Ahold Delhaize’s Marketing Strategy for Expanding Globally Into Hong Kong Report

Introduction

Ahold Delhaize is an international retailer operating on three continents and in 11 countries. It was created in 2016 by merging two well-known European retail behemoths, Ahold and Delhaize Group (Čirjevskis, 2020). Since then, it has expanded to rank among the biggest supermarket merchants worldwide. Ahold Delhaize has long roots that can be traced back to the 1800s, with a lengthy and varied history. It began as a little grocery store in Zaandam, Netherlands, in 1887.

However, Delhaize Group was founded in Belgium in 1867 and has also evolved into one of the world’s biggest food merchants. Since the merger, Ahold Delhaize has grown internationally, operating over 7,000 shops and providing service to over 54 million customers weekly (Ahold Delhaize, 2023). The corporation is well-known in the US, Europe, and Southeast Asia with brands including Food Lion, Giant, Stop & Shop, Hannaford, and Albert Heijn, among others (Ahold Delhaize, 2023). It deals with fresh fruit and vegetables, meat, dairy, bakery products, and non-food items such as home goods and cosmetics.

The business is dedicated to sustainability and has established challenging objectives to lessen its negative effects on the environment, including lowering carbon emissions and food waste. Ahold Delhaize runs e-commerce platforms in addition to its primary retail operation, giving customers the ease of online shopping. Furthermore, it has made significant investments in technology and innovation, including creating digital solutions to increase operational effectiveness and the customer experience.

The main products include:

• Fresh produce, such as fruits, vegetables, and herbs;
• Meat, poultry, and seafood;
• Dairy products, such as milk, cheese, and yogurt;
• Bakery items, such as bread, cakes, and pastries;
• Snacks and confectionery, such as chips, cookies, and candy;
• Beverages, including soft drinks, juices, and alcoholic beverages;
• Frozen foods, such as frozen entrees, vegetables, and desserts.

Aims of International Marketing Plan

This international marketing plan aims to analyze the grocery market in Hong Kong and help Ahold Delhaize successfully enter the Hong Kong market. Specifically, the objectives of the plan are:

• Justify and evaluate the attractiveness of the Hong Kong market.
• Recommend market entry mode.
• Design segmentation, targeting, and positioning strategies.
• Provide marketing mix recommendations.
• Provide marketing control recommendations.

SWOT Analysis

Ahold Delhaize is one of the leading global retailers and operates in 11 countries. Even though the business has grown significantly and been successful in many places, it has not yet entered the Hong Kong market. SWOT analysis is essential in analyzing the firm’s strengths, weaknesses, opportunities, and threats in its global marketing strategy for entering the Hong Kong market.

Strengths

• Established brand: Ahold Delhaize is a well-known brand with a solid reputation for high-quality goods and customer service in various regions. This may benefit the business in Hong Kong by helping it build brand awareness and client loyalty.
• Wide product range: The firm sells various goods, such as fresh vegetables and fruits, meat, dairy, and non-food items. This can make the business stand apart from rivals in Hong Kong’s congested retail market.
• Experience in international markets: Ahold Delhaize has expertise operating in several other nations, which may assist in lessening some of the difficulties of entering a new market like Hong Kong.

Weaknesses

• Limited market knowledge: Ahold Delhaize may lack the local market expertise required to compete successfully in Hong Kong. The organization must conduct research to comprehend customer tastes, behavior, and the competitive environment.
• Limited physical presence: Due to the lack of physical outlets in Hong Kong, Ahold Delhaize may find gaining traction in the market more challenging. The business must create a plan for accessing the market, either collaborating with regional merchants or creating an online presence.
• Cultural differences: Hong Kong’s culture and customer tastes may differ greatly from those of other regions of Ahold Delhaize. The business must be aware of these variations and modify its marketing and product offerings accordingly.

Opportunities

• Growing retail market: Hong Kong’s retail sector is predicted to develop even more in the upcoming years due to an expanding middle class and rising earnings. This allows Ahold Delhaize to develop a foothold and take market share.
• Increasing demand for sustainable products: Hong Kong consumers are increasingly concerned about sustainability and environmental challenges, which drives demand for sustainable products. This expanding consumer group may be drawn to Ahold Delhaize’s dedication to sustainability and its initiatives to lessen its environmental impact.
• E-commerce growth: E-commerce is expanding quickly in Hong Kong, with more people opting for online shopping. Hence, Ahold Delhaize may have an edge in snagging this market niche due to its e-commerce expertise.

