Mktg1417 a2 _ Assignment 2 Country Analysis Part of BrandLaunch Project

COUNTRY ANALYSIS-
PART OF BRAND-LAUNCH

PROJECT

Lecturer: Phuong Phung
Group: 07

Course Name: Global Branding
Course Code: MKTG1417
Campus: SGS Campus
Due date: 15 December 2022

Word Count: 1500 (excluding cover page, reference list, figures)

I. INTRODUCTION
1. Company

Jollibee is the largest Philippines fast-food brand owned by Jollibee Foods Corporation
(JFC), with a network of more than 1,500 stores in 17 countries (Daga & Ngui 2022).

1. Specific brand of focus
Jollibee is well-known for great-tasting, high-quality, hygiene and super affordable food

products (Shastri 2021); provides joyful, warm and luxurious culinary locations for customers to
enjoy their meals in the most relaxing way (Gagliardo 2021).

2. Leverageable strengths of brand
Jollibee offers an attractive menu with more than 50 dishes, including various Western

and Asian taste cuisines to serve multicultural customers in Germany market (Thompson 2022).

Jollibee develops “Quick Service Restaurants order” (QSRs) to provide customers with food as
quickly and efficiently (Shastri 2021). Jollibee uses “Quality Improvement Cycle for Operational
Excellence” framework to maintain consistent management system to minimize unexpected
costs, allowing Jollibee to price below its competitors with cheaper menus (Bucketeer 2021).

3. Brand vulnerabilities
Jollibee initially operates as a fast-food brand, hence, its food ends up being labeled as

unhealthy products, causing health issues that seriously affects Jollibee’s brand image and sales
(Shamsul 2022). Lacking effective and viral marketing strategies for products, Jollibee’s brand
awareness and brand association are still significantly limited (Shamsul 2022).

4. Opportunity assessment
Germany is in “top 10” countries that consume the most fast food in the world (Said

2013), with 42% of German population favoring consuming fast-food frequently, which benefits
Jollibee. Germany is the biggest market for food and beverages in the EU, with higher

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purchasing power (Beck 2022). Furthermore, Germany is the leading agricultural product
producer in Europe_a potential ingredient supplier for Jollibee (Beck 2022). Hence, Jollibee
should launch business in Germany.

This paper analyzes cultural insights to help Jollibee establish proper standardization and
adaption strategies to launch business to Germany.

II. ECONOMIC-GEOGRAPHIC ENVIRONMENT
1. Geographic factors

Germany is favored with a generally temperate climate, with an extremely low frequency
of natural disasters. Without many disruptions, fast transportation can be facilitated to help
ingredients or food avoid damage if longer delivery time (Münch & Kreibich n.d). Germany is
the fourth largest country and is strategically located at the center of the European Union,
convenient for potential firms to connect to EU markets, consequently, by expanding into
Germany, Jollibee can reach a wider customer range (Wolters Kluwer 2020).

2. Major products
German agriculture has a high self-sufficient rate which satisfies 60% of national demand

(Klöckner 2020). Half of Germany's plants is used for agricultural purpose, producing high-
quality products. Some of Germany’s agricultural production is excessive (over 100%
production) (Figure 1) resulting in agri-goods surplus (S>D), leading to lower prices (ITA 2022).
Utilizing domestic agricultural products for fast-food production will save importing costs and
ensure freshness of ingredients for Jollibee dishes (ITA 2022).

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Figure 1: Average rate of self-sufficiency in Germany for selected products from 2016-2018
(Klöckner 2020).

3. Economic conditions
Germany’s inflation is still high due to Covid-19 and Russia-Ukraine war

(TrandingEconomics 2022). Germany's GDP tends to increase every year until 2026 (O’Neil
2022). Germany has a high living standard, good education, a strong & stable economy, and a
good work-life balance. The German workforce is highly skilled. Germany has one of the lowest
unemployment rates in Europe, with an increasing employment rate of 77.3% in 2022 recovering
from Covid-19 period due to strict vaccination progress of German government (European
Commission n.d) with higher average household income (€52,200/person/year), and high

customer purchasing power (OECD 2021)

4. Infrastructure
Germany includes the 4th largest airport system (Frankfurt Airport), the longest and

largest railway network in Europe, 74 important seaports, transshipment hubs, and costless
motorways, assisting in the convenient and affordable transit of commodities across the world
(GTAI 2022). Germany develops easy-to-use food door-to-door delivery service systems making
ordering food quick and easy "in 10 minutes" (Expatrio 2022).

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III. SOCIAL-CULTURAL ENVIRONMENT
1. Demographic trends

Jollibee's primary target segmentation is kids 3-10 years old, Gen Z (10-25), and
Millenials (26-41). Kids, GenZ, and Millennials dominate approximately 42% of Germany’s
population, resulting in large potential consumer range for Jollibee (Figure 2).

Figure 2: Germany Population (Statista 2021)
German has had a higher level of birth rate since 2016-2021, average of 1.57, compared
to 2010-2015, average of 1.43 (Figure 3). Birth rate increases resulting in young population
growth with expanded fast & convenient food demand, subsequently, rising the number of
Jollibee’s sales.

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Figure 3: Germany’s fertility rate (Statista 2020).
Germany shows a high literacy rate - a total population of 99% (OECD n.d), leading to
significantly higher per capita income (OECD 2022), increasing purchasing power for fast-food.

