Nathan’s Famous, Inc.

International Marketing Plan

Christian Levengood

Rollins CollegeDr. Marc Fetscherin

30 April 2015

Table of ContentsExecutive Summary.........................................................................................................................0

1 Company Analysis........................................................................................................................11.1 The Company......................................................................................................................................1

1.1.1 Brand Image.................................................................................................................................11.1.2 Human Resource Management....................................................................................................11.1.3 Corporate Social Responsibility (CSR).......................................................................................1

1.2 Organizational Structure......................................................................................................................21.2.1 Internal Analysis..........................................................................................................................21.2.2 Target Market Profile and Product Categories.............................................................................21.2.3 Financial Information...................................................................................................................31.2.4 International Business Activities..................................................................................................41.2.5 Marketing Overview....................................................................................................................41.2.6 Industry Analysis.........................................................................................................................51.2.7 Competitor’s Table.......................................................................................................................6

1.3 Conclusions and Recommendation.....................................................................................................7

2 Global Market Search...................................................................................................................72.1 Country Selection................................................................................................................................7

2.1.1 Criteria Selection..........................................................................................................................72.1.2 Country Comparison....................................................................................................................8

2.2 Country Evaluation..............................................................................................................................92.3 Conclusions and Recommendation.....................................................................................................9

3 Market Analysis............................................................................................................................93.1 PEST Analysis.....................................................................................................................................9

3.1.1 Australia.......................................................................................................................................93.1.2 Germany.....................................................................................................................................103.1.3 Brazil..........................................................................................................................................11

3.2 Competitive Analysis........................................................................................................................123.2.1 Main Competitors.......................................................................................................................123.2.2 Globalization..............................................................................................................................13

3.3 Country Selection..............................................................................................................................133.3.1 Criteria Selection........................................................................................................................133.3.2 Country Side-By-Side Comparison............................................................................................133.3.3 Evaluation and Country Selection..............................................................................................14

3.4 Conclusions and Recommendation...................................................................................................14

4 Marketing Plan............................................................................................................................154.1 Market Entry Mode...........................................................................................................................154.2 Marketing Mix: Four P’s...................................................................................................................15

4.2.1 Product/Service..........................................................................................................................164.2.2 Price............................................................................................................................................164.2.3 Promotion...................................................................................................................................164.2.4 Placement...................................................................................................................................17

4.3 STP Process.......................................................................................................................................184.3.1 Segmentation..............................................................................................................................184.3.2 Targeting....................................................................................................................................184.3.3 Positioning..................................................................................................................................18

4.4 Conclusions and Recommendation...................................................................................................18

References......................................................................................................................................19

Appendix........................................................................................................................................21

Executive SummaryThis marketing plan has been developed for the American fast food corporation Nathan’s Famous, a company known for the best beef hot dogs in the world. Nathan’s is interested in expanding globally, so this analysis will look at potential international markets that the company is not already in and evaluate the top country that the company should enter. With limited time and money to spend on food, the fast food industry has been the perfect solution for many families. Although, for the most part, the food is not very healthy, the industry still generates billions of dollars worldwide yearly. Therefore, the industry is in the mature stage of the life cycle and appears as if it will remain for many years to come.Based on the research in this analysis, the most attractive nation for Nathan’s Famous to enter next is Australia. This country has high annual meat consumption per capita, high GDP per capita, and high fast food expenditure per capita, which makes it attractive for a meat-selling, fast food company like Nathan’s. The main competitors in this market are McDonald’s and KFC, which are also major competitors in their home market. Therefore, Nathan’s should market its products at competitive prices in order to gain market share in Australia. The recommended entry mode is franchising with local Australian investors because this the business model used in a limited number of other foreign markets. In addition, it limits Nathan’s risk as well as allows the company to gain understanding of this Western market. In the future, Nathan’s could establish company-owned locations in order to fully reap the benefits of globalization.