Threats

• Competition: The retail sector in Hong Kong is highly competitive, with several well-established local and foreign businesses. Ahold Delhaize must differentiate itself through product selection, cost, and customer support.
• Regulatory environment: Hong Kong’s complicated regulatory framework might make entering the market more difficult for Ahold Delhaize. To achieve compliance, the business must understand local laws and rules.
• Economic uncertainty: Political and economic unpredictability have recently plagued Hong Kong, which may affect consumer confidence and purchasing. Ahold Delhaize must be equipped to adjust to shifting market dynamics and customer trends.

International STP Analysis

Segmentation, targeting, and positioning (STP) analysis on a global scale is a useful tool for businesses like Ahold Delhaize to break into a new market: the Hong Kong market. STP research segments a market, chooses target segments, and creates a positioning plan to effectively communicate the company’s value offer to those groups. This part examines how Ahold can leverage STP to enter the Hong Kong market.

Segmentation

Market segmentation involves separating customers into groups with comparable demands, traits, and behaviors (Bian et al., 2019). Ahold Delhaize will employ segmentation based on demographic, psychographic, and behavioral data to pinpoint prospective target demographics in Hong Kong. Table 1 shows Ahold Delhaize’s market segmentation according to income, age, lifestyle, and purchasing patterns. As a result, Ahold Delhaize will have a better chance to comprehend the requirements and preferences of various Hong Kong customer groups and adjust its marketing and product offers appropriately.

Table 1: Ahold Delhaize’s Market Segmentation

Targeting

Below are presented the targeting strategies that Ahold Delhaize will use to catch the segmented customers.

Middle-Class Families

1. Appeal to middle-class families by providing various reasonably priced, high-quality products that satisfy their basic demands for home items.
2. Provide promotions, discounts, and loyalty programs to promote repeat business.
3. Focus on e-commerce, such as social media platforms and email marketing, to connect with this market and emphasize its dedication to sustainability and customer service.

Young Professionals

1. Appeal to young professionals by providing a variety of valuable items that meet their hectic schedules.
2. Promote its home delivery, online ordering capabilities, and mobile app.
3. Provide organic items and nutritious snack alternatives.

Health-Conscious Customers

1. Provide a variety of natural and organic items that fit their dietary requirements.
2. Demonstrate sustainability commitment and promote healthy living through marketing items without artificial preservatives, colours, or flavors.
3. To interact with this market, offer instructional tools like culinary lessons and dietary guidance.

Positioning

Positioning is the creation of a distinctive value proposition that sets the business apart from competitors in the eyes of the target customers (Iyer et al., 2019). Ahold Delhaize will present itself in Hong Kong as a cost-effective, high-quality ecological product supplier. Figure 1 shows the position map diagram of Ahold Delhaize.

Market Entry Model Recommendations

Ahold Delhaize must carefully assess its market entrance alternatives as it explores entering the Hong Kong market and choose the method that best matches its goals and capabilities. Ahold can use four entry modes: joint ventures, franchising, e-commerce, and green-field investment. According to Alon et al. (2020), franchising is a strategy that helps companies grow while using few resources.

“Greenfield investment” refers to starting a brand-new company from scratch in a foreign market. Although this entrance method gives the organization more control and flexibility, it also involves larger risks and expenses than other methods (Ashraf et al., 2021). Therefore, Ahold Delhaize shouldn’t use this entry mode.

On the other hand, joint ventures are a common entrance strategy for businesses wishing to enter new markets and share risks and resources with a local partner. Ahold Delhaize can create a joint venture with them to take advantage of a Hong Kong-based retail firm’s consumer base and local market expertise (Bamel and Dhir, 2019). This will make it easier and faster for Ahold Delhaize to get a footing in the market than if it were to do so independently.

The figure below shows the formation process of the joint ventures by Ahold Delhaize. Furthermore, Hong Kong’s e-commerce industry continues to expand, hence Ahold Delhaize should consider entering the market through a digital platform. Based on new technology, e-commerce is at the forefront of revolutionizing marketing tactics and enabling better decision-making and product knowledge (Rosário & Raimundo, 2021).

Ahold Delhaize will be able to join the market quickly and effectively while offering Hong Kong customers a practical and accessible choice by utilizing its current e-commerce capabilities. Ahold Delhaize’s e-commerce strategy can entail forming alliances with already-established e-commerce platforms or creating its own capabilities.

