Kelloggs cereal was started in 1906 by W. K. Kelloggs (Kelloggs, 2012). W. K. Kelloggs goal was to supply people with healthy breakfast cereal. Since the startup of Kelloggs, the company has grown and is known globally. Kelloggs is known in more than 180 countries and has nearly 13 billion in sales since 1997 (Kelloggs, 2012). To understand how Kelloggs has expanded its operation globally the factors of trade practices, demographics, physical infrastructures, cultural differences, social and ethical responsibility, the effects of different political structures, and technology will be explained in the following paragraphs.
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Demographic concerns the age group and income of people, so it is describing the characteristics of people. Kelloggs at one time experienced a sales drop and research discovered that teenagers and adults had cut back on eating cereal (Misunderstood, 2010). Because of this research, Kelloggs marketing department researched how to retrieve these demographic groups back, so for Kelloggs the importance of demographic was the loss of sales.
Physical Infrastructure is the condition of the community that the company is trying to sell in. The price of the product is affected by the ability to transport or store the product. Bad roads, the population, and even the availability of utilities to keep milk fresh affect Kelloggs. The physical infrastructure needs to be researched whenever a company is considering expanding to other countries or even parts of the United States. The population in some areas is low enough that to transport the product to these areas would be costly to sell. The lack of good roads demands other methods of transportation and can add to the cost. Because Kelloggs sells its product in 180 countries all of the physical infrastructures in the area of distribution needs to be evaluated.
Kelloggs take cultural difference very seriously. Selling to different countries involves different eating patterns for each country. The United States eats grain, while China eats rice. Each country requires different vitamins and nutrients in the cereal because of their cultural differences. Kelloggs has adapted the cereals to fit different countries, and this affects the advertising of the cereal.
People in different countries shop according to their personal needs and cultural standards. Therefore, it would be similar to McDonald’s selling hamburger in India. If Kelloggs tried to push raisin and grains in a country that ate rice it would offend the citizens. Following the cultural differences allows Kelloggs to fashion its cereals to meet the desires of each country and slowly introduce other cereals as it becomes recognized as a company to trust.
Social and Ethical Responsibility
Legal obligations are laws that state what a company can and cannot do. A social and ethical responsibility is a gray area set more by society then law. Although the past was set-up more for legal obligations, social and ethical responsibilities are becoming predominant in the marketplace. No matter the country a company is operating in, the social obligations of the society can make or break a company. With the rise of environmental awareness and the honesty in advertising is making deception not only difficult but also dangerous for companies. Ethical and social responsibilities involves right and wrong, and the majority belief in right and wrong. Just because a company follows legal guidelines does not mean that it will prosper. The damage to the environment or false advertising results in the loss of public trust...