0

1 Company Analysis

1.1 The Company

1.1.1 Brand ImageNathan Handwerker, a Polish immigrant, founded Nathan’s Famous in 1916 in Coney Island, New York.1 Nathan’s began selling hot dogs and crinkle-cut French fries that were developed and seasoned by his wife, Ida. Despite its small-scale start, Nathan’s opened its second restaurant in 1957, which was followed by two more restaurant openings within the next twelve years. Nathan’s Famous became a publicly traded company in 1993 and started expanding their operations through co-branding. From 1999-2006, Nathan’s had acquired a few food chains, including Kenny Rogers Roasters and Arthur Treacher’s. Nathan’s also expanded their operations into international locations using a franchise model to limit the risks involved with opening a new store.2

Figure 1: Nathan’s Famous Logo3

1.1.2 Human Resource ManagementThe core values of Nathan’s Famous are to deliver unparalleled service, high-quality products, and excellent value that exceed customer expectations. Their mission is “to be the premier provider of brand name quick-serve food, offered through restaurants and a variety of other retail environments”4. Nathan’s is able to achieve this by focusing on customer service. By providing guests with memorable experiences, Nathan’s builds customer loyalty and is able to keep guests coming back for more food products.5 Furthermore, Nathan’s Compensation Committee, which is selected by the Board of Directors, has the responsibility of assessing executive officer compensation plans, guidelines, and programs.6

1.1.3 Corporate Social Responsibility (CSR)Nathan’s Famous undertakes its social responsibility by partnering with KaBOOM! in a campaign called “Ready. Set. PLAY!” This initiative is targeted towards children and hopes to promote active play across the United States (U.S.). Nathan’s realizes that an active lifestyle is

1 http://www.nathansfamous.com/story/extended_history2 http://search.proquest.com.ezproxy.rollins.edu:2048/hooverscompany/docview/230597563/abstract/B29DDD25A0E34585PQ/1?accountid =13584#3 http://www.nathansfamous.com/assets/logo-0ae3f64df541bc3d0d77e8ebf98a86fd.png4 http://www.fundinguniverse.com/company-histories/nathan-s-famous-inc-history/5 http://www.fundinguniverse.com/company-histories/nathan-s-famous-inc-history/6 http://media.corporate-ir.net/media_files/IROL/11/113414/NATH_Updated_Compensation_Committee_Charter_9.14.pdf

1

on the decline throughout the country and this leads to an increased risk of developing obesity. The campaign consists of three stages: design day, in which children draw their vision of an ideal playground; the plan, in which designs are completed and preparations for building have started; and, build day, in which volunteers help construct a new playground. Nathan’s and KaBOOM! are able to create active opportunities to youngsters across the country. Nathan’s is concerned with generating value for its shareholders, but is also concerned with promoting an active lifestyle. Therefore, Nathan’s promotes both transparency and ethical behavior in its activities.7

1.2 Organizational Structure

1.2.1 Internal AnalysisNathan’s Famous (NASDAQ:NATH) is a publicly traded parent company that operates in the food-service industry. The company sells a variety of branded products, such as beef hot dogs and crinkle-cut French fries. Nathan’s started with its first restaurant in Coney Island; however, since then, the company has expanded greatly and currently sells hot dogs throughout the U.S., Canada, and a small number of other countries.8

Like any company, Nathan’s does well in some specific areas, but needs to make changes to excel in the food-service industry. There are also some opportunities that may help improve their operations and some threats that may hinder their ability to compete on a global level. Table 1 illustrates a SWOT Analysis for Nathan’s Famous.

SWOT AnalysisStrengths High-quality service

Wide sales network (restaurants, supermarkets, online) Continues to expand globally Increased year-to-year revenue Hosts a competitive eating cost annually in Coney Island Continues to expand its sale of products through third-party operators

Weaknesses Low number of restaurants in the Midwestern U.S. Lack of marketing (when compared to other industry giants i.e. McDonald’s) High costs Low net income

Opportunities Increasing market due to increased need for quick food options Expand restaurants to other countries in Western Europe and East Asia Increase their co-branding operations

Threats National economic instability High degree of competition from other fast-food retailers Entrance of new fast-food businesses to the American market Changes in consumers’ tastes and preferences