Marketing Mix Recommendations

Ahold Delhaize will need to create a thorough marketing mix plan that fits the demands and tastes of Hong Kong customers as it explores entering the market there. The four components of the marketing mix are product, price, promotion, and venue.

Product

Table 2 shows the product strategies used during the introduction, growth, maturity, and decline phases.

Table 2: Product Strategies

Promotion

The firm will consider using a combination of conventional and digital marketing techniques, as shown in Table 3.

Table 3: Promotional Strategies

Place

The distribution and placement plan that Ahold Delhaize will employ in Hong Kong must be thoroughly thought out, as shown in Table 4.

Table 4: Place Strategies

Marketing Control Recommendations

When it enters the Hong Kong market, Ahold Delhaize will need to create a marketing control plan to track and assess the success of its marketing initiatives. Marketing control involves monitoring and evaluating marketing performance and making necessary modifications to enhance results (Hakimovna & Muhammedrisaevna, 2022). In this area, we will offer suggestions for marketing control for Ahold Delhaize in Hong Kong.

Set Clear Marketing Objectives

Before entering the Hong Kong market, Ahold Delhaize will set up precise and quantifiable marketing targets that complement its overarching corporate objectives. Table 5 below shows the SMART goals set by Ahold Delhaize.

Table 5: Ahold Delhaize Smart Criteria

Monitor Market Trends and Consumer Behavior

Table 6, shown below, contains the strategies Ahold Delhaize will use to monitor market trends and consumer behavior as it considers entering the Hong Kong market.

Table 6: Market Trends and Consumer Behavior Monitoring

Measure Marketing Performance

The effectiveness of Ahold Delhaize’s marketing initiatives should be evaluated on a regular basis. Table 7 below shows the evaluation using a range of indicators, including sales revenue, return on investment (ROI), and customer acquisition cost (CAC).

Table 7: Marketing Performance

Conduct A/B Testing

Figure 3 shows Ahold Delhaize’s A/B test on its marketing strategies. A/B testing includes comparing the performance of various iterations of a marketing strategy (Kohavi, Tang & Xu, 2020). Ahold Delhaize will find the best strategies and hone its marketing plan over time by comparing the outcomes of several versions.

Reference List

Ahold Delhaize. (2023). Welcome to the world of Ahold Delhaize. Web.

Alon, I., Apriliyanti, I. D., & Parodi, M. C. H. (2020). A systematic review of international franchising. Multinational Business Review, 29(1), 43-69. Web.

Ashraf, A., Doytch, N., & Uctum, M. (2021). Foreign direct investment and the environment: disentangling the impact of greenfield investment and merger and acquisition sales. Sustainability Accounting, Management and Policy Journal, 12(1), 51-73. Web.

Bamel, N., & Dhir, S. (2019). Inter-partner dynamics and joint venture competitiveness: a fuzzy TISM approach. Benchmarking: An International Journal, 26(1), 97-116. Web.

Bian, Y., Song, K., & Bai, J. (2019). Market segmentation, resource misallocation and environmental pollution. Journal of Cleaner Production, 228, 376-387. Web.

Čirjevskis, A. (2020). Do Synergies Pop up Magically in Digital Transformation-Based Retail M&A? Valuing Synergies with Real Options Application. Journal of Open Innovation: Technology, Market, and Complexity, 6(1), 18. Web.

Hakimovna, U. M., & Muhammedrisaevna, T. M. S. (2022). Audit and Marketing Audit in Small Business and Private Entrepreneurship: The Order and Process of Inspection. Journal of Ethics and Diversity in International Communication, 2(3), 84-88. Web.

Iyer, P., Davari, A., Zolfagharian, M. and Paswan, A., 2019. Market orientation, positioning strategy and brand performance. Industrial Marketing Management, 81, pp.16-29. Web.

Kohavi, R., Tang, D., & Xu, Y. (2020). Trustworthy online controlled experiments: A practical guide to a/b testing. Cambridge University Press. Web.

Othman, B. A., Harun, A., De Almeida, N. M., & Sadq, Z. M. (2020). The effects on customer satisfaction and customer loyalty by integrating marketing communication and after-sales service into the traditional marketing mix model of Umrah travel services in Malaysia. Journal of Islamic Marketing. Web.

Rosário, A., & Raimundo, R. (2021). Consumer marketing strategy and E-commerce in the last decade: a literature review. Journal of theoretical and applied electronic commerce research, 16(7), 3003-3024. Web.