PRAGUE UNIVERSITY OF ECONOMICS AND BUSINESS
DIPLOMA THESIS
2020 Bc. Zuzana Bojnanská
Prague University of Economics and Business
International Business – Central European Business Realities
Market Entry Strategy for Mixit s.r.o. for Germany
Author: Bc. Zuzana Bojnanská
Thesis instructor: Ing. Markéta Lhotáková, Ph.D.
Scholar year: 2020/2021
Declaration:
I hereby declare that I am the sole author of the thesis entitled “Market Entry Strategy for Mixit s.r.o. for Germany”. I duly marked out all quotations. The used literature and sources are stated in the attached list of references.
In Piešťany on 27.04.2021 Signature:
Acknowledgement
I hereby wish to express my appreciation and gratitude to my thesis supervisor, Ing.
Markéta Lhotáková, Ph.D., for her time and the valuable insights she provided to me during the writing of this thesis.
Abstract
The main objective of this Diploma thesis is to design an appropriate market entry strategy for the German market for company Mixit s.r.o.; therefore, the proposed strategy respects the local specificities of the German market and consumers. The thesis is divided into seven chapters. The first three chapters review analytical frameworks and theory of market segmentation, targeting and positioning, which is inevitable for strategy design, and provides an overview of current nutritional trends influencing consumer behaviour. The empirical part of the thesis includes an internal analysis of Mixit s.r.o. utilised to identify its strategy and competitive advantages in the domestic Czech market. The subsequent analysis of the German market for muesli and other grain-based products is complemented by the results of primary quantitative as well as qualitative research conducted among German consumers. The outcome of this thesis is the choice of the target segment and the proposition of the marketing strategy appropriate for the market entry of company Mixit s.r.o. to Germany considering the results of the performed analyses and conducted survey.
Key Words
Nutritional trends, Mixit s.r.o., German, market for muesli and other grain-based products, marketing strategy, market entry strategy, marketing mix adaptation, product personalisation
Abstrakt
Hlavním cílem této diplomové práce je navrhnou vhodnou strategii pro vstup na Německý trh pro společnost Mixit s.r.o., proto navrhnuté strategie respektuje lokální osobitosti jak Německého trhu, tak spotřebitele. Práce je rozdělena do sedmi kapitol. První tři kapitoly poskytují přehled teorie tržních analýz, segmentace, targetingu a positioningu, nezbytných pro vytvoření strategie, a současných trendů ve zdravé výživě, které ovlivňují spotřební chování. Praktická část práce zahrnuje vnitřní analýzu společnosti Mixit s.r.o. provedenou za účelem identifikace její strategie a konkurenčních výhod na domácím Českém trhu.
Následující analýza Německého trhu pro müsli a další cereální produkty je doplněna o výsledky primárního kvantitativního i kvalitativního průzkumu provedeného mezi Německými spotřebiteli. Výsledkem práce je návrh vhodné marketingové strategie pro vstup společnosti Mixit s.r.o. na Německý trh s ohledem na výsledky provedených analýz a vykonaného průzkumu.
Klíčová slova
Trendy ve výživě, Mixit s.r.o., německý trh pro müsli a další cereální produkty, marketingová strategie, strategie pro vstup na trh, adaptace marketingového mixu, personalizace produktu
1 Content
Introduction ... 7
1 Analyses of Internal and External Environment ... 9
1.1 VRIO Framework ... 9
1.2 PESTEL Framework ... 10
1.3 Porter's Model of Five Forces ... 11
1.4 SWOT Analysis ... 13
2 Market Segmentation, Targeting and Positioning ... 14
2.1 Segmentation ... 14
2.2 Targeting ... 19
2.3 Positioning ... 20
3 Current Nutritional Trends ... 22
3.1 Nutritional and Related Trends ... 22
3.2 Implications for Purchasing Behaviour ... 25
4 Analysis of Mixit s.r.o. on the Czech market ... 28
4.1 Introduction of Mixit s.r.o. ... 28
4.2 Marketing Mix ... 29
4.2.1 Portfolio Analysis ... 29
4.2.2 Place ... 31
4.2.3 Price ... 33
4.2.4 Communication ... 33
4.3 VRIO Analysis of Mixit s.r.o. ... 35
5 Analysis of the German Market ... 38
5.1 PESTEL Analysis ... 38
5.1.1 Political Factors ... 38
5.1.2 Economic Factors ... 40
5.1.3 Socio-cultural Factors ... 41
2
5.1.4 Technological Factors... 43
5.1.5 Ecological Factors ... 44
5.1.6 Legal Factors ... 46
5.1.7 Summary of the Findings of the PESTEL Analysis ... 47
5.2 Porter's Model of Five Forces ... 48
5.2.1 Bargaining Power of Suppliers ... 49
5.2.2 Bargaining Power of Buyers ... 50
5.2.3 Threat of Substitutes ... 51
5.2.4 Threat of New Entrants... 52
5.2.5 Competitive Rivalry among Existing Competitors ... 53
5.2.6 Summary of the Findings of Porter's Model of Five Forces ... 55
6 Primary Research ... 58
6.1 Quantitative Research ... 58
6.2 Findings and Implications of the Quantitative Research ... 59
6.3 Qualitative Research ... 63
6.4 Findings and Implications of the Qualitative Research ... 63
6.5 Summary of the Primary Research ... 65
7 Market Entry Strategy for Mixit s.r.o. to Germany ... 67
7.1 SWOT Analysis ... 67
7.2 Segmentation, Targeting, Positioning in German Market ... 69
7.3 Competitive landscape ... 73
7.4 Market Entry Strategy ... 78
7.4.1 Product Adaptation ... 79
7.4.2 Place Adaptation ... 80
7.4.3 Price Adaptation ... 82
7.4.4 Communication Adaptation ... 82
Conclusion ... 87
3
References ... 90
Appendices ... 104
Appendix 1 Evaluation Tables for Porter’s Model of Five Forces ... 104
Appendix 2 Questionnaire ... 111
Appendix 3 Interview Questions & Answers ... 117
List of Figures
Figure 1 Implementation of VRIO Framework ... 10Figure 2 Porter's Model of Five Forces ... 13
Figure 3 Segmentation Variables ... 15
Figure 4 VALS Framework ... 18
Figure 5 Ranking of the Grocery Retailers according to Sales (in Mio. EUR) ... 24
Figure 6 Logo Variants ... 28
Figure 7 Development of Mixit s.r.o. Revenues (in Mio CZK) ... 29
Figure 8 Portfolio of Mixit s.r.o. ... 31
Figure 9 Mixit Vending Machine ... 32
Figure 10 Sample of Mixit s.r.o. Communication Style ... 34
Figure 11 In-store Promotion ... 34
Figure 12 Attributes Influencing Consumers’ Choice of Muesli ... 60
Figure 13 Information Sources Influencing the Decision Making ... 61
Figure 14 Consumers' Projection of Acceptable Price ... 62
Figure 15 SWOT Analysis for Mixit Entry to German Market ... 67
Figure 16 Buyer persona 1 ... 71
Figure 17 Buyer Persona 2 ... 72
Figure 18 Kellogg's Logo ... 73
Figure 19 Cereal Partners Worldwide Logo ... 74
Figure 20 Vitalis Logo ... 75
Figure 21 Kölln Logo ... 75
Figure 22 Seitenbacher Logo ... 76