Table 1: Nathan’s SWOT Analysis

1.2.2 Target Market Profile and Product CategoriesNathan’s Famous utilizes a unique strategy in order to expand their operations. Nathan’s focus is on confined market settings, including shopping centers and airports. The company likes to focus on small, flexible units with low start-up costs in order to deliver quality food at a reasonable 7 http://www.nathansfamous.com/kaboom8 http://www.lexisnexis.com.ezproxy.rollins.edu:2048/hottopics/lnacademic/

2

price. It also sought after forming alliances with companies that already generated significant traffic in their stores, such as Home Depot. Figure 2 shows Nathan’s wide array of products, including beef hot dogs (can be topped with chili, cheese, etc.), crinkle-cut French fries (can be topped with bacon, chili, cheese, ranch, etc.), hamburgers (can be topped with bacon, cheese, etc.), Philly cheesesteaks, chicken tenders, chicken sandwiches, chicken wings, corn dogs, hot dog nuggets, and onion rings. Some Nathan’s locations sell Arthur Treacher’s products, such as fish ‘n chips, shrimp ‘n chips, clam ‘n chips, fish sandwiches, clams sandwiches, and lobster salad sandwiches.9 Nathan’s also retails numerous meal replacement items in grocery stores, such as French fries, onion rings, chicken strips, pickle spears, condiments (ketchup, mustard), and beef hot dogs. By being available through a number of different channels, it gives Nathan’s the opportunity to connect with a wide array of customers.10

Figure 2: Nathan’s Product Categories11

1.2.3 Financial InformationNathan’s Famous, Inc. is a publicly traded company, so it must disclose its financial information after each quarter as well as at the end of the year. Table 2 illustrates the Net Income obtained by Nathan’s Famous for the last three years.

Financial Information for Nathan’s Famous, Inc.

YearTotal Revenue (in millions of

$)

Number of Full-time Employees

Number ofLocations

Net Income(in millions of

$)

Gross Profit(in millions of

$)2012 66.222 219 304 6.158 10.2632013 71.543 161 308 7.468 11.7822014 82.927 210 329 8.327 12.449

Table 2: Net Income for Nathan’s Famous, Inc.12

9 http://www.nathansfamous.com/restaurants/menu10 http://www.fundinguniverse.com/company-histories/nathan-s-famous-inc-history/11 http://franchise.nathansfamous.com/assets/images/hero-menu.jpg12 http://www.sec.gov/Archives/edgar/data/69733/000143774914011106/nath20140330_10k.htm

3

1.2.4 International Business ActivitiesNathan’s currently serves up hot dogs in approximately 300 restaurant locations in eleven countries (Figure 3). The brand is well established in the United States, especially in the Northeast and Southeast. Nathan’s sells its products in over 40,000 retail stores around the world. Nathan’s has huge potential to expand into untapped markets in Asia, Africa, and South America, which could further increase their international business activities.13

Figure 3: Nathan’s International Restaurant Locations14

1.2.5 Marketing OverviewNathan’s Logo (Figure 4) consists of their famous hot dog topped with mustard, with the caption of “America’s Favorite Hot Dog”. This caption signals the brand’s association with the United States, as well as some other Central American countries. The hot dog image below can signal the high-quality Nathan’s strives to deliver to all of its customers globally.

13 http://www.nathansfamous.com/story/extended_history14 http://www.nathansfamous.com.my/images/nathans-map-deae1600e2773a4a561057252b62f3cc_900x477.png

4

Figure 4: Nathan’s Famous America’s Favorite Logo15

Nathan’s Famous, Inc. is engaged in the marketing and sale of its branded products through multiple channels of distribution. Nathan’s has followed co-branding and co-hosting initiatives in order to further its growth in the food-service industry. The major channels of distribution include: operation of Nathan’s Famous quick-service restaurants; franchise and Branded Menu Program; Branded Product Program; and, licensing program. Nathan’s is focused on market penetration of the brand. Their efforts have been focused on the following: expanding the amount of locations using the Branded Product Program; expanding the amount of native franchised Nathan’s restaurants; expanding the licensing program for packaged goods through both geographic expansion and new product launches; and, operating current company-owned locations. These potential strategies provide Nathan’s with the ability to penetrate into new markets.16

