Strategy for Entering and Developing International Markets Mokate Poland

She changed both the company name to MOKATE (from the first letters- MOkrysz KAzimierz, TEresa) and the main activity of her company which from that moment was manufacturing of powder coffee creamers. The mile stone for the company turned out in 1992 when Mokate launched on a market innovative at that time product: Mokate Cappuccino Coffee. Two years later Mokate Cappuccino became a leader on the market of cappuccino instant coffees and nowadays has 80% market share on this market in Poland. 1. Mokate Cappuccino Source: http://rynekfmcg. om. pl/nowa-linia-mokate-cappuccino/ In 1994 Mokate begun exporting of its products to neighbor countries. The growing demand on local and foreign markets forced company to build new headquarter with bigger plant, more warehouses and offices. After opening new manufacture the production increased twice and in Mokate product portfolio there were already more than 10 items. In the course of time there appeared again a need to extend product line.

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New one, more modern and technical advanced manufacture enabled Mokate to produce more and faster.

Mokate product range had 200 items which were selling in 30 countries. The next very important moment for Mokate was in 2000 when it decided to build a 12-floor “tower” to product powdered cream by oneself. MOKATE didn’t have to buy imported whiteners and frothers anymore. What’s more Mokate begun to be supplier of these products both in Poland and abroad. The company was still fast-growing and gaining more market share. In 2002 Mokate acquired one of the biggest tee producers in Poland: Consumer.

After this transaction Mokate was controlling 18% of the polish tee market. The total sales increased to 80 Million Euro and the number of employees to more than 1000. In 2005 Mokate made another one acquisition. This time it bought Czech well-known producer of tee DUKATA from Zilin which was also the owner of very strong brand Dukata. Later in 2006 Mokate took over TIMEX, the leader on Czech instant products market what consequently gave Mokate a position of a leader in Czech Republic as well.

In 2009 Mokate became the owner of one additional Czech company: MERILLA- producer of ground coffee, beans coffee and sweets. In 2007 export has reached a 40% of total sales which was 100 Million Euros in the end of a year. Mokate was selling its whiteners and frothers in 60 countries all over the world, and the amount of employees raised to 1200 people. Nowadays Mokate Group is created by 9 companies within 6 are located abroad. Mokate is still a leader on an instant cappuccino market in Poland and the second player on the tee domestic market. 7% of total sales comes from export and the turnover of the group has crossed half one billion zlotys. In 9 out of 10 shops in Poland there is sold at least one product of Mokate. Since 2011 Mokate is also exclusive distributor of Lavazza coffee on domestic market. 2. Mokate Group structure [pic] Product portfolio Mokate has a wide product range. Within we can find: • coffees • tees • creamers • cocoa • drinking chocolate • intermediates (for B2B clients) 3. Mokate coffees | | |Mokate cappuccino |Coffee mixes | | | | |[pic] |[pic] | | | | |Natural coffees |Instant coffee | | | | |[pic] |[pic] | | | | |Chicory coffee | | | | | |[pic] | | 4. Mokate tees | | | |Minutka |Loyd Tea | | | |[pic] |[pic] | | | | |Grandma Jagoda |Loyd Tea Mulled | |[pic] | | | |[pic] | | | | |Dieta Fit |Other | |[pic] |[pic] | 5. Mokate creamers | | |Carmen Classic |Carmen Fit with Fibre | |[pic] |[pic] | | | | |Carmen Light | | |[pic] | | 6. Mokate cocoa | | | |Dutch cocoa |Tigo cocoa | |[pic] |[pic] | 7. Mokate drinking chocolate | | |Mokate Delicious Dark |Mokate Delicious Milk | | | | |[pic] |[pic] | Most of the products is sold below manufacturer’s Brand (e. g. Mokate, Tigo, Minutka) but the company sells also its product using private branding (e. g. Herbal Time for Biedronka markets in Poland). 8. Herbal Time as an example of Mokate private branding [pic]

In the company responsibility for export has Mokate Export Department and Food Ingriedients Business Unit is in charge of exporting rough products. All products are manufactured using new technologies and saving high standards. Because of this fact Mokate received following certificates: • HACCP- Hazard analysis and critical control points • IQNet Certificate • Quality Certificate ISO 9001 • Products safety Certificate ISO 22000 3 Internationalization of internal value chain Activities of Mokate Company on a domestic and foreign markets: • Acquiring of raw materials • Product design • Manufacturing • B2B sales (raw materials) Marketing activities aimed at corporate clients (trade fairs, product catalogues, promotion on website) • Marketing activities aimed to consumers (advertisement in mass media, direct marketing) • Transportation • Storing • Marketing research • After sale service Activities which Mokate outsources on a domestic and foreign markets: • Design and production of packages (only on domestic market) • Acquiring of raw materials • Sales to end users • Transport and storing • Advertising campaigns 4 Internationalization According Mokate Company there were a number of favorable factors of internationalization. Internal factors: • Growth and profit goals • Economies of scale • Willingness to use experience of managers gained on foreign markets External factors: Limited possibility of development on a domestic market • Access to resources which are unavailable on a domestic market In Mokate the internationalization occurred in 1994 when the company started to export its products first to neighbor countries (Czech Republic, Slovakia) and later to another 10 countries. In 1998 Mokate products were available in more than 30 foreign markets and from 2001 the producer was exporting its items to all continents all over the world. The next step in the Mokate internationalization process has started in 2001 with opening sales subsidiaries – Mokate International in Czech Republic, Slovakia and Hungary.

