Title: International marketing process of Hot Mouth Food Distributors

Executive Summary

The proliferation of technology is shrinking the world making it easier for marketers to reach
international markets and not limit themselves to domestic markets only.

This report examined the international marketing strategies used by Hot Mouth Food
Distributors in its journey to tap the international market in New York.

The purpose of the report was to provide the necessary information to undertake an
international marketing strategy. Firstly, International marketing was defined, a background of
the company Hot Mouth Food Distributors and the product selected was given and why it could
successfully compete internationally. The paper then described how and why New York City
was selected to enter; thirdly, the current environment was examined using a PESTLE analysis
and issues encountered outlined. Next, entry modes were highlighted and factors were given
why a non-export mode was chosen and the marketing mix was documented with emphasis on
promotion and lastly, an explanation was shown why the product had to have adaptations.
Contents
1. Introduction ............................................................................................................................1
2. Company overview ..................................................................................................................1
2.1 Product description ...........................................................................................................2
2.2 International competitiveness ...........................................................................................2
3. Justification of country selection .............................................................................................2
3.1 Country’s current environment .........................................................................................2
3.1.1 Political factors ...........................................................................................................3
3.1.2 Economic forces .........................................................................................................4
3.1.3 Social ..........................................................................................................................4
3.1.4 Technological ..............................................................................................................5
3.1.5 Legal ...........................................................................................................................5
3.1.6 Environment ...............................................................................................................5
4. PESTLE issues to resolve ..........................................................................................................6
5. Available market entry strategies ............................................................................................6
5.1 Entry mode chosen ............................................................................................................6
5.1.1 Reason for choice .......................................................................................................7
6. Marketing mix strategy ...........................................................................................................8
6.1 Product, price and place ....................................................................................................8
6.2 Promotion .........................................................................................................................8
7. Standardisation vs adaptation .................................................................................................9
8. Recommendation ....................................................................................................................9
9. Conclusion ...............................................................................................................................9
Reference list ............................................................................................................................10
Appendices ...............................................................................................................................12
1. Introduction
Marketing is defined as the process to create value for customers and build customer
relationships in order to capture value from customers in return (Armstrong & Kotler 2015).
Marketing involves the promotion of goods and services from conception to the end user,
which includes the coordination of four elements, termed the 4 P's, for identification of the
choice and growth of a product; determination of the price; selection of a distribution channel
to reach the customer's place and development and execution of a promotional strategy.

However, the scope of marketing is expanded when organisations elect to sell outside their
borders. Hence, International Marketing is defined as the marketing of goods, services, and
information across national boundaries (Albaum & Duerr 2011). The international market is
substantially dissimilar as related to local markets because there are variables between
domestic and foreign markets such as culture, laws, cost structures, advertising opportunities
and distribution methods.

Notwithstanding, in today’s business environment it is paramount for many companies to

market internationally in order to increase its revenue and customer base by seeking new
opportunities, as a necessity for economic survival and to increase sustainability. Additionally, it
also helps a business to join with new vendors, new technologies and different methods of
doing business, however; there may be several challenges to overcome.

2. Company overview
The business used to illustrate the stages of international marketing is Hot Mouth Food
Distributors, an entrepreneurial venture started by two brothers selling spicy pickled fruits,
locally known as ‘chow’ in Trinidad and Tobago. The company is well known for their spicy
snacks; was started in the year 2005 and currently employs seven people. The mission of Hot
Mouth Food Distributors is to make Trinis healthier by helping them have their daily servings of
fruit. Presently the company has three locations in Trinidad -one in San Fernando, where the
offices are located, another in Chaguanas and the last is located on the University of the West
Indies Campus. There is also an online presence through a Facebook page named The Original

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"Hot Mouth". Delivery service is available and they also cater for bulk purchases and various
public and private events.

2.1 Product description

Chow is a simple, refreshing combination of fresh fruits, garlic, lime juice, chadon beni
[culantro] and hot peppers, with lime juice being the pickling agent and the pepper acting as an
antimicrobial due to the Capsaicin contained in pepper. Hot Mouth Food Distributors’ tagline is
‘Taste Your Health’ and they use no artificial flavours and a minimum quantity of salt, putting
the product in the healthy and natural foods bracket. Other than eating whole fresh fruits,
making fruit tastier encourages people to eat them, this is most likely the healthiest natural
snack eaten locally. According to the brothers, any fruit or vegetable can be made into a tasty
chow and hot peppers are actually fat burners that are filled with vitamins (Baboolal 2016).