1.2.6 Industry AnalysisThe global fast-food industry is expected to grow through 2019, starting with over a 4% increase in 2015. In addition, global consumer spending is predicted to rise at an average yearly rate of 4% over the next five-year period.17 Figure 5 on the following page is an industry analysis utilizing Porter’s Five Forces Model.Intensity of Rivalry: Competition between fast-food businesses in the world is extremely high as there are many companies operating in both the United States as well as in foreign countries. These companies also face competition from full-service restaurants because consumers have the option to dine out if they have both time and money to spend. The major fast-food companies with global operations are: McDonald’s Corporation (16.6% market share), Yum! Brands, Inc. (11.1%), Subway (3.6%), and Burger King Worldwide Inc. (3%).18

Threat of New Entrants: The threat of new entrants is high because there are low barriers to entry in this industry. A fast-food operation can begin with relatively little capital by renting property and equipment. In addition, the new company does not need to have an existing customer base. It would be wise for new entrants to cater to current trends, such as serving healthy alternatives to differentiate themselves.19

Threat of Substitutes: Fast-food restaurants are clearly an option for someone who is always on the go and needs a convenient place to get food. However, for those who have more time and money to spend on food, there are more options for them to choose from. These people can purchase food at grocery stores and cook at home. They may also choose to eat at full-service restaurants in which their meals are made to order, as opposed to food that is cooked prior to an order being taken. In addition, changes in consumer preferences, such as a demand for healthy, quality options, have led to changes in purchasing behavior.Bargaining Power of Suppliers: A company’s relationship with suppliers is extremely important because it affects their net income. Supplies in this industry are dictated by the market

15 http://pal-pac.org/wp-content/uploads/2014/01/nathans-hot-dogs.jpg16 http://www.sec.gov/Archives/edgar/data/69733/000143774914011106/nath20140330_10k.htm17 http://clients1.ibisworld.com/reports/gl/industry/industryoutlook.aspx?entid=148018 http://clients1.ibisworld.com/reports/gl/industry/majorcompanies.aspx?entid=148019 http://clients1.ibisworld.com/reports/gl/industry/competitivelandscape.aspx?entid=1480

5

price of the product, so there is little bargaining power on the company side. Maintaining good relations with suppliers is important in order for products to be delivered on time.Bargaining Power of Buyers: Consumers do not have much ability to negotiate prices, but they do have the ability to spread their opinion quickly through social media and word-of-mouth. If a consumer believes that he/she received poor quality products and poor customer service, then it is likely for the word to spread to the local population, which can negatively impact the business.

Figure 5: Porter’s Five Forces for Fast-Food Industry

1.2.7 Competitor’s TableNathan’s faces competition from a large number of competitors, including McDonald’s Corporation and Yum! Brands, Inc. Table 3 is a competitor’s analysis for Nathan’s Famous. On the following page, Figure 6 shows a positioning map for the fast food market.

Major Companies Nathan’s Famous McDonald’s Corporation Yum! Brands, Inc.Ticker20 NATH MCD YUM

Market Cap (in millions of $)21 327 92,600 33,600Revenue (in millions of $)22 82.927 27,400 13,300

Number of Full-time Employees23 210 440,000 539,000Number of Locations 329 36,25824 40,31125

Net Income (in millions of $)26 8.327 4,760 1,050Table 3: Nathan’s Famous Competitor’s Table

20 http://money.cnn.com21 http://money.cnn.com22 http://www.sec.gov/edgar/searchedgar/companysearch.html23 http://www.lexisnexis.com.ezproxy.rollins.edu:2048/hottopics/lnacademic/24 http://www.statista.com/topics/1444/mcdonalds/25 http://www.yum.com/investors/restcounts.asp26 http://www.sec.gov/edgar/searchedgar/companysearch.html