Figure 23 Alnatura Logo ... 77
Figure 24 mymuesli Logo ... 77
Figure 25 Positioning Map ... 78
Figure 26 Mixit Packaging Adaptation to Eco-box ... 80
4
Figure 27 Storyboard for Slice-of-life for Persona Mattias ... 84
Figure 28 Storyboarch for Slice-of-life for Persona Michaella ... 84
Figure 29 In-store Sampling during Product Launch ... 86
List of Tables
Table 1 VRIO Analysis of Mixit s.r.o. ... 36Table 2 Political Factors ... 39
Table 3 Economic Factors ... 41
Table 4 Socio-cultural Factors ... 43
Table 5 Technological Factors ... 44
Table 6 Ecological Factors ... 45
Table 7 Legal Factors ... 47
Table 8 Bargaining Power of Suppliers ... 49
Table 9 Bargaining Power of Buyers ... 50
Table 10 Threat of Substitutes ... 51
Table 11 Threat of New Entrants ... 53
Table 12 Competitive Rivalry among Existing Competitors ... 55
Table 13 Overview of Five Competitive Forces ... 57
5
List of Abbreviations
BMEL Bundesministerium für Ernährung und Landwirtschaft (Federal Ministry of Food and Agriculture)
ca. circa
CEFF Certified E-Friendly Food COVID-19 Coronavirus disease 2019
CP Competitive parity
CZK Czech Crown
e.g. for example
ETOP Environmental Threat and Opportunity Profile
EU European Union
EUR Euro
GDP Gross Domestic Product
HACCP Hazard Analysis and Critical Control Points ICT Internet and Communication Technologies LLC Limited Liability Company
LOHAS Lifestyles of Health and Sustainability
Mio million
PESTEL Political, Economic, Social, Technological, Environmental, Legal
PR Public Relations
Q&A Questions and Answers
s.r.o. Společnost s ručením omezeným (Limited Liability Company) SCA Sustainable competitive advantage
SWOT Strengths, Weaknesses, Opportunities, Threats TCA Temporary competitive advantage
6 UCA Unused competitive advantage
VALS Values and Lifestyles
VAT Value-added Tax
VRIO Value, Rarity, Imitability, Organization
7
Introduction
Despite classifying Mixit s.r.o. as a small or middle-sized Czech-based enterprise, its business concept and market performance have promoted significant growth in revenues in recent years, which consequently resulted in multiple expansions to the foreign markets.
The success of the mentioned expansions increases the profitability of the brand and encourages it to expand further to other promising markets. Therefore, the main objective of this Diploma thesis is to design the market entry strategy for Mixit s.r.o. to successfully enter the German market, which has been reasonably appointed as a target market due to its geographical closeness, size and strong business ties to the Czech Republic.
The first part of the thesis introduces the theoretical background to the analyses generally utilised in the analysis of the internal and external environment of a company as well as the segmentation, targeting and positioning processes in order to identify the strengths and weaknesses of a company determining its ability to seize the market opportunities and mitigate the threats related to business operation in the particular market by targeting the appropriate market segment. Furthermore, the thesis presents current nutritional trends of snackification, healthy hedonism and preference of the foods with labelled functional benefits emerging from the increased interest in healthy nutrition and particular diets, which impact the consumer preference within the target muesli and other grain-based products industry. Since this thesis has been completed during the COVID-19 pandemic, the thesis respectively considers the online groceries delivery and the beyond plastic trends as all of the listed trends determine the readiness of the target market for the personalised premium muesli product.
The second part of the thesis presents the results of the conducted analyses utilizing the secondary data retrieved from the statistical offices, reports of the internationally respected institutions and publicly available corporate data. Thereby, the thesis fulfils the secondary objective of the analysis of the Mixit s.r.o. in the domestic Czech market and assessment of the suitability of its competitive advantages for the market entry to Germany based on the contrasting the corporate strengths and weaknesses with the conclusions of the industry and market analyses in the SWOT matrix. Moreover, analyses results are complemented by the primary research conducted among the general German public in order to gather insights regarding the dietary preferences and purchasing behaviour of the potential consumers and in order to define an appropriate target consumer segment, which is ready and accepting towards the products with attributes relevant to Mixit muesli line.
8 Consequently, the proposition of the market entry strategy is based on the gathered data from both secondary and primary research and considers the strategies of the direct market competitors as it proves to be inevitable to distinguish from them to establish a sustainable market position.
9
1 Analyses of Internal and External Environment
The primary objective of this thesis is to design the appropriate market entry strategy to reach the most suitable market segment. Therefore, data collecting by means of internal and external analyses presents an inevitable step in the strategy designing process. The internal analyses comprise frameworks designed to analyse a company itself and company- related factors, whereas the external analyses are intended to analyse the external factors influencing the business conditions on the target market.
1.1 VRIO Framework
The VRIO framework presents a tool for internal analysis of company resources, including tangible and intangible assets as well as employees’ skills and capabilities and their allocation within the organizational structure of a company. Furthermore, the framework assesses how valuable and rare these resources are and the costliness of their imitation as they significantly influence the company performance and competitiveness.
Therefore, it is advisable for a company to adopt a differentiation strategy to accumulate resources which are (Miller, 2010; Rothaermel, 2018):
Valuable – either increase the created economic value or enable a company to offset the competitors' competitive advantages and mitigate the external threats,
Rare - not commonly owned; thus, the number of companies owning the particular resource is lower than the number of companies lacking the resource,
Costly to imitate – either other companies are not able to develop the particular resource themselves or the expenses incurred by the purchase of the resource would be higher than reasonable.