Thus, Jollibee benefits from this.
2. Cultural analysis
English is used as one of the official languages in both Germany and the Philippines so
the language barrier is not serious (Cabigon 2015)
The main religion in Germany is Christianity. The Christian religion isn’t restricted to
eating. Most traditional German meals focus on bread, potatoes, and meat (Expatrio 2022).
Subsequently, Jollibee can become a good choice for Germans meals because it has a diverse
menu to sufficiently serve German preferences.
Males consume fast-food more than females (over 58.5%). German males occupied
49.46% of the population (nearly half of population), also considered a high demand for fast-
food in Germany (UN 2021).
Filipino cuisine is considered one of most world’s richest cuisine (BusinessWorld 2022),
Jollibee can maximize its perceived quality thanks to its Country-Origin impacts.
3. Social institutions

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Over 67% of German parents believe in healthy eating habits and encourage their
children to limit fast-food (MOTTPoll.org 2021), which gradually switch younger to buying
organic, healthy products (ITA 2020), exposing a challenge for Jollibee. Germany is
multicultural due to the large immigrant number, with food preference diversity (Heider et al
2020). Thanks to diverse menus, Jollibee still can meet demand of German customers.

4. Informal trade barriers
German communication and negotiation values honesty, directness, explicitness, and

transparency (Takhtarova 2020). Being too direct caused Germans to be evaluated as “rude” and
“difficult”. Thus, humor, kindness, and friendliness are suggested to use in communication,
especially in shared lunches and drinks to create trust with German colleagues, and reach
common topics, which matches up with Jollibee’s attributes as fun, kind-hearted, and

friendly,making Jollibee more welcome in the German market.

IV. POLITICAL-LEGAL ENVIRONMENT

1. Government and politics
There are virtually no volatile political issues in Germany affecting businesses, placing

4th position of top countries viewed as most politically stable globally (U.SNews 2021).
Germany and the Philippines have had friendly relations for more than 68 years of diplomatic
establishment (since1954) (Federal-Foreign-Office 2022). “EU-Philippines Framework
Agreement on Partnership and Cooperation” and “EU-Philippines FTA” were established that
facilitate Philippine-Germany trade (Germany is an EU member) (European Commission n.d).
That is in favor of Jollibee expanding its business in Germany.

2. Formal trade barriers
German tax laws are extremely complicated. Businesses must make nine tax payments

per year, consuming on average 218 hours of business time (Wolters Kluwer 2020). Registering
property ownership is a burden, new companies must seek an extract from the land registry,

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notarize the transfer agreement, acquire a waiver of pre-emption rights with the municipality and
pay a transfer tax (Wolters Kluwer 2020). Furthermore, Germany’s tariff is also high.

3. Promoting global business analysis
The program of lowering the corporate tax rate in Germany from 15% to 10%, would

reduce the tax burden on corporate profits from 30% to 25%, benefiting new entering businesses
in Germany (IFO 2020). The incentive scheme provides a 25% tax incentive for in-house R&D

activities in Germany, available to companies regardless of their size or economic position
(Deloitte 2020). Small foreign companies can access German government grants as high as 40%
of the set-up value, and maximum of 20% for large companies (LawyersGermany 2018)

4. Intellectual property
In Germany, intellectual property is protected from imitation through the granting of

intellectual property rights (IPR). Germany encourages early registration of creators for
trademarks, brand logos or images, words, or phrases to retain property rights. Germany is also a
member of many major organizations providing safety for business with strong protection of IPR
(ITA 2019)

V. EVALUATION
Due to German government's incentives, Political-legal environment is favorable and
ideal but there are still numerous trade hurdles. In terms of the Economic-Geographic
environment, Germany's geographical and economic conditions are generally steady but still hurt
by Covid-19 epidemic and Russia-Ukraine war consequence. Social-Cultural Environment
shows an increase in fast-food demand in Germany becasue of Jollibee's broad customer range,
high birth rate, literacy rate, but struggling with social status of fast-food being
unhealthy. Consequently, standardization and adaption strategy should be used to address those
issues.
Standardization should be applied to price, product & service quality, and brand image.
Jollibee’s brand essence as ‘super affordable, great-taste high-quality, bringing the joy of eating

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to all customers’ should be consistent globally to build global brand equity. Due to varied
economic conditions through Covid-19 pandemic and war, consumers will become more price-
sensitive. Hence, Jollibee should maintain product budget-friendly with all its business models
and standardized management systems to avoid increases in operating costs, to maintain

consistently affordable price for products.

Jollibee should handle adaptation strategies in place, promotion, and product categories.
Firstly, Germany is a famous destination for immigrants from around the world, thus, Germany
is multicultural and multi-religious belief. Jollibee’s recipes and menus should be adjusted to
serve different customer ranges (Statista 2022). Secondly, Jollibee stores should adaptably be
placed at well-known goods chains or Mall Centers, where German children, Gen-Z, or
Millenials often go. Therefore, Jollibee can seek partnerships with German store chains such as
Edeka or Steinecke (food chains) or Westfield CENTRO (Germany's largest shopping mall)
(Statista 2022) to approach target customers. Jollibee should implement an adaptation promotion
strategy to fit the German young inviting viral food reviewers or bloggers in Germany to review,
ratings, and public word of mouth about the product because they have a huge influence on
German youth.

VI. REFERENCES
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