Rivalry HIGH

Threat of New

Entrants HIGH

Buyer Power

MEDIUM

Threat of Substitutes HIGH

Supplier Power

MEDIUM

6

Figure 6: Positioning Map

1.3 Conclusions and RecommendationNathan’s Famous offers customers high-quality products and high-quality customer service. They offer a wide range of options, including hot dogs, chicken tenders, seafood, and crinkle-cut French fries. However, in general, the fast-food industry is extremely competitive and offers consumers with a wide array of substitutes. This may negatively affect Nathan’s ability to compete with huge, global corporations, such as McDonald’s.

2 Global Market Search

2.1 Country Selection

2.1.1 Criteria SelectionNathan’s is currently present in eleven countries in the Americas, Europe, Africa, and the Middle East, so there is a wide array of nations that the company can select for its next market entry. In order to limit the number of potential nations that Nathan’s Famous can enter, a Likert scale is used to give ratings to the selected variables to assess the strengths and weaknesses of certain countries. The countries that receive the highest scores from the ratings will be the top contenders. Each variable is rated on a scale from 1 to 5, with 5 being the highest possible score.

7

To begin the search for the next market entry, four variables were selected in order to determine the top three potential markets for Nathan’s. To limit the number of possible countries, two variables, population and annual meat consumption per capita, helped limit the number of countries available for selection. For population, a country needed to have at least 20 million citizens because it makes sense to choose a country with a large population to enter since hot dogs are relatively cheap products. Annual meat consumption per capita is also important; the cutoff amount for this variable is 40 kilograms per person per year, which is slightly below the world average. The next variable considered is Gross Domestic Product (GDP) per capita because it serves as an indicator of the overall economic productivity of a nation. The final variable considered is fast food expenditure per capita because it shows how much each person, on average, spends on fast food each year and is vital for sustaining our business. Exhibit 1 in the appendix shows the Likert Scale used for Table 4 shown in the next section.

2.1.2 Country ComparisonNine countries are ranked on a scale from one to five in Table 4, which is based on the Likert scale that appears in Exhibit 1. Exhibit 2 shows the nine countries weighted equally by the four variables, each consisting of 25% of the total. The countries appearing in Table 4 are: England (Eng.), Australia (Aus.), Japan (Jpn.), China (Chn.), Germany (Ger.), France (Fra.), Spain (Esp.), Italy (Ita.), and Brazil (Bra.). The weighting used in Table 4 was determined by the importance of each variable for Nathan’s new potential market entry. Population accounted for 40%, annual meat consumption per capita accounted for 30%, GDP per capita accounted for 20%, and fast food expenditure per capita consisted of the remaining 10%. The individual ratings were added together and each country received an overall weighted rating.

Factors Wt. Eng. Aus. Jpn. Chn. Ger. Fra. Esp. Ita. Bra.Population

(in millions)27 64.1 23.13 127.3 1,357 80.62 66.03 46.65 59.83 200.4

Rating (1-5) 1 1 3 5 2 1 1 1 4Wt. 40% 0.4 0.4 1.2 2 0.8 0.4 0.4 0.4 1.6

Annual Meat Consumption per Capita (in kg)28

84.2 111.5 45.9 58.2 88.1 86.7 97 90.7 85.3

Rating (1-5) 3 5 1 1 4 4 4 4 3Wt. 30% 0.9 1.5 0.3 0.3 1.2 1.2 1.2 1.2 0.9

GDP per Capita(in thousands of $)29 41.79 67.46 38.63 6.81 46.27 42.5 29.86 35.93 11.21