Provided that the company resources are valuable, rare and costly to imitate, the company has to implement an efficient organizational structure, coordinating and control systems in order to capture the value and effectively develop the potential of competitive advantage formed by the resources. (Marquardt et al., 2019; Rothaermel, 2018)
Therefore, the VRIO analysis results identify the strengths and weaknesses of a company underpinning its competitive advantage in the market, as depicted in Figure 1 below. Furthermore, the complementation of the VRIO analysis results to the results of the external analyses of the market in the SWOT matrix provides the complex and
10 considerably detailed overview of the competitive position of a company in the given market that should be considered in the market entry strategy proposition. (Wysocki, 2019) Figure 1 Implementation of VRIO Framework
Source: Rothaermel - Strategic Management, 2018 1.2 PESTEL Framework
The PESTEL framework is the most commonly utilised tool for the external environment analysis and the considered factors that influence the strategy development employing the identified market opportunities and threats. The framework generally comprises factors with a considerable level of impact on a company's performance and that at the same time are not directly influenceable by it. (James Cadle et al., 2010) Furthermore, the utilisation of the Environmental Threat and Opportunity Profile technique, further ETOP, allows for the classification of the effect factors have upon the company’s performance as positive, neutral or negative. (Keřkovský and Vykypěl, 2006) However, based on the proximity of the factors and managers’ influence over them, factors are related to either the general environment, and distanced factors out of managers' influence, or the task environment, and factors closely related to the company and slight influence of managers over them. Division of external environment factors proposes six groups, namely (James Cadle et al., 2010; Peng and Nunes, 2009; Rothaermel, 2018;
Sammut‐Bonnici and Galea, 2015):
Political factors – comprise factors from the general environment such as implemented governmental policies and legislation in force, yet companies tend to adopt strategies featuring lobbying, contributions and PR activities in order to change the public opinion in a favourable manner and consequently elicit the change in the legislation and regulations concerned; moreover, the development of multinational bodies and organizations widened the scope of this category beyond the national
11 framework to the supranational scope congruent with the sphere of influence of the multinational institutions,
Economic factors – comprise macroeconomic factors from the general environment;
the economic growth, employment and interest rates as well as inflation levels and fluctuation of exchange rates belong to the most influential factors from this group,
Socio-cultural factors – the constant flux and significant importance for segmentation, targeting and positioning processes are characteristic features of this group of factors as they comprise demographics, values, social norms as well as the consumption trends and culture, which systematic analysis can be performed according to the Hofstede's cultural dimensions model as these dimensions impact consumer behaviour considerably,
Technological factors – comprise distribution, technological as well as scientific inventions, breakthroughs and their applicability potential in the business and value creation processes, such as lean manufacturing, just-in-time supplies delivery, materials with enhanced features and engineering innovations in automation,
Environmental factors –interrelate closely with the business activities and externalities; therefore, this group of factors can be assigned to the task environment;
the prominence of sustainability and environment protection within this group implies the close relation of the environmental, legal and political factors,
Legal factors – comprise factors such as regulations, court decisions and particular laws with direct impact on the business operations and profitability; therefore, legal factors are closely related to the political factors; thus, the supranational impact of legal factors has to be analysed.
1.3 Porter's Model of Five Forces
Porter's model of five forces presents a framework for the assessment of the attractiveness of the particular industry, in terms of its expected profitability potential and the intensity of the competition within the given industry, which present the decisive factors in the establishment of the sustainable competitive advantage. (Rothaermel, 2018;
Schmarzo and Schmarzo, 2013) Therefore, the outcome of this model implies the basis for the entry strategy, especially to the developed mature markets, and brand positioning by identifying threads and opportunities proposed by the industry. (McDonald and Wilson,
12 2016; Wysocki, 2019) The weaker the considered forces are, the more attractive the industry is. The forces are namely (James Cadle et al., 2010; Rothaermel, 2018):
Bargaining power of suppliers – the influence of suppliers over the production costs by means of the prices of the supplies, the scarcity and specificity of supplies, scarcity of suppliers and absence of substitutes leverages this power,
Bargaining power of buyers – the producers' ability to bargain favourable prices of resources and thus maximize their margins, the power is leveraged by high-volume purchases of standardised substitutable supplies, absence of switching costs and the possibility of backwards integration of producers into the production of supplies,
Threat of substitutes – the existence of appropriate substitutes outside of the particular industry increases the price sensitivity of the final consumers, thus limits the producers' profit margins, the acceptable substitute price-performance trade-offs and absence of consumer switching cots amplify this threat,
Threat of new entrants – the expected intensification of competition within the industry implies the increase of company expenses and reduction of profit, the threat is reduced by entry barriers incurring higher entry costs, e.g. economies of scale, required initial capital investment, restrictive government policy and size-unrelated competitive advantages,
Competitive rivalry among existing competitors – rivalry is bolstered by the forces mentioned above and the competitive structure of an industry, industry growth rate, exit barriers and strategic commitments; the rivalry intensifies both price and non- price competition and consequently industry profit potential.
13 Figure 2 Porter's Model of Five Forces
Source: James Cadle et al. - Business Strategy and Objectives, 2010 1.4 SWOT Analysis
Performing the SWOT analysis facilitates obtaining actionable insights for the strategy proposition by consolidating and systematically processing the results of the analyses of the internal and external environment. The internal environment analysis results align with the strengths and weaknesses quadrants, whereas the results of the analysis of the external environment present the market opportunities and threats. (Rothaermel, 2018; Wysocki, 2019) Therefore, the authors recommend following one of the four following alternatives for the strategy design (McDonald and Wilson, 2016; Rothaermel, 2018):
Strengths-Opportunities alternative – focused on the exploitation of the market opportunities fully utilising internal strengths,
Weaknesses-Threats alternative – focused on the mitigation of the internal weaknesses to eliminate the impact of the external threats on the company performance,
Strengths-Threats alternative – focused on the active use of internal strengths to mitigate the impact of external threats,
Weaknesses-Opportunities alternative – focused on sizing the external opportunities to eliminate internal weaknesses.
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2 Market Segmentation, Targeting and Positioning
Since one of the secondary objectives of this thesis is to define the suitable target consumer segment for Mixit s.r.o. on the German market, the performance of market segmentation and the subsequent choice of the most relevant target segment present inevitable steps in the proposition of the market entry strategy. Therefore, the following chapter reviews the theoretical background to the segmentation, targeting and positioning methods utilised further in the thesis to design the relevant market entry strategy.
2.1 Segmentation
Market segmentation presents the first step in the marketing strategy preparation. In the segmentation process, the target market is divided into coherent, substantial, distinctive, relevant, accessible and actionable segments comprising consumers sharing common features and behavioural patterns diminishing customers' heterogeneity. (Dibb, 1998) Furthermore, organising consumers into segments imposes the requirements for marketing communication in order to reach a particular segment through media channels and messages. (Dibb, 1998; Král et al., 2016) Therefore, the establishment of effective marketing communication relies on the precise market segmentation since consumers within a given segment are expected to react to marketing communication and stimuli distinctively compared to other segments.