In 2006 Mokate decided to make brownfield acquisition of Timex company located in Czech Republic and after 3 years bought another one Czech company- Merilla which is sole production subsidiary cooperating abroad. There are also two subsidiaries cooperating in Ukraine and in Hungary. Meanwhile Mokate sold the license to manufacture its products to the company Alba from Zagreb in Croatia. Thanks this business agreement Mokate products became available on Balkan market and also in Arabic countries. Currently Mokate is selling its products in 55 countries i. e. in Germany, Russia, Sweden, Great Britain, Italy, China and countries of the Near East.

Mokate is also a big importer of raw materials especially because of the fact that has extended its products lines. Now Mokate imports tea (from Ceylon, Kenya, Argentina), beans coffee (purchased on commodity exchange), coconut oil and glucose syrup (selection of distributors depends on actual prices). Imported products are 80% of total purchases of Mokate which means that the company buys only 20% on domestic market. 9. Forms of internationalization in Mokate [pic] 10. Structure of sales of Mokate products (in value) [pic] 5 Ataptation Mokate adopts its products and marketing activities to local markets, needs and tastes of consumer. These are the most important factors influencing adaptation decisions.

Others are local regulations and different requirements regarding use of language and obligatory information which have to be written on package. Mokate adopt all marketing mix activities to particular markets: • Product features e. g. Czech consumer prefer more sweet coffee taste so Mokate changed the recipe of coffee mixes • Assortment e. g. In Czech Republic there are more varies of fruit tees. In Poland consumer drink mostly black tee • Distribution system e. g. In Czech Republic Mokate uses more modern and advanced canals of distribution then in Poland, Slovakia and Hungary • Package • Price diversification • Advertisement campaigns 11.

Product adaptation in Poland and Czech Republic |COUNTRY |PRODUCT |PRICE | |POLAND |Babcia Jagoda | | | | |2,9 PLN | | | |(0,7 €) | |CZECH |Babicka Ruzenka | | |REPUBLIC | |10 Kc | | | |(0,4 €) | 6 Summary Mokate is an example of a company which successfully entered foreign markets and consistently realizes its strategy of development and building strong market position. Mokate begun from simple forms of internationalization (import, export) and in the course of time, gaining more experience and needed resources was utilizing more advanced forms of expansion. Adam Mokrysz, the member of executive board says that the company is still focused on international cooperation. Currently Mokate ries to gain new distributors and partners on African and Asian markets because in general countries in these regions grow very fast (as well as demand) and create big opportunities to export and reach high profits. Also the situation on a domestic market is very prospective. According Export Credit Insurance Corporation Joint Stock Company the value of polish export in 2011 generated 137,8 billiard Euro and was 10,2% higher than last year. An average polish consumer buys approximately 3 kilos of coffee per year and this number is still growing (in 1996 average Pole drunk 280 cups per year. In 2006 drunk 580). Every year people in Poland consume also more fruit, green and herbal tee what creates additional possibility of development for Mokate in this sector. Sources: Marzanna Witek-Hajduk, Strategie internacjonalizacji polskich przedsiebiorstw w warunkach akcesji polski do Unii Europejskiej, SGH, Warszawa 2010 • Jan Rymarczyk, Internacjonalizacja i globalizacja przedsiebiorstwa, PWE, Warszawa 2004 • Nelly Daszkiewicz, Internacjonalizacja malych i srednich przedsiebiorstw we wspolczesnej gospodarce, Scientific Publishing Group, Gdansk 2004 • www. mokate. com. pl • http://www. egospodarka. pl/40931,Rosnie-rynek-kawy-w-Polsce,1,39,1. html • http://www. fcmarket. pl/sezam/172021. pdf • http://przegladhandlowy. pl/933/mokate-wiceliderem-w-kategorii-miksy-kawowe/ ———————– MOKATE GROUP POLAND FOREIGN MARKETS Mokate Sp. z. o. o. in Zory Mokate S. A. in Ustron [pic]DHSUcdv€? ‰S®? eOA¬e¤”? ncXcM>/h[5=h

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