Rating (1-5) 4 5 4 1 4 4 3 4 1Wt. 20% 0.8 1 0.8 0.2 0.8 0.8 0.6 0.8 0.2

Fast Food Expenditure per

Capita (in $)30390.3 362.7 281.0 10.10 101.9 95.60 82.70 55.40 44.10

Rating (1-5) 5 5 4 1 2 2 2 1 1Wt. 10% 0.5 0.5 0.4 0.1 0.2 0.2 0.2 0.1 0.1

Overall 100% 2.6 3.4 2.7 2.6 3 2.6 2.4 2.5 2.8

27 http://data.worldbank.org/indicator/SP.POP.TOTL?order=wbapi_data_value_2013+wbapi_data_value+wbapi_data_value-last&sort=desc28 http://chartsbin.com/view/1273029 http://data.worldbank.org/indicator/NY.GDP.PCAP.CD?order=wbapi_data_value_2013+wbapi_data_value+wbapi_data_value-last&sort=desc30 http://www.portal.euromonitor.com.ezproxy.rollins.edu:2048/portal/analysis/tab

8

Table 4: Country Side-by-Side Comparison (Top 9)

2.2 Country EvaluationThe evaluation of each country is based on its rating on the four variables with scores ranging from the highest (5) to the lowest (1). The weights were determined based on the relative importance of each variable for the company being analyzed. Population is one of the most significant variables there is when considering international expansion, so it is given the most weight. Since Nathan’s Famous sells meat products, it was also determined that this variable should hold substantial weight. As seen above, the top three country’s overall scores are boldfaced in the bottom row of Table 4.

2.3 Conclusions and RecommendationTable 4 shows the top three countries with the highest total scores. These countries are Australia (3.4), Germany (3), and Brazil (2.8). After this initial selection, more analysis on each of these individual countries is needed to determine the one new market entry for Nathan’s Famous. After determining the one country, a mode of entry and other important factors, such as the 4 P’s, will be established for entering the new market.

3 Market Analysis

3.1 PEST Analysis

3.1.1 Australia31

Political Factors: Australia’s government type is a federal parliamentary democracy and a Commonwealth realm, guided by the constitution that was effective starting in 1901. It is a founding member of the United Nations (UN) in 1945. It belongs to a variety of international organizations, such as the G-20, the International Monetary Fund (IMF), and the World Health Organization (WHO).Economic Factors: Australia has experienced continued economic growth of about 3.5% per year for over 20 years. Australia also features low unemployment (5.7% in 2013), controlled inflation for consumer prices (2.4% in 2013), low public debt (32.6% of GDP in 2013), and a strong, stable financial system. The services sector is the biggest section of Australia’s economy, accounting for 75% of jobs and 70% of GDP. Australia’s GDP purchasing power parity (PPP) in U.S. dollars is $998.3 billion in 2013. Australia has minimal restrictions on imports, which has helped increase productivity, stimulate growth, and make the economy more dynamic. The exchange rate in 2013 was 1.031 Australian dollars (AUD) per U.S. dollar.Social Factors: Australia’s population size was 23.13 million in 2013 with a 1.09% annual growth rate (2014 est.). About 89% of the population lives in urban areas (2011), which consists of cities including Sydney, Melbourne, Brisbane, Perth, Adelaide, and Canberra (capital). The

31 https://www.cia.gov/library/publications/the-world-factbook/geos/as.html

9

total school life expectancy is 20 years, while education expenditures only account for 5.6% of GDP (2010).

Figure 7: Australia Map

Technological Factors: Australia has a well-built infrastructure that can be accessed through 480 airports and 1 heliport, 38,445km of railways, 823,217km of roadways, and 2,000km of waterways. Australia also has a well-developed telephone system consisting of 10.47 million main lines and 24.4 million mobile cell phone users in 2012. Australia has 15.81 million Internet users (2009).