In order to segment the target market properly and thoroughly, segmentation is performed owing to the adopted geographic, demographic, socio-economic, behavioural and psychographic variables relevant for the product or service offered. (Pelsmacker et al., 2013, 122-3) Consequently, segmentation variables organized in the geographic, demographic and socio-economic sub-groups comprise solely descriptive data about consumers, which can be easily obtained from publicly accessible secondary sources, such as statistical offices or reports. However, these descriptive data neither influence consumer purchasing behaviour nor promote their inner motivation for the purchase. Therefore, distinguishing data points for the sub-groups mentioned above are utilised solely to create persona skeletons or so-called descriptive profiles, and particular skeletons should be subsequently prioritized in accordance with the company strategy. (Adlin and Pruitt, 2010) Contrary to descriptive variables, behavioural variables provide specific data about the target consumers. However, in order to obtain relevant data for these variables, primary research has to be conducted utilizing various qualitative, e.g. interviews, and quantitative
15 methods, e.g. questionnaire survey, implying increased expenditures. Moreover, collected personalised data provide detailed information regarding consumer inner motivation and purchasing behaviour inevitable for establishing the point of differentiation of a product or service compared to the competitors and for completing persona profiles. (Pelsmacker et al., 2013) These data can be further utilised along with the storytelling technique in the creation of buyer personas, or so called individualised profile, out of persona skeletons.
(Pruitt and Adlin, 2006)
Source: Own processing based on Král et al. - International marketing: theory, practices and new trends, 2016; Pelsmacker et al. - Marketing communications: a European perspective, 2013
Since the results of the segmentation process are utilised in the creation of segmentation profiles, they can be further employed for the assessment of the attractiveness of the market segment. (Pelsmacker et al., 2013) The segment attractiveness is objectively measured as a potential of a given segment to generate sales, and thus profit, in relation to other segments. The set of attractiveness determining factors has to be appointed specifically to the target market and further categorised into three groups, more precisely growth rate, accessible segment size and profit potential. However, in order to
Segmenation variables
Descriptive
Geographic
Region Country
City Climate Market density
Demographic
Age Sex Race Religion Family status
Socio- economic
Education Occupation
Income Social class Family size
Behavioural
Behavioural
Regularity of use Loyalty Benefit sought Purchase occasion
Usage ocassion Readiness status
Psychographic
Lifestyle Personality
Attitudes Values Beliefs Reference groups
Figure 3 Segmentation Variables
16 design a sustainable strategy, the time horizon and informed predictions about the segment size have to be considered in the attractiveness evaluation. (McDonald, 2012)
Moreover, in order to facilitate and unify the market segmentation process, various groups and institutions established the segmentation frameworks. One of the most commonly utilised frameworks is the Values and Lifestyles segmentation framework, further VALS, established as a result of the cooperation of Berkley and Stanford universities. The framework proposes a division of consumers into eight categories considering their primary motivation (ideals, achievement or self-expression) and resources (psychological, physical, demographic and material means and individual capacities in terms of education, income, self-confidence, health and energy levels) as the empirically proven decisive factors determining consumer purchasing behaviour on the market. (Saputra, 2019; Strategic Business Insights, 2020)
Even though the distribution of consumers among the eight categories is market- specific, and therefore needs to be checked prior to the selection of the target segment in a particular market, the VALS framework is applicable internationally since all of the consumer groups are present in each market with the following consumers' characteristics (Strategic Business Insights, 2020):
Innovators - motivated by ideals, achievement and self-expression, abundant in resources, confident, conduct the highest number of transactions, active consumers, experiment, self-directed and future-oriented individualists with international exposure, always informed, consider R&D and science to be credible and reliable sources yet sceptical towards advertising, highly receptive to technological innovations and novelties, enjoy a wide variety of activities,
Thinkers - motivated by ideals, abundant in resources, prefer traditional intellectual pursuits over trends, tend to view the world in the perspective of the historical values, value generally accepted social norms as benchmarks for individuals' behaviour, have significantly long decision-making process which can result in a tendency to suffer from analysis paralysis, conservative buyers of proven products, look for functionality and endurance rather than design,
Believers: motivated by ideals, have limited resources at their disposal, rely on spirituality and faith and communities they live in, adhere to traditional and conservative values, consider advertising to be a reliable source of information,
17 intolerant towards ambiguity of any sort, binge-watch soap operas and read romantic novels in order to escape reality, prefer social status quo over changes, considerably receptive to fast-fashion trends,
Achievers: motivated by achievement, abundant in resources, individualists considering money to be the source of authority, determined, punctual and goal- oriented professionals, advocate moderate ideas and opinions, favour technological innovations increasing productivity, prone to purchase premium and prestigious products, balance family and work life, consider peers and their opinions when making decisions,
Strivers: motivated by achievement, have limited resources at their disposal, frequently temporarily unemployed or have revolving employment, rely on public means of transport, active in the low-status street cultural sphere, tend to imitate their idols and role models by showing off their wealth through their appearance and aesthetics, consider money to be an indicator of success, strive to enhance their lives but struggle in making an actionable decision to achieve their goals, active impulsive consumers,
Experiencers: motivated by self-expression, abundant in resources, amiable and sociable considering friends to be of particular importance, seek sensation in any form, highly receptive and adaptive to fashion trends, have outstanding and distinctive aesthetics, react spontaneously, purchase eagerly and impulsively, especially responsive to visual simulation,
Makers: motivated by self-expression, have limited resources at their disposal, believe in traditional gender roles distribution, distrust government, sceptic towards innovations, highly protective towards their property, prefer land ownership and product value over prestige and luxury, interested in automotive and outdoor activities, e.g. fishing and hunting, perceived to be anti-intellectual and potentially quarrelsome by their surrounding,
Survivors: do not exhibit any primary motivation, lack resources, oldest risk-averse and thrifty consumers frequently making use of discounts, consoled by routine, loyal to familiar brands, tend to live in single households and spend time alone, heavy TV viewers, not likely to use internet or any advanced technology, most likely still to use a landline as the only telecommunication channel.
18 Source: Töpfer and Bug - Classical Consumer Lifestyle Segmentation Methods, 2015
Therefore, the primary benefit of the utilisation of the VALS framework in the segmentation process implies the advantage in the further targeting and positioning process as the choice of the appropriate VALS segment defines the subsequent selection of the relevant media channels and the style of marketing communication with the highest potential to reach and attract the target segment.