2.2 International competitiveness

In this writer’s opinion, this product will have great international competitiveness as it has a
unique selling proposition as being a unique one-of-a-kind product. Additionally, it was realised
that expatriates visiting Trinidad would buy in bulk and carry ‘chow’ back to friends and family
abroad. Trinidad is also known for its peppers and has three of the top ten spot listed on the
Pepperhead website for hottest peppers (Pepperhead 2017).

3. Justification of country selection

The United States of America was selected to market Hot Mouth products, specifically New
York City. This location is chosen due to the concentration of Caribbean people which account
for twelve percent of New York’s population (US Census Bureau 2017). This spicy fruit snack
would engage feelings of nostalgia to the Caribbean people, particularly Trinidadians who have
a propensity to eat spicy foods and more so that pepper consumption is on the rise as can be
seen from the recent – ‘world’s hottest pepper challenge’.

3.1 Country’s current environment

To analyse a country’s environment in marketing, a PESTLE analysis of the environment is used.
PESTLE is a mnemonic that represents the six influences that affect a market (see figure 1),

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these are Political, Economic, Social, Technological, Legal, and Environmental dynamics
(Business & Management Dictionary 2007).

Understanding gained from the country analysis is used to plan market entry apart from factors
like revenue, profitability corporate success and a complete view of a country thus a PESTLE
was created for New York City.

3.1.1 Political factors

With the recent presidential elections in the USA, the country has moved from a Democratic to
a Republican-led government with new restrictions on trade and immigration being issued by
President Donald Trump with the intention to ‘bring jobs back to America’. Although policies
are being implemented regarding illegal immigrants, there is a large number of legalised

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Caribbean diaspora living in New York. Hence, the reasons for Hot Mouth to enter the market
create local jobs and use local inputs.

3.1.2 Economic forces

Economic forces include all the contributing factors to an economy’s condition including
inflation, interest and foreign exchange rates which determine the path of an economy.

The country’s GDP was 18,566.9B USD as of Q3 2016 with a 3.6% GDP growth in New York (BEA
2017) and from all indications the economy is on the uptake. Furthermore, in 2015 New York
had a per capita personal income (PCPI) of 58 670 USD (BEA 2017), which suggests that the
residents would have disposable income available with a high purchasing power.

Ethnic food is the fastest growing food group in the US with retail sales of totalling
approximately 11B USD in 2013 and is estimated to generate more than 12.5B USD by 2018
(Hartman 2017).

3.1.3 Social
Every country is different and has unique mind-sets which impact on businesses and the sales
of their products and services. The cultural implications, demographics, social lifestyles,
domestic structures; all of these are studied by companies to understand the market and the
consumer better.

New York City is a densely populated area with an estimated 19M people (US Census Bureau
2017) and has a diaspora of peoples from the Caribbean making it a prime location for the Hot
Mouth venture. There are great mixes of immigrants who have brought a wide variety of
cuisines and the population is akin to experimenting with new foods in part due to the Food
Channel Network. Additionally, there is a movement to healthier lifestyles hence, the growth of
the whole foods markets as consumers seek out healthy and flavourful foods and are willing to
develop their culinary perspectives.

Labour Day celebrations in Brooklyn, much like Trinidad Carnival, also displays an increased
Trinidadian influence in New York. Many New Yorkers view eating as a source of recreation and
pleasure and people tend to meet with friends outside the home to eat and snack.

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3.1.4 Technological
Technology is the cornerstone of the US economy, greatly influences business and changes
constantly. Therefore, companies need to stay abreast and incorporate technology as and when
needed, in order to understand how the consumers respond to technological trends and how it
is utilised for their benefit.

More than 81% (16M) of New Yorkers use the internet (Internet World Stats 2017). Ordering,
supply chain management and communications will be easy with the current infrastructure,
promotions for the ‘chow’ on social media will be welcomed such as twitter and Facebook. A
mobile phone app to find the nearest location Hot Mouth product is available will be made
available and this would allow research at a consumer’s fingertips.

3.1.5 Legal
Judicial alterations happen from time to time which could affect the business environment. If a
law is amended that law would impact industries and business in that economy. Businesses
should examine legal changes in relevant environments. Some legal factors Hot Mouth needs to
be aware of are regulations for business license, sanitation, customers’ rights, business
contracts, local laws including employment laws, taxes, product regulations, patent
infringements, disposal guidelines and health and safety regulations.