3.1.2 Germany32

Political Factors: Germany has a federal republic form of government and operates under a constitutional document called Grundgesetz, which translates to Basic Law. This document was established in 1949 after the Second World War. Germany continues to have relations with more than 190 countries. It also is a major financial contributor to some international organizations, including, but not limited to, the European Union (EU) and the North Atlantic Treaty Organization (NATO). Germany is also a member of the UN, WHO, G-20, and G-8. Economic Factors: The German economy is the 5th largest in the world in terms of PPP and is also Europe’s largest economy. Its GDP PPP is $3.227 trillion in 2013; most of their exports consist of machinery, automobiles, chemicals, and household equipment, benefitting from a highly skilled and trained workforce. However, prior to the early 2000s, Germany experienced high unemployment rates and low average growth. Reforms were passed in order to decrease unemployment, increase average growth, limit hour worked, and establish a minimum wage of $11 per hour. In 2013, the unemployment rate was 5.3%, an inflation rate for consumer prices of 1.6%, and an exchange rate per U.S. dollar of 0.7634 euros (EUR). Social Factors: Germany had a population of 80.62 million in 2013 with a -0.18% annual growth rate (2014 est.). About 74% of the population lives in major urban areas (2011), which

32 https://www.cia.gov/library/publications/the-world-factbook/geos/gm.html

10

consists of cities such as Berlin (capital), Hamburg, Munich, and Cologne. German education expenditures account for 5.1% of GDP (2010) and total school life expectancy of 16 years.

Figure 8: Germany Map

Technological Factors: Germany has a well-constructed, complex infrastructure consisting of 539 airports and 23 heliports of airways, 41,981km of railways, 645,000km of roadways, and 7,467km of waterways. Germany also has a well-developed communication system, with 50.7 million main telephone lines and 107.7 million mobile phone users in 2012; in 2009, Germany had 65.125 million Internet users.

3.1.3 Brazil33

Political Factors: Brazil’s government is a federal republic and received its independence in 1822 from Portugal. Brazil’s constitution was last ratified in October 1988, but it has been amended on multiple occasions. Brazil has three branches of government, which the U.S. also has. Brazil is a member of many international organizations, such as the G-20, UN, WHO, and World Trade Organization (WTO). Economic Factors: Brazil’s economy is the largest in South America with a GDP PPP of $2.416 trillion in 2013. Well-developed agricultural, mining, manufacturing, and service sectors characterize Brazil’s economy. The middle class is also growing very quickly as well as Brazil’s presence in global markets. Reforms were passed to help slow down increased inflation, while unemployment has dropped to historic lows. The income inequality has also declined annually for more than a decade. Brazil attracts foreign investment due to its high interest rates. In 2013, the unemployment rate was 5.7%, the inflation rate for consumer prices was 6.2%, and the exchange rate per U.S. dollar was 2.153 reals (BRL). Social Factors: Brazil’s population size was 200.4 million in 2013 with an annual growth rate of 0.8% (2014 est.). About 85% of the population lives in major urban areas (2011), which consists of cities such as Sao Paulo, Rio de Janeiro, Belo Horizonte, Porto Alegre, Recife, and Brasilia

33 https://www.cia.gov/library/publications/the-world-factbook/geos/br.html

11

(capital). Brazil education expenditures account for 5.8% of GDP (2010) and about 90% of the population over the age of 15 is able to read and to write.

Figure 9: Brazil Map

Technological Factors: Brazil has an expansive and well-developed infrastructure that contains 4,093 airports and 13 heliports of airways, 28,538km of railways, 1,580,964km of roadways, and 50,000km of waterways. Brazil also has an extensive telephone system consisting of 44.3 million main telephone lines and 248.324 million mobile cell phone users in 2012; Brazil’s number of Internet users exceeded 75 million in 2009.

3.2 Competitive Analysis

3.2.1 Main CompetitorsIn Australia, the largest fast food operator was McDonald’s, which had a 25% market share in 2013. Fast food offers convenience, low prices, and long hours of operation, which has received positive feedback from Australian consumers who are shifting from expensive table-service restaurants to quick-service locations.34

In Germany, McDonald’s was the leader in 2013 with a 33% share of the market. Germans are influenced by brand recognition, seniority, and product portfolios, which, for example, help differentiate McDonald’s from Burger King. Germans’ eating habits are shifting towards healthier, lighter options that do not contain unhealthy ingredients, which is important for a company trying to enter this consolidated market.35

In Brazil, 32% of the market belonged to McDonald’s in 2013. However, Burger King and Subway are two other strong competitors in this rapidly growing industry. Burger King is expanding by building more stores in new cities that are not very exposed to the brand. These

34 http://www.euromonitor.com/fast-food-in-australia/report35 http://www.euromonitor.com/fast-food-in-germany/report

12

changes will help the fast food industry grow in Brazil as well as other South and Latin American countries.36

3.2.2 GlobalizationGlobalization illustrates how open one country is to other countries and cultures. The KOF Globalization Index measures three dimensions: economic, social, and political. The higher the measure, the more globalized a country is. Table 5 illustrates the top 3 countries as well as the U.S. (home country) in terms of how globalized each is.

