Need for global expansion at this time

Even though Tootsie’s sales are growing, it is not fully taking advantage of the growth of the potential in the market due to inadequate advertising. It’s advertising attempts are rather subtle and not so persuasive like other companies. It seeks to advertise its brands using jingles, movies, comics and cartoons. Even though, these marketing efforts are sufficient for increasing the revenues, they are not enough to fully exploit the market potential. Tootsie Roll Industries Inc.

must make marketing and innovation its core competency and top priority to compete with the industry giants like Mars, Nestle, Cadbury and Hershey. Moreover, the company should develop a long-term strategy to get competitive edge over others in this highly competitive industry. Current operating capacity Tootsie Roll Industries currently markets its brands internationally in Canada, Mexico, and over 30 other countries. The company’s heaquarters are located in Chicago.

According to the Annual Reprot 2006, the sales and profits of the Mexico Division are doing well. Also, reorganisation of the Canadian division has resulted in sales growth and increased profitability. Additionally, Tootsie’s export division, which reaches approximately 75 countries in Europe, Asia, and South and Central America, is experiencing increased sales and profits every year. All the Tootsie brands are produced according to the demands. The highest production is of Tootsie Rolls: 62 million every day.

Also, Tootsie Roll is also the biggest lollipop producer in the world. As the company’s International Business Development Manager, I would recommend the company to expand its operations and presence in other countries such as India, Pakistan, Bangladesh, etc. This is because there is another baby boom to come and there is a lot of potential for growth in the market. This potential is not being fully exploited by the company. Also the market in other countries is ripe for such products that are not expensive, affordable and are of high quality.

In this report, I recommend the executives of the company to expand its brands’ presence in Pakistan. Although, the manufacturing should not start right away until the consumers are aware of the brands and have become loyal to them. Pakistan has a majority of younger population with increasing GDP and disposable income. Also with the awareness of family planning in the middle class, there are lesser number of members in a family thus, more disposable income is available for a person to spend. Hence, the children can spend money on their whims from time to time.

Moreover, there is an increase in the per capita income which is showing signs of emerging middle class. Hence, the rise in the incomes is making spending easier and many of the imported items affordable. The demographics of the country is also changing rapidly with over 60% of the population in the age bracket of 25 to 45 years old. The demographics of Pakistan show that there is more youth and lesser number of older members of the population. Also, since the awareness of the importance of the education is increasing, there are more educated youth who need jobs.

Hence, opening up a branch in Pakistan will prove beneficial for the company as well as for the population because it will fulfill the consumption needs of the population and also help in reducing unemployment. Target location(s) description The subsidiary for Tootsie Roll Industries should be opened in Karachi, Lahore and Islamabad because that’s where the affluent class of the Pakistani population lives. These people are brand conscious and also quality conscious and can afford to spend money on goods other than necessities of life. Cultural characteristics

The culture of Pakistan is more family- oriented, even though it is changing nowadays due to influence from the foreign media. More importance is given to family affairs such as weddings and other get together. Also, other social gatherings occur at religious important days such as Eid. Most of the rich also dine out during Ramzan for keeping and breaking fasts at Sahar and Iftar times. Hence, the company Tootsie Roll Industries can successfully market its family oriented brands such as Child’s Play and Charms Family Fun for Eid and other family gatherings.