana as at 13 October 2010. See:
http://www.svitgurmana.com.ua/

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V Feasibility Analysis
The bulk of initial outlays take the form of fixed costs allocated toward market research,
product adaptation and importantly, marketing expenses. Based on a shelf price of UAH45
(AUD$5.77) per packet, preliminary forecasts have been developed which suggest that
approximately 454,000 packets of Tim Tams must be sold in order to breakeven. This is
expected to occur very early into the 5th month after entry, when monthly sales should
begin to peak and at the conclusion of 12months, the target market share of 5% is
expected to be attained.

Based on these indications, the export of Tim Tams appears quite financially viable, with a
target profit of AUD$6.64m in the first year, accounting for 5% of the chocolate coated-
biscuits market share. In particular, the recent strong performance of the AUD enables
relatively lower fixed costs in relation to market research and product promotion. The

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resulting strategy will not only produce substantial export profits, but confers additional
intangible benefits to Arnott’s such as the strategic location of Ukraine for access to the
EU and Russia and the opportunity for the company to accumulate exporting knowledge.

Therefore, noting the excess production capacity from both Arnott’s existing Australian
and newly built US production sites,15 Tim Tams’ export to Ukraine is well within the
company’s financial capability. No currency hedging will presently be necessary, rather,
any weakening of the AUD would produce greater profit in dollar terms as the UAH
strengthens.

Detailed forecasts are provided below.

Table 1: Costs Breakdown per Unit

15
See Palmer, D. (March 30, 2009). ‘Arnott’s invests $37million on Upgrade to further International
Expansion Efforts’. Australian Food News. Retrieved from http://www.ausfoodnews.com.au.

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35,000 140,000
Variable units (1 units (4 560,000 1,120,000
Costs/Packet Container Containers units (16 units (32
($AUD) ) ) Containers) Containers)

Product Modification 0.2 0.15 0.1 0.08

and Packaging
Factory price 0.8 0.6 0.4 0.3
Domestic freight to 0.4 0.4 0.4 0.4
Port
Export documentation, 0.2 0.2 0.2 0.2
tariffs and other duties
International freight 1.2 1.2 1.2 1.2
and insurance
Sub Total 2.8 2.55 2.3 2.18

+ Wholesaler markup 3.22 2.93 2.645 2.507

(15%)
+ Retail markup (50%) 4.83 4.4 3.9675 3.7605
+ Distributor 5.313 4.84 4.36425 4.13655
Commission (10%)

Total Cost Price 41.44 37.76 34.04115 32.26509

(UAH)

Target Sales Price 45 45 45 45

(UAH)
Target Sales Price
($AUD) 5.77 5.77 5.77 5.77

- Exchange rates are based on UAH7.8 = 1AUD.

- Cost savings due to economies of scale effects are loosely approximated to a logarithmic pattern
- Total cost prices have accounted for a distribution channel that encompasses all three levels of
intermediaries. Intermediary costs are likely to reduce over time as market familiarity increases.

Table 2: Fixed Costs

Function Estimated Costs

($AUD)
Market Research 10,000

Fixed Product Adaptation Costs (e.g. Redesigning of product, 12,000

equipment modification etc.)
Promotion Costs (e.g. Television, Billboards, Metro Ads) 400,000

Total Fixed Costs 422, 000

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Note: Promotion costs are largely Kyiv-centric and represent a 12-month estimate on the basis of current AUD/UAH
exchange rates.
Table 3: Scenario Analysis: 1-Year Profit/Loss Projections

(Target Market Share is highlighted and losses are underlined. All Items are in
$AUD.)

Units Sold (000s)

50 100 200 500 1,000 4,332.7 8,665.51
5
Revenue 288,500 577,000 1,154,0 2,885,00 5,770,00 25,450,0 50,900,000
($5.77/unit 00 0 0 00
)
Market 0.057% 0.11% 0.22% 0.57% 1.13% 5.0% 10.0%
Share
Total $140,00 $280,00 $510,00 $1,275,0 $2,300,0 $9,615,4 $19,230,84
Costs of 0 0 0 00 00 25 9.22
Export
and
Productio
n
Intermedi $125,50 $251,00 458,000 1,145,00 2,060,00 $8,645,0 $17,290,12
ary Costs 0 0 0 0 61 1.32
(Cost Price
- Cost of
Export and
Production
)
Fixed $422,00 $422,00 $422,00 $422,00 $422,00 $422,00 $422,000
Costs 0 0 0 0 0 0

Earnings - - - $43,00 $988,0 $6,767, $13,957,0

before $399,0 $376,0 $236,0 0 00 515 29
Tax (AUD) 00 00 00

Note:
- ‘Total Costs of Export and Production’ and ‘intermediary costs’ are based on the values projected in Tables 1
and 2, multiplied by the respective units.
- Price per unit is AUD$5.77 or UAH45.

Table 4: Break-Even Point

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Breakeven is achieved when Fixed Costs – Profits = 0

Profit per unit
Sale price – Total cost price = $5.77 – $4.84 = $0.93
At Break-Even:

$ 422,000 – Profits = 0
$422,000 = Profits
$422,000 = No. of units x $0.93/unit
$422,000 /$0.93 =453,763 units

Graph 5: Sales Projections to Meet Target Market Share (5%)

Note:
- Current sales volumes of Tim Tams in Australia are estimated at 35million packets per year. The target
volume of 4.3m is therefore relatively feasible.

