INSTITUTE OF BUSINESS ADMINISTRATION

JAHANGIRNAGAR UNIVERSITY
MKT 508 (Internationa
Mar!etin"#
Individual Assignment: 01 (Chrombach Case Study)
S$%&itte' To( Mr Arafat Rahman
Course Instructor
M! "0# (International Mar$eting)
Institute of %usiness Administration
&ahangirnagar 'niversity
S$%&itte' B)( Syed Md !aimur
I( )o* +01,010-1
M! "0# (Section: S
1
)
Date o* S$%&i++ion( Sat$r'a), -.
t/
A$"$+t, 00-1
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Question: Should marketing management support the development of business in
eastern Germany?
Ans: Yes. The Marketing Management should really come up with an idea to serve the
growing number of customers in the eastern area. AS The Eastern ander formed a block of
territory! roughly s"uare of #$$ kilometers north to south! by %$$ kilometers west to east! this
meant a large amount of new probable and potential consumers can be catered to meet
their needs! which will result in an huge sales for the company. Already Three main centers
of population were identified by &hrombach as most appropriate for development!
eip'ig()resden in the south! *erlin in the centre! and +ostock in the north. S, the
consumers are identified who needs to served. -nitially! the company decided to use
distributors based in the three towns to deliver to the growing number of independent cafes
and restaurants in the new ander. The number of accounts that these three distributors
serviced had risen over the last . years from /0$ to 1.$! but the average sale was
substantially below that in the west of the country. Even so! sales had risen from 0 million
Euro to /2 million Euro over the last . years. So to meet up with the sales with western
parts! the Marketing Team needs not only support but also to come up with promotional and
sales ideas that would develop the business in eastern area.
Question: Should the company choose production and/or warehousing?
Answer: As the )elivery costs to the distributors are substantially higher and the rail
network was still inefficient. And The E3ecutives have found that! the costs of building each
of these warehouses ranged from $.% million Euro for standard warehousing to $.0 million
Euro for chilled warehousing. &hilled warehousing would allow the company to revert to a
mi3ture of road and rail delivery. This would bring transport costs into line with those of
western 4ermany. 5ith the low cost of land! the company could also consider the
development of an additional production facility in the eastern ander. This was likely to cost
around 6 million Euro for the re"uired capacity to service the eastern ander. As the cost is
lower and &hrombach is entering a new area they should go for warehousing. 7roduction
not only re"uires heavy investment but also increases the amount of losses in case sales
volumes are not up to the mark.
Question: What type of warehousing policy should be followed?
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Since The E3ecutives report stated that! the costs of building each of these warehouses
ranged from $.% million Euro for standard warehousing to $.0 million Euro for chilled
warehousing. &hilled warehousing would allow the company to revert to a mi3ture of road
and rail delivery. This would bring transport costs into line with those of western 4ermany.
Also the core products that are various meat items would have larger shelf lives if chilled
warehouse is made. So &hrombach should go for chilled warehousing.
Question: As the company moves into the new market what other implications will
there be for promotion policy and organi!ational development?
Answer: The implications that &hrombach would have while entering the market in the
eastern are as follows:
&hoosing the right promotion strategy. As the company is new and unknown to the
market.
8nderstanding the trend and demand of the consumers in the eastern areas.
4etting the right policies for setting up the warehousing.
&omplying with rules and regulations of eastern area.
8nderstanding the consumers9 minds in the Eastern ander.
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