International Marketing Book Report

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Introduction
Beanie-the Flavor Company-was born in the homely garage of Mark Porteus in February 2009. It was the brainchild of Chris Tarling and Mark Porteus, former employees of Boater's Coffee. As more investors joined the company, the Beanies brand was officially launched and registered. As operations began to expand out of the scope of Mark's garage, a 1000 square foot space was rented as an economical alternative in May 2009. Four varieties of flavored instant coffee were introduced in the same month. Beanies truly became an "international" brand when it commenced exporting its product for the coffee lovers in Poland. With business growing further, the firm moved to a 2000 square foot space at the end of the winter in 2010. Growth in the digital realm is of prior importance to Beanies and it launched its user friendly, fully integrated e commerce website that allows users to create a profile online with accordance to the purpose of visit. A jarring line was procured and installed as well which allowed the firm to truly manufacture its own recipe and design the packaging as it wanted. (Beanies, 2012) Equipped with a diverse portfolio of flavored coffee blends in whole bean, ground and instant, Beanies prime objective is to now empower its brand in the international arena now
It has marked its footprint in the coffee markets of Italy, Austria, the United States of America, Finland, Denmark, the United Kingdom Uruguay and Cyprus. Now, it is looking towards intensifying its efforts in the European frontier, particularly Germany. It had some success at a food fair there during the UKTI mission. Beanies felt that Germany was ripe for the taking and wanted to take its business onto another corporate level there.


Global Coffee Market
Coffee consumption soared from 15000 tons in the 1990s to 55,000 tons in recent times. (German Coffee -- Flavor And Smoothness, 2011). The market is growing steadily as global demand for instant coffee is on the rise. In 2008, the hot drinks sector as it has been termed, which included coffee, tea, and chocolate flavored drinks, had a total worldwide sales value of USD 59 billion. Coffee was the highest contributor and held USD 40 billion worth of sales from it. Leatherhead Research forecasted that this division would grow by 5% each year up to 2012, escalating the overall market value up to USD 48.75 billion by then. The instant coffee market shared thirty five percent of this entire pie in the global sphere in value terms with high shares in the United Kingdom and Ireland, i.e., eighty one percent and eighty nine percent respectively. According to the Global New Products Database, coffee was the most "active" in the United Kingdom with the highest number of powdered instant coffee launches, followed by Russia, Germany, Poland and France. Such brand introductions grew in 2009 to over 200 overall, with unflavored/plain powdered coffee dominating the market with 84% of all product launches. (Moe, 2010).
The instant coffee market is on the rise, especially in the United State of America. About fifteen percent of the coffee consumed there annually is instant coffee. In the United Kingdom, instant coffee is synonymous to soluble coffee; Nestle controls over fifty percent of the market. As mentioned earlier, the market in Germany has grown to 55,000 tons from 1,000 tons. With the advent of globalization coupled with the revolutions in communication technologies; the modus operandi of the international corporate empire has changed. Consumer behavior has evolved and now people lead busier, hectic lives and have less time on their hands.
World consumption of soluble coffee products has improved after a "number of years of stagnation". It grew from 21.4 million bags in 1999 to 29.9 million bags in 2004.

Source: Neumann Kafee Gruppe Statistics
The rate of growth in demand for coffee in Europe has been a humble 0.2% a year, which is slower than the total growth in usage for all sorts of coffee. Instant coffee is accounted for over 80% in England, demand was beginning to fall, but has rejuvenated with the introduction of specialty coffee brands. Other European countries witnessed a short yet transient demand for soluble coffee. The Deutscher Kaffee-Verband estimated that the instant coffee slice rose from 6.2% to 7.5% between 1998 and 2005, demonstrating the increment in demand for these products. This topical development in the demand for soluble coffee can be credited to an increase in demand within the topographical Eastern bounds of Europe, especially Russia and then the Far East. Instant coffee owns high market shares in both geographical divisions.

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An innovative "3 in 1" instant coffee brand has gained a lot of popularity. It is soluble coffee with a non dairy creamer and sugar, usually meant to serve one. The year 2009 witnessed 72% of the soluble coffee utilized in importing countries processed into soluble coffee in the very same countries. In 2000, the counterpart figure was 83% and this implied that manufacturing nations maybe forecasting a notable growth in their share of the soluble coffee market in importing countries. Demand for soluble coffee differs in manufacturing nations. It accounts for ninety five percent of total coffee utilization in the regions of the Philippines and Thailand. The largest producer of instant coffee is Brazil and local consumption accounts for only five percent of total coffee utilization. Indian soluble coffee demand is thirty five percent of the entire coffee segment and is mostly imported with Mexico accounting for sixty percent. One interesting fact to note is that two powerful coffee giants are Nestle and Kraft Foods. Together, they dominate the world market for coffee with approximately seventy five percent market share. Nestle alone supplies half of the world demand for coffee. (Trade Practices of Relevance to Exporters in Coffee Producing Countries: Demand-Soluble Coffee, 2011).





Following is a table illustrating world consumption country by country. It demonstrates coffee consumption value from the years of 2007 to 2010. It appears that there was a downward slope in the demand for coffee in the countries of the UK, Italy and within Spain. As our focus is on Germany, it is interesting to note that the percentage change is positive and the highest amongst the European Union is that of Germany in the amount of 4.3%. Coffee consumption trends are rising and falling over these three years and settles on a rise for 2010. As Germany tends to import its coffee, there is strong market potential here. (Monthly Coffee Report March 2012, 2012) Source: (Monthly Coffee Report March 2012, 2012)

Market Environmental Analysis
Now that the global coffee market has been explored in comprehensive detail, it is crucial to analyze the industrial and social dynamics of Germany in order to understand the context of the market. With a total area of 357,022 square km, only 33.13% of land is cultivable. Agriculture is only 1.8% of the total gross domestic product and employed 5.6 of the total workforce. It is the third largest agricultural producer in the European Union. With a strong dearth of natural resources, Germany relied intensively on oil and natural gas imports for its energy requirements. In 2010, the country became the second largest natural gas importer and seventh largest oil importer. (Germany Economic Structure, 2010)
The 2009 population statistics estimated a population of eighty two million people with a high level of consumerism. The German market is moving away from the traditional, manufacturing sector to transforming itself into a source of knowledge based power. Its service division contributed seventy two percent to the gross domestic product. The Germany economy is the fourth largest one in the world and the greatest one within the European continent. It balances its trade sheet by being the world's second largest importer and also comes in second as the world's second greatest exporter. Following are Germany's top ten imports for the year of 2009:

As it is evident from the table above, machinery constitutes the highest number of imports with mineral fuels coming in a close second. Our interest is to do with commodities and it is interesting to note that it is a remarkable figure of USD 82.02 billion, accounting for approximately 8.7% of the value of total imports.
The table below illustrates the top ten exports for Germany in the year of 2009

The trade balance is positive as the value of exports exceeds the value of imports in the year f 2009.
Germany's service division contributed seventy two percent to the gross domestic product. The GDP incremented to 3.0% in 2011, but had decreased from the figure in the preceding year of 3.7%. Germany has strengths in the technological sphere of information and communication. It accounted for over twenty percent of the complete European market with a turnover of Euro141.6 billion in 2010. High demand exists for consumer intensive electronic products such as smart phones, LCDs etc.
Another area where Germany enjoys potency.....

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