Moreover, considering designing a market entry strategy for a product within the premium healthy food category, it is advisable to analyse the orientation of consumers' lifestyle, e.g. to what extend potential customers are concerned with the healthiness of the products, social justice, sustainability as well as the environmental impact associated with its production. In order to facilitate the segmentation of the market according to these criteria, Natural Marketing Institute proposed in its report to segment the target market into five segments (Natural Marketing Institute, 2008; Schüpbach et al., 2007):
Lohas - most environmentally concerned, socially responsible, actively influencing their surrounding, politically active in environment protection, loyal customers, not price-sensitive, health-conscious and most likely to be flexitarian, vegetarian or vegan, earn a high income, well-educated, physically active, holistically active in the community, highly responsive to socially responsible corporate activities,
Figure 4 VALS Framework
19
Naturalites - prefer personal health and wellness to environment protection, avid consumers of organic and natural products, interested in being educated about environment protection and its potential future impact, low income restrains them from buying more eco-friendly products, lack higher or college education, prefer relaxing exercising, regularly attend community events,
Drifters - usually present the largest segment, frequently switch among the latest trends ranging from dietary to sustainability trends, impressionable customers, not loyal, inconsistent in environment protection, earn a moderate income, consider price to be the barrier to a sustainable and healthy lifestyle, active in team sports, sociable,
Conventionals - lead sustainable lifestyle yet motivated by practicality and frugality rather than environmental protection, educated, earn a considerably high income, gravitate towards conservative attitudes, engage in recycling and decreasing energy consumption,
Unconcerneds - evince no interest in environmental protection and sustainability, relatively educated, earn a rather low income, significantly price sensitive, not likely to participate in any community activities, not physically active, least responsive to socially responsible corporate activities.
Additionally, the eagerness of trying new eco-friendly products and the adoption of the latest trends is reported to be aligned with the level of concern about health and environmental protection. Therefore, Lohas are characterised as early adopters, followed by naturalites, conventional and drifters present early and late majority and unconcerneds are classified as laggards. (Natural Marketing Institute, 2008; Ottman, 2011)
Concerning the mature German market, the Lohas segment is continuously growing and currently comprises ca. 30 % of the population, representing a 50 % increase in the last five years. Therefore, the Lohas segment can be considered to be prominent in Germany.
Moreover, the persona skeleton for this segment was described by VuMA Touchpoints as a woman aged from 20 to 70 who completed higher education and currently earns higher income. However, the distribution of consumers among the particular age groups is equal.
(AS&S, 2020; VuMA Touchpoints, 2021) 2.2 Targeting
The targeting process refers to the selection of either the appropriate consumer segment or segments for the company's marketing strategy. The choice of the target
20 segment and corresponding targeting strategy has to be in line with the company's objectives as it considerably influences the image of the brand and product, or service, as well as the design of the proposed marketing campaign. Moreover, the choice of the segment, or potentially more segments, is influenced by its attractiveness in terms of size, growth potential, stability and structural attractiveness. However, the ability of the company to establish sustainable competitive advantage outweighs the segment attractiveness and thus can result in the choice of the niche segment as the target one despite its inferior size. (McDonald and Wilson, 2016; Pelsmacker et al., 2013)
Owing to the company objectives and budget, the company opts for the targeting strategy of either market concentration, differentiation or undefined targeting strategy, which are further divided into the following five basic types (Pelsmacker et al., 2013):
concentration on one segment - focused on the one selected market segment developing marketing mix accordingly to its specifics,
selective specialization - focused on several selected attractive segments developing separate marketing mixes for each,
product specialization - focused on providing a particular product/service to various market segments,
market specialization - focused on providing several products to one selected market segment,
full market coverage: focused on providing all products/services to all market segments.
Each of these strategies is associated with the use of different media channels for advertising, sales promotion tools, and PR activities. While a strategy of concentration is associated with a more targeted and personalised advertisement, celebrity endorsement, and premium features implying higher expenses, the undefined targeting strategy of full market coverage is related to the use of mass media and sales promotion tools such as coupons and discounts. (Czinkota and Ronkainen, 2010)
2.3 Positioning
The positioning process aims to establish a point of difference for the offered product or service in the minds of the targeted consumers in order to differentiate the particular product or service from its competitors. Therefore, the most prominent attributes relevant
21 for the target segment should be used as a basis for the positioning strategy since they are most likely to be defeated against competitors' attempts to emulate it. (Czinkota and Ronkainen, 2010; Pelsmacker et al., 2013; Tybout and Calkins, 2019)
Furthermore, the strategy should be summarised in the explicit positioning statement comprising the target consumer, frame of reference, point of differentiation and applied reasoning backing for belief in the product superiority. The frame of reference as well as the point of differentiation are developed from the mentioned prominent attributes and serve as either unique or emotional selling proposition of a product or service and may range from unique product features, price-quality ratio, specific use or application and specific target user to specific cultural symbols represented by the brand or its values.
Moreover, the positioning strategy has to respect the characteristics, consumption, and behavioural patterns of the targeted segment and consider consumers' perceptions, feelings, and impressions of the products comprised in the positioning map. (Czinkota and Ronkainen, 2010; Pelsmacker et al., 2013; Tybout and Calkins, 2019)
In order to depict the competitive position of the company in the target market, it is advisable to conduct the analysis of the competitors' positioning and map it on the descriptive two-dimensional diagram of perceptual mind map since the perception of a brand is influenced by its competitors' image. The dimensions should represent the points of differentiation and the strongest associations that the company intends to communicate via its communication strategy. Moreover, to increase the precision of the mapping, the sizing of the position indicator should correspond to the brand's market share. (Gronlund, 2013; Král et al., 2016; Riezebos and van der Grinten, 2012)
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3 Current Nutritional Trends
Thorough knowledge of the current market situation is considered crucial to assess the appropriateness and readiness of the target market for the introduction of a product or service and subsequently to design an appropriate market entry strategy. Therefore, the following chapter introduces current trends in nutrition on the German target market influencing purchasing behaviour of German consumers.
Since the COVID-19 pandemic significantly impacted current nutritional trends, they are expected to persist beyond the pandemic and proceed with shaping the German food industry. Therefore, the outcomes of the analysis of those trends and their implications for purchasing behaviour of German consumers provide a theoretical background for the design of an effective and sustainable market entry strategy.
3.1 Nutritional and Related Trends
Since diet choice significantly influences other food choices and purchasing behaviour, dietary trends can be considered the most influential trends in the food industry.
Therefore, the proposed market entry strategy should align with those trends. According to the survey conducted by research agency Kitchen Stories in December 2019 among German citizens. The survey results provide a comprehensive overview of the German market and state that the prevailing nutritional diet among Germans is the low carbohydrate diet followed by more than 33 % of respondents. Moreover, ca. 25 % of respondents have lately adopted a low sugar diet. However, the popularity of all the below mentioned dietary programs are on the increase (Statista, 2020a):
low carbohydrate diet – restricting consumption of carbohydrates to less than 20 % of the intake of calories per day (Last and Wilson, 2006),
low sugar diet – presenting a version of low carbohydrate diet considering sugar to be a type of carbohydrate (Last and Wilson, 2006),
vegan diet – restricting diet to solely plant-based products,
flexitarian diet – promoting increased consumption of fruits, vegetables, legumes, whole grains and plant-based protein while consuming the animal products in moderation, limiting the consumption of processed food and added sugar (Streit, 2019),
23
high protein diet – promoting high protein intake limiting the intake of carbohydrates (Fletcher, 2019),
high fibre diet – promoting consumption of 20-35 g of non-digestible plant fibre daily (Wolever and Jenkins, 1997).