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VI Plan Summary

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Target Market: Women, Middle to Upper Class, Working, Aged

25-40

Export Strategy: Indirect export via distributor or dealership

with commission incentives.

Marketing Strategy –

Product: Introduction of basic flavours (milk and dark

chocolate), relabeling and slight alteration of name to ‘Tiм Taм'

Promotion: Television ads, billboards, metro , with possible

association to tea or coffee to leverage popularity of hot drinks.

Placement: Distributed through intermediaries to

hypermarkets, supermarkets, discount stores and convenience

stores that are part of an organized retail chain.

Pricing: Prices at lower end of premium confectionary spectrum,

targeting market share of existing premium producers.

Variation of penetration pricing.

Feasibility: Pricing allows breakeven after approximately 5

months, or 454 thousand packets. Highly feasible, with easy

exit option since exporting.

We anticipate that Arnott’s will achieve a strong entry

under this strategy.

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Bibliography
Data Sources

Business Monitor International. (May, 2010). Ukraine Food & Drink Report – Q3 2010.
Retrieved from http://proquest.umi.com/

Business Monitor International. (May, 2010). Telecommunications Report – Q2 2010.

Retrieved from http://proquest.umi.com/

Euromonitor International. 2009. Chocolate Confectionary - Ukraine. Retrieved from

http://www.portal.euromonitor.com/

Euromonitor International. (November, 2009). Biscuits - Ukraine. Retrieved from

http://www.portal.euromonitor.com/

Euromonitor International. (December 2, 2009). Packaged Food – Ukraine. Retrieved from

http://www.portal.euromonitor.com/

Euromonitor International. (May 22, 2008). Ukraine Income & Expenditure. Retrieved from
http://www.portal.euromonitor.com/

Health Benefits of Chocolate (2009), retrieved from

http://longevity.about.com/od/lifelongnutrition/p/chocolate.htm

Journalism Network, Ukraine – Media Landscape, retrieved from

http://www.journalismnetwork.eu/index.php/_en/country_profiles/ukraine/

Just-Food.com (June 22, 2004). “Campbell Arnott’s eyes Asian Expansion” Aroq Ltd.
Retrieved from http://www. just-food.com/

Kyiv Post (2009), Kyiv decides to spend Hr 20.2 million on 50 anniversary of metro,
retrieved from
http://www.kyivpost.com/news/city/detail/56121/#ixzz12LD5GZ3xhttp://www.kyivpost.com
/news/city/detail/56121/

Overview of Ukrainian TV Broadcasting Market, retrieved from

http://www.horizoncapital.com.ua/files/sectors/Ukr.%20TV%20Broadcasting%20Market.pdf

Palmer, D. (March 30, 2009). ‘Arnott’s invests $37million on Upgrade to further

International Expansion Efforts’. Australian Food News. Retrieved from
http://www.ausfoodnews.com.au/

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Palmer, D. (November 24, 2009). ‘Campbell Raises 2010 Guidance, Tim Tam Sales boost
Aussie Performance’. Australian Food News. Retrieved from
http://www.ausfoodnews.com.au/

Dr. Sunanda Sangwan, Advertising in Emerging Markets: Consumer Attitudes in Ukraine,

Institute of International Economics and Management Copenhagen Business School,
retrieved from http://openarchive.cbs.dk/bitstream/handle/10398/6522/wp11.pdf?
sequence=1

Swedish Trade Council. 2008. The Ukrainian Food Market. Retrieved from
http://www.swedishtrade.se/

United States Department of Agriculture. (February 3, 2010). Ukraine Retail Foods Slow
Down after Rapid Expansion. Retrieved from http://gain.fas.usda.gov/

United States Department of Agriculture. (July 21, 2009). Ukraine Food and Agricultural
Import Regulations and Standards - Narrative . Retrieved from http://gain.fas.usda.gov/

World Bank and International Finance Cooperation. 2010. Doing Business 2010 – Ukraine.
Retrieved from http://www.doingbusiness.org/

Textbooks

Dann, S. & Dann , S. (2007) Competitive Marketing Strategy. Frenchs Forest, NSW:
Pearson Education Australia.

Cateora, P., Graham, J., Sullivan Mort, G., D’Sousz, C., Taghian, M. and Weerwardena, J.
(2009) International Marketing. North Ryde, NSW: McGraw-Hill Australia.

2010 Students Nos: u4535682 | u4314466 | u4526087

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Strategy

Appendix
Appendix 1.1
Illustration of choice of distribution in Ukrainian food retail market:

TIM
TAMS
IMPORT
ER

ARNOT
TS

Modified from: Swedish Trade Council. 2008. The Ukrainian Food Market. Retrieved from
http://www.swedishtrade.se/

Years 1-3: Distribution path of Tim Tams within Short Term

Years 4+: Target distribution path of Tim Tams over Long Term

2010 Students Nos: u4535682 | u4314466 | u4526087