3.1.6 Environment
Location influences business trade, climate changes and consumer reactions to the particular
offering can also affect trade. Some environmental factors that impact trade are the
geographical location, climate and weather, waste disposal laws and people’s attitude towards
the environment.

Entry into a market relies on understanding all the environmental factors, collect relevant
information, identify the opportunities for the organisation, recognise the threats your
company faces and finally take action.

Hot Mouth realised that this is an excellent opportunity because of the movement towards
natural and non-GMO foods. Also, many New Yorkers are looking for snack solutions, which are

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healthy and delicious, with on-the-go choices to fit with their busy and active lifestyle which
provides nutrition without sacrificing taste.

4. PESTLE issues to resolve

From the PESTLE analysis of New York, main issues to be resolved are:

1. Research every related regulation and law, which is not easy and is time-consuming.
2. Calculate product prices so people would purchase regularly since it is perceived as an
affordable treat. However, there is no product to compare to.
3. Identify the consumers who are willing to buy the product out of the 19M people.
4. Fashion appealing and suitable product packaging.
5. Determine the best location to introduce the product.
6. Create the right promotion to launch in a competitive marketplace and a strategy to
effectively reach the internet and social media users.

5. Available market entry strategies

When an organisation is deciding to enter an overseas market, there are a variety of options
available. No one market entry strategy is suitable for every market, as these options vary with
cost, risk and the degree of control which the company is willing to embrace. Consequently, the
mode of entering an international market is one of the most important strategic decisions for a
business.

There are a number of ways in which Hot Mouth can enter the New York market such as direct
or indirect exporting, joint ventures, licensing or contracting and contract manufacturing. There
are a variety of factors influencing the choice of strategy, including, but not limited to, tariff
rates, the degree of adaptation of the product, marketing and transportation costs (Albaum &
Duerr 2011).

5.1 Entry mode chosen

After considering the various entry options and the costs associated with each, the stringent
FDA requirements and current Good Manufacturing Practices in the US, a non-export mode was

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chosen namely contract manufacturing. Using this method allows a company to break into an
international market without setting up their own manufacturing and selling operations
(Albaum & Duerr 2011). This would mean that Hot Mouth Food Distributors would have less
control over production, quality and distribution of their products.

Contract manufacturing (CM) is a strategic alliance between two parties where trust is
paramount in the quality and manufacturing standards of the product. It is also cost effective
and makes products more readily available to the customers (Moloughney 2015).

Hot Mouth intends to contract a manufacturer to make the ‘chow’ using local resources -
indigenous fruits and vegetables, labour and infrastructure. However, all the pepper will be
imported from Trinidad to be added to the fruit snack. The ingredients would be sourced and
combined according to Hot Mouth’s specifications and delivered to Caribbean stores
throughout New York.

5.1.1 Reason for choice

CM was chosen due to the restrictions on exporting fresh fruit to the USA, shipping costs,
transit time and because fruits need to be fresh and the FDA may detain food products offered
for import if shipments do not comply with US protocols (FDA 2017). Conversely, the pepper
would be dried, packaged and labelled according to regulations set by the FDA to ensure it is
available for the CM to use at the time of assembly.

The main reasons for using CM comprise:

1. The cost of setting up a manufacturing plant in New York due to high rental fees and the
time it would take to get licenses from New York Department of Agriculture and
Markets and FDA approval.
2. Entry restrictions on shipping finished goods.
3. The risk of shipping perishable produce.
4. The ability to claim made in the USA but with Trini pepper.
5. Ease of exit.

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6. Marketing mix strategy
The marketing mix is a set of controllable tactical marketing tools – product, price, place, and
promotion that the firm blends to produce the response wanted from a target market
(Armstrong & Kotler 2015).

6.1 Product, price and place

Taking into account the 4P’s of marketing, Hot Mouth ‘chow’, a high quality, delicious product,
is being offered at an introductory price of 3 USD per 5oz (150ml) cup. The ‘chow’ is priced
close to that of fresh fruits to appeal to the Caribbean diaspora and the wider public, as a tasty
fruit alternative at a reasonable price. Goods would be sold to Caribbean restaurants and Ethnic
stores throughout the city as a healthy, decadent and exciting snack, distributed through Ethnic
supermarkets and cross-merchandised next to complimentary products, such as water, tropical
juices, other spicy products and fresh fruit.