Therefore, any product which is to be introduced on the German food market should advisably be in line with the mentioned dietary programs in order to have the potential to earn and maintain the market share.
Furthermore, according to the consulting company Expansion.eco, specialising in the assistance to companies by market entry to Germany, the online food trade, beyond plastic trend, the trend of functional food, healthy and tasty dietary trends, healthy hedonism and sustainability trend significantly prevail on the German market comparably to the global market. (Expansion.eco, 2020)
Firstly, according to the Statista Digital Market Outlook from June 2020, the share of online food sales in Germany has been growing steadily in recent years. However, the outbreak of the COVID-19 pandemic in spring 2020 boosted the online demand for food leading to a 22.6 % peak in sales revenues. Moreover, the growth and online food trend is projected to continue and demonstrate an annual growth of 7 % till 2024 and thus reach the total market volume of 393 Mio. EUR. (Statista, 2020b)
Consequently, according to EHI Retail Institute, the German research institute for retail, the rapidly increasing demand for online food delivery promoted the entry of small delivery providers specialised in serving the demand for specific products, e.g. vegan and vegetarian, to the market along with the biggest online supermarkets, e.g. Rewe, Edeka and AllyouneedFresh. (EHI Retail Institute, 2020) Moreover, these small or middle-sized delivery providers are not threatened by the biggest supermarket chains operating on the German market, e.g. Penny, Aldi and Kaufland, which do not provide the in-house grocery delivery service since they are competing among themselves in the considerably severe price war and providing such service would be too costly for them to implement.
(Deutsche Welle, 2018; Marlene Triltsch, 2020)
Therefore, any market entry strategy for a product to the German food market should advisably consider utilising the existing distribution channels of delivery providers, providing that their positioning is in line with the intended positioning of the market entry strategy.
24 Figure 5 Ranking of the Grocery Retailers according to Sales (in Mio. EUR)
Source: EHI Retail Institute - Lebensmittelhandel: Stabiles Wachstum, 2020
Furthermore, the increased demand for food packaging arising from growing online food deliveries and purchasing of packaged food presents a business challenge for the sustainability of business operation and production resulting in the trend reported by Rützler as beyond plastic. (Rützler, 2019) Additionally, the directive 2019/904 on reducing the use of single-use plastic, enforced by the European Union in June 2019, reinforced the influence of the beyond plastic trend on the German market. (Morrison, 2020) Therefore, the current situation in the food market presents a business opportunity for innovations in terms of reusable or recyclable food packaging, which would meet the customers' demand.
Therefore, the utilisation of this market opportunity should be reasonably implemented in the proposed market entry strategy, provided that the connection to the beyond plastic trend is in accordance with the product and brand image.
Moreover, the COVID-19 pandemic outbreak is reported to have reinforced the focus on healthy diet and nutrition, which were already clearly present in the German market in the pre-pandemic situation. Consequently, the Bundesministerium für Ernährung und Landwirtschaft, further BMEL, introduced the Nutri score in the form of ample nutrition and caloric labelling on the front of the packaging of the processed food. The Nutri score applies a five-degree scale from A, superior nutritional quality, to E, poor nutritional
25 quality. (Nestlé, n.d.) Additionally, producers were committed by BMEL to reducing sugar, fat, and salt content due to the consumers' interest in nutrition. (Bundesministerium für Ernährung und Landwirtschaft, 2020; forsa Politik- und Sozialforschung GmbH, 2020)
Despite the preference for nutrition, the trend of healthy hedonism impacted the dietary choices of German consumers during the pandemic. This hedonism trend implies that the choice of healthy and nutritious food should not compromise the indulgence and enjoyment of having a tasty meal. Therefore, the dietary version of regular groceries, e.g.
natural energy drinks, low-carbohydrate veggie fries and a wide variety of lactose-free dairy products, have become more prominent in the offer of regular grocery stores as well.
Moreover, the snackification trend complements the healthy hedonism trend by promoting the convenient and accessible healthy variants of the regular take-away fast food, e.g.
protein-rich vegan burger in a gluten-free bun. (Expansion.eco, 2019)
Moreover, the BMEL Ernährunsreport 2019/2020 reports the increasing importance of transparent product labelling following EU standards arising from the nutritional and sustainability criteria of German consumers. (Bundesministerium für Ernährung und Landwirtschaft, 2020; forsa Politik- und Sozialforschung GmbH, 2020)
3.2 Implications for Purchasing Behaviour
The trends mentioned in the previous subchapter 3.1 Nutritional and Related Trends have significant implications for the purchasing behaviour of German consumers.
Likewise, these purchasing behaviour patterns are expected to persist; therefore, it is advisable to consider these recent changes in the design of the market entry strategy.
Moreover, the adaptation of the strategy employed in the domestic Czech market to the altered purchasing behaviour will increase the company's competitiveness while entering the target German market and at the same time preserve the corporate image.
The Ernährungsreport 2019/2020 published by BMEL in May 2020 comprises the results of the interviews conducted with German citizens aged 14 and older since December 2019. The purpose of the research was to reveal how the new nutritional trends impacted the purchasing behaviour of the general public. Therefore, the Ernährungsreport 2019/2020 complemented by the reports and data published by statistical offices and institutions operating in the food industry can be considered to be the relevant and appropriate source of data regarding behavioural variables inevitable for the choice of effective positioning strategy and design of effective marketing strategy.
26 One of the most prominent implications developed from the online food sales trend is the significant increase of the consumers who have started to use the online food delivery service on a regular basis. According to the BMEL report, prior to the outbreak of the pandemic online food delivery services were utilised primarily by customers ageing from 25 to 43, generating ca. 20% of the industry revenues. However, the BMEL report indicated a considerably high increase of customers also among the more sceptic consumers from the age group from 55 to 64, providing a sign of social cohesion.
(Bundesministerium für Ernährung und Landwirtschaft, 2020; forsa Politik- und Sozialforschung GmbH, 2020; Statista, 2020c)
Furthermore, the BMEL report confirmed the implications of healthy diet and nutrition trend by reporting that the healthiness and nutritional value of the food are of the highest importance, likewise the taste, for 90 % of the survey respondents. (Bundesministerium für Ernährung und Landwirtschaft, 2020) In addition, ca. 60 % of German consumers are willing to pay increased prices for the groceries without artificial additives and preferably of rather organic quality. (Schneider, 2020) Moreover, the consumption of products with labelled functional benefits, e.g. immune system boost, has increased significantly since the outbreak of the pandemic of COVID-19. (Expansion.eco, 2020)
Additionally, the implications of the healthy hedonism trend are noticeable from the finding that the taste of the food is one of the main decisive factors taken into consideration also in the purchase of regular groceries for 98 % of Germans. (Bundesministerium für Ernährung und Landwirtschaft, 2020) In addition to the sustainable packaging and nutritional value, the quality of the food is still considered to be a significant factor influencing purchasing behaviour of the majority of German consumers resulting in the steadily increasing demand for high- and premium-quality products. (Expansion.eco, 2020) Moreover, the trend of being social and environmentally responsible is reported to remain present among German consumers who demonstrate their willingness to pay a premium price for the products meeting the specific quality criteria. Furthermore, by demanding products of the mentioned qualities, German consumers insist on the food producers to conduct their business activities in a socially and environmentally responsible manner. (Expansion.eco, 2020; Umweltbundesamt, 2020)
Consequently, the BMEL report confirmed the importance of labelling in the purchasing behaviour of German consumers since 51 % of the respondents of the
27 conducted survey confirmed that they are purchasing labelled products on a regular basis.
The trustworthiness of the product labelling was proven by the fact that 74 % of the consumers assess the safety and quality of the purchased food solely according to the product labels. The bio, fair trade and origin declaring labels are reported to be the most relevant for satisfying the German consumers' ecologic and social responsibility criteria.
Furthermore, the quality labels and labels informing about potentially allergenic ingredients are of significant importance in the decision-making process for 75 % of the interviewed consumers. Likewise, dietary labels regarding caloric, protein, carbohydrate and fat intake are of considerable importance for approximately 60 % of German consumers. (Bundesministerium für Ernährung und Landwirtschaft, 2020; forsa Politik- und Sozialforschung GmbH, 2020)
To conclude, implications of the current trend on the German food market for the purchasing behaviour imply that German consumers are currently demanding high-quality, tasty products labelled for their nutritional value and functional benefits produced in the socially and environmentally responsible manner delivered preferably directly to their homes.
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4 Analysis of Mixit s.r.o. on the Czech market
The following chapter focuses on the internal analysis of Mixit s.r.o., further referred to as Mixit, its target consumer segment and marketing strategy utilised in the domestic Czech market. Conducted analyses analyze data acquired from publicly available sources and personal research.
4.1 Introduction of Mixit s.r.o.
Mixit s.r.o. is a food-producing company established by Tomáš Huber MBA and Ing.
Martin Wallner MBA incorporated on April 20, 2011, in the legal form of s.r.o., comparable to LLC, with the registered capital of 200 000 CZK. Company headquarters has been seated in Prague since the incorporation, and the company operates on the Czech market for muesli and other grain-based breakfast products under the identification number 24836451. (Ministerstvo spravedlnosti, 2021)
Sources: Biosujo - Mixit-logo-biosujo, n.d.; Mixit - Logo, n.d.
Despite the fact that the basic concept of producing personalised cereal mixes was inspired by the German domain mymuesli, unlike mymuesli, Mixit decided to target the broader general public interested in healthy nutrition and healthy snacking rather than specialised groups, e.g. sportspeople, as mymuesli did. Yet, considering especially the distribution and marketing communication, Mixit target can be considered as niche compared to the competing brands on the Czech market for muesli and cereal products.
(Záluský, 2015)
Prior to the implementation of the custom-made production line in 2014, all products were mixed manually with the maximum production capacity of 3 000 packages of breakfast cereal mixes per day. However, the production automation more than tripled the maximum capacity to 10 000 packages per day. (Záluský, 2015) An additional increase of Figure 6 Logo Variants
29 the production capacity in 2018 was provided by the installation of another two fully automated production lines which decreased the error rate to almost zero. (Focus, 2019)
Since 2011 revenues of Mixit constantly grow, as displayed in Figure 7; therefore, the company decided for several expansions into foreign markets, namely to Slovakia in 2013, Poland in 2014, Canada in 2015 and lastly Hungary in 2019. Each expansion was complemented by the adaptation of the Mixit domain to the national language and currency. (Focus, 2019) Moreover, Mixit is currently preparing the expansion to Romania.
(Brejčák, 2020)
Source: Focus - Mixit.cz utržil za rok čtvrt miliardy a expanduje do Maďarska, 2019 Moreover, the additional sources of company's stability and continuous growth can be associated with the long-term contracts with reliable suppliers of ingredients and exceptional employee retention arising from excellent employer branding based on a friendly and informal working environment, democratic people-oriented managerial style and a wide range of benefits, e.g. flexible working hours, home office and employee discounts. (Freiwaldová, 2020)
4.2 Marketing Mix
Analysis of the Mixit marketing mix implemented in the domestic Czech market would facilitate conducting of the internal company analysis and the subsequent implementation of this marketing mix or its adaptation to the local specificities in the proposition of market entry strategy to Germany.
4.2.1 Portfolio Analysis
Mixit entered the Czech market in 2011 with the innovative breakfast muesli mixes, frequently referred to also as ready-to-eat mixes, and since then significantly enlarged its
Figure 7 Development of Mixit s.r.o. Revenues (in Mio CZK)
30 portfolio by introducing a wide variety of porridges, fruit and nut mixes, chocolates, granola bars and cookies, lyophilised (freeze-dried) fruits and vegetables, protein drinks and smoothie mixes, spreads and jams as well as merchandise. (Mixit, 2021a) Moreover, the product portfolio is continuously enlarged by new product lines, and ingredients available for personalised mixing often added at the customers' request.
The main point of differentiation from the competitors is the utilisation of the lyophilisation technique in the processing of fruit and vegetable for cereal mixes in order to preserve the nutrition value and vitamin and mineral content of the processed crops as Mixit has been the first company to on the Czech market to implement this technique.
Moreover, the company offers a possibility for customers to order personalised breakfast cereal mix for which consumers can choose from a wide variety of cereal bases, fruits, nuts and additional ingredients, counting over 90 ingredients in total. Following the success of the personalised breakfast cereal mixes, Mixit extended the personalisation possibility to porridges and mixes of lyophilised fruits and nuts. (Mixit, 2021b)
Moreover, the product portfolio follows the dietary trends and thus meets the preferences of the general public by offering gluten-free, lactose-free, sugar-free, vegan, paleo, low-carb and extra protein variants of the regular products. In addition, in 2016, Mixit discontinued using palm oil to produce its products to promote the sustainability and eco-friendliness of its production. Later in August 2016, the recyclable ecological box was introduced for selected products on the customers' demand as an alternative to the generally used non-recyclable tubes. However, the option to choose a recyclable box instead of a non-recyclable tube is available for the whole portfolio since 2018.