6.2 Promotion
To promote the product successfully, demographics and psychographics were used to identify
consumers’ interests, tastes, preferences, and socioeconomic characteristics. These factors
determined their patterns of consumption, which customers will buy the ‘chow’ and how they
will respond to various marketing strategies. Then the market was broken into segments,
advertising programs were developed by segment, with mainly online advertising being
implemented to increase brand awareness.

Principally, Hot Mouth promotes their product through the power of social media, such as
Facebook and Twitter. The Facebook fan page is updated regularly to provide helpful
information to all customers, which comprises; retail outlets, product information, prices and
special offers. Additionally, Food Network was approached and Hot Mouth was featured in the
series, samples were distributed during Labour Day celebrations, in strategic locations to
capture word-of-mouth advertising and a product locator App was launched, allowing
consumers to access the product.

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7. Standardisation vs adaptation
To enhance the perception of ‘chow’ in the US market the product will undergo adaptation.
Firstly, indigenous fruit will be used instead of fruit from Trinidad; secondly, the spicy snack will
be sold in cups with a spork fixed on the cover (see appendices figure 2a), enabling on-the-go
customers to enjoy and not worry about spillage as it is currently sold in clear plastic bags in
Trinidad which is the norm (see appendices figure 2b). The cup selection is two-fold as it can be
also placed in a cup holder whilst driving. Next, a label will be affixed to the cup advising of
ingredients, nutritional facts and size (see appendices figure 3). Lastly, the name of the product
will be changed from ‘chow’ to ‘spicy pickled fruits’ because from surveys conducted,
Americans identify ‘chow’ with something made for animals and might steer clear of the
product. However, the brand name will still be Hot Mouth.

8. Recommendation
It is recommended that Hot Mouth uses the 4P’s breakdown to their advantage so the brand is
synonymous with Trini pepper and essentially occupy pepper in the mind space of the
consumer, as being among the hottest peppers in the world, since this product can be
replicated and a new producer may emerge.

To confirm that quality standards are adhered to, Hot Mouth would send a third party to audit
the CM every quarter, which could be extend based on findings of the auditors.

Additionally, an ideal time to launch the product would be in June for Caribbean American
Heritage Month and again for the Labour Day celebrations.

9. Conclusion
The International market is very important in today’s business. The growth of technology
enables companies to reach previously inaccessible markets. Hot Mouth Food Distributors has
an accessible market in New York and needs to adopt strategies to enter the market. The
international market presents the potential for the company to help maximise profitability and
sustainability.

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Reference list

Albaum,G & Duerr, E 2011, International marketing and export management, 7th edn, Pearson
Education, London.

Armstrong, G & Kotler, P 2015, Marketing an Introduction, 12th Edition, Pearson Education,
Edinburgh Gate, Harlow, Essex.

Baboolal, Y 2016, Chow men, Brothers make ‘chowology’ serious business,

http://www.guardian.co.tt/your-stories/2016-02-21/chow-men, viewed 31 January 2017.

BEA 2017,
https://www.bea.gov/regional/bearfacts/pdf.cfm?fips=36000&areatype=STATE&geotype=3,
viewed 29 January 2017.

FDA 2017, http://www.fda.gov/Food/GuidanceRegulation/ImportsExports/Importing/, viewed

30 January 2017.

Hartman, L 2017, Food processing, The new wave of ethnic foods,

http://www.foodprocessing.com/articles/2016/fl-fi-ethnic-foods/, viewed 6 February 2017.

Internet World Stats.com, 2017, United States Internet Usage and 2016 Population State by
State, http://www.internetworldstats.com/unitedstates.htm, viewed 30 January 2017.

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Moloughney, S 2015, 'Contract manufacturing: Building Better Nutraceuticals', Nutraceuticals
World, vol. 18, no. 2, pp. S-12-S-19.

Pepperhead 2017, https://pepperhead.com/top-10-worlds-hottest-peppers/, viewed 27

January 2017

'PESTLE' 2007, Bloomsbury Business Library - Business & Management Dictionary, p. 5656,
Business Source Complete, EBSCOhost, viewed 5 February 2017.

US Census Bureau 2017, http://www.census.gov/quickfacts/table/PST045215/3651000,36,

viewed 31 January 2017.

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Appendices

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