Additionally, in 2019 Mixit was awarded the HACCP certificate proving the compliance with the highest international standards for quality and safety of the products and production processes. (Mixit, 2021c) Furthermore, the company's products were awarded the CEFF certificate proving the absence of preservatives, artificial colourants, artificial sweeteners and glutamate, which were eliminated by the employment lyophilisation technique since the establishment of the business. However, even though the company utilises ingredients primarily from the domestic Czech producers of premium quality, its products are not in bio quality. Nonetheless, the company do not intend to switch over to bio production and adopt a rather neutral stand on the bio trend. (Mixit, 2021d)
Furthermore, besides limited seasonal packaging, Mixit introduced also seasonal products, e.g. advent calendars of three different sizes, contents and flavours to respond to
31 the customers’ wants. In the production of specified mixes for immunity, energy or weight- loss boost Mixit cooperated with the prominent nutrition specialists, e.g. Jana Vašáková, chefs, e.g. Kristína Nemčková, and sportspeople, e.g. Adam Ondra and Vašek Mráz.
Last but not least, the merchandise in the form of muesli bowls, spoons, shakers for protein drinks and linen shopping bags complement the food product portfolio. The merchandise can be purchased separately or in sets styled for birthday, wedding or season, e.g. Christmas or Easter, complemented by the chosen food products. (Mixit, 2021e) Moreover, members of the loyalty program are awarded stickers and pin badges otherwise not available for purchase. (Mixit, 2021f)
Figure 8 Portfolio of Mixit s.r.o.
Source: Zboží a Prodej - Mixit.cz spouští Klub předplatitelů, snídaňové výrobky doručí každý měsíc, 2018
4.2.2 Place
Even though Mixit employs multiple distribution channels, its distribution strategy is still considered selective since Mixit avoids distributing its products via supermarket chains in order to preserve the exclusiveness and premium brand association. The utilised indirect distribution channels are small brick-and-mortar stores specialising in healthy nutrition, farmers' markets and direct distribution is provided via e-shop with in-house delivery via Czech post, PPL or Geis, company pick-up spots and pick-up spots of Zásilkovna according to customer preference. Opening of the company store had been considered, yet this idea had been rejected due to its doubtful profitability. (Mixit, 2021g;
Záluský, 2015)
32 Mixit currently supplies its products to more than 600 independent brick-and-mortar stores specialising in healthy nutrition throughout the Czech Republic, such as Sklizeno, Náš Grunt or Bio day, in order to make its products as accessible as possible yet preserve its premium positioning. (Mixit, 2021h) Since the farmers' markets have not been organised since the beginning of 2020 due to the currently applied restrictive measures, it was not possible to obtain current data which would be relevant for the analysis.
Moreover, customers can have their orders placed on the company e-shop delivered directly to their address via one of the mentioned providers of currier services. Based on the preference of the delivery provider, the price charged for delivery ranges from 49 to 59 CZK. Company pick-up spots are located in the majority of the big cities in the Czech Republic. Currently, there are 35 spots available to which customers can have their orders delivered for 19 CZK. (Mixit, 2021g, 2021h) In addition to company pick-up spots, there are more than 1 800 pick-up spots of Zásilkovna to which customers can have their orders delivered for 39 CZK. (Mixit, 2021h)
Furthermore, to enhance the accessibility of the products company operates more than 100 vending machines called Mixitomat, matching brand aesthetics as well as the communication style, located in offices, schools and hospitals. Mixitomats offer packages of single-portion sizes of the ten most sold, thus most favourite, Mixit products.
(Semerádová, 2018)
Source: Mixit - Mixitomat, automat plný dobrot od Mixit!, 2021i Figure 9 Mixit Vending Machine
33 4.2.3 Price
Mixit has adopted the premium pricing strategy since its market entry to reflect the premium quality of the final products as well as the ingredients, exclusivity of the product portfolio and technology used in production. The adapted strategy is reflected in the fact that, compared to the competitors in the premium breakfast muesli segment, the final price of the Mixit mixes is ca. 30 – 40 % higher. Even though consumers were reluctant to pay the premium price shortly after the market entry, after the educational campaign regarding the utilised lyophilisation technique and its benefits consumers understood the reasoning behind the higher price and became willing to pay for the extra benefits. (Záluský, 2015) Moreover, the prices listed on company e-shop do not differ from the prices charged by in the distributors' brick-and-mortar stores, yet if they differ, the difference is just marginal, implying that the distribution channels are of equal importance for Mixit.
Due to the products' long shelf life, Mixit does not provide any extensive discounts.
However, the company provides seasonal bulk discounts of up to 10 % on e-shop to promote customer retention and seasonal sales. Moreover, the company favours members of the loyalty program and provides them with discounts of up to 20 % and free samples of product novelties. (Mixit, 2021f)
4.2.4 Communication
In its multiple-step marketing communication, Mixit employs a combination of push and pull strategies in order to create and stimulate demand for its products, inform and informally educate consumers. As the majority of the brands with premium positioning, Mixit avoids advertising in TV, radio and newspapers as well as a regular outdoor advertisement and the most heavily used communication channels are therefore company social media accounts on Facebook, Instagram, YouTube, Twitter and Pinterest, along with the company web and in-store promotion.
The employed communication style is consistent throughout all media channels and features the informal and ordinary language of the general public with the appropriate funny puns and references to pop culture and iconic movies or songs. Moreover, the language of the communication is made exceptional by using newly created coinages referring to mixing, muesli or the bird mascot of Mixit - Mixiťák.
34 Figure 10 Sample of Mixit s.r.o. Communication Style
Source: Mixit - Dárky, 2021e
Visual aspects of the communication preserve the cleanness and readability of the communicated message and the usage of corporate colours, namely yellow, orange and brown shades. Overall aesthetics of the brand visuals as well as packaging is somewhat retro yet visually appealing and likeable. In-store promotion used to make the Mixit brand more visible in the distributors' stores, e.g. shelf decorations and stands, is in line with company aesthetics. Moreover, the company adopted a rather emotional approach in message creation and communication via all channels is customer-oriented and encourages community building around the brand and directs customers to the company web.
Sources: Mixit - MIXIT.cz - NAMÍCHEJ SI SVOJE MÜSLI, 2018; MŮJ MIX - Můj Mix, n.d.
Company web serves as the primary touch point for customers and combines features of an informative website and e-shop. The informative section provides information regarding company background and loyalty program, further Q&A section, variety of charity activities, such as “Na dobroty pro lékaře”, which are a part of corporate PR and company blog with recipes, customer stories, creative ideas and company up-dates. The e- shop section comprises a mixing module and offer of products and vouchers, further provides information regarding product ingredients, accessibility of the products and proximity of pick-up spots. (Mixit, 2021j)
reference to the iconic scene from movie Pelíšky
Figure 11 In-store Promotion