Country KOF Globalization Index (2015)

KOF Economic Globalization

(2015)

KOF Social Globalization

(2015)

KOF Political Globalization

(2015)Australia 81.64 74.33 82.11 91.03Germany 78.86 64.10 83.75 92.17

Brazil 59.74 50.96 44.24 94.23U.S. 74.81 58.77 77.95 92.41

Table 5: Globalization Indexes37

As seen above, Australia is the most globalized out of the four countries at hand, whereas Brazil is the least globalized.

3.3 Country Selection

3.3.1 Criteria SelectionTo deeply assess the top three potential nations for Nathan’s Famous to enter, a second Likert scale is used. The original four variables as well as four new variables are used to rate each country. The first new variable is ease of doing business, which assesses 189 economies from 1-189 with the low values being the best nations to conduct business in. The second variable is the unemployment rate, which refers to the percentage of the labor force that is both without a job and actively looking for work. The third variable is inflation for consumer prices, which represents the yearly change in prices for the average customer. Both the unemployment rate and inflation rate are measured in percentages. The final variable is the logistics performance index, which illustrates a country’s efficiency on its ability to trade in a timely manner. It also accounts for the quality of transport infrastructure and the ability to track shipments. In order to rate the eight factors, the criteria used in section 2.1.2 accounts for 80% of the rating, while the remaining 20% is comprised of the four new variables. Exhibit 3 in the Appendix shows the Likert scale used for Table 6 in the following section as well as Exhibit 4, which illustrates equal weights based on the proportion used.

3.3.2 Country Side-By-Side ComparisonIn the following table, the top three countries are compared based on specific criteria that affect the fast food industry. However, half of the variables used come from the original narrowing

36 http://www.euromonitor.com/fast-food-in-brazil/report37 http://globalization.kof.ethz.ch/media/filer_public/2015/03/04/rankings_2015.pdf

13

down of countries. These additions help illustrate the key differences of these three countries in order for Nathan’s to continue its international expansion.

Factors Wt. Aus. Ger. Bra.Population (in millions)38 23.13 80.62 200.4

Rating (1-5) 1 2 4Wt. 32% 0.32 0.64 1.28

Annual Meat Consumption per Capita (in kg)39 111.5 88.1 85.3

Rating (1-5) 5 4 3Wt. 24% 1.2 0.96 0.72

GDP per Capita (in thousands of $)40 67.46 46.27 11.21Rating (1-5) 5 4 1

Wt. 16% 0.8 0.64 0.16Fast Food Expenditure per Capita (in $)41 362.70 101.90 44.10

Rating (1-5) 5 2 1Wt. 8% 0.4 0.16 0.08

Ease of Doing Business42 10 14 120Rating (1-5) 5 4 1

Wt. 6% 0.3 0.24 0.06Unemployment (in %)43 5.7 5.3 5.7

Rating (1-5) 3 5 3Wt. 3% 0.09 0.15 0.09

Inflation for Consumer Prices (in %)44 2.4 1.6 6.2Rating (1-5) 5 5 1

Wt. 6% 0.3 0.3 0.06Logistics Performance Index (from 1-5)45 3.81 4.12 2.94

Rating (1-5) 4 5 1Wt. 5% 0.2 0.25 0.05

Overall 100% 3.61 3.34 2.5Table 6: Country Side-by-Side Comparison (Top 3)

3.3.3 Evaluation and Country SelectionTable 6 (see above) shows that the top country for Nathan’s Famous to enter next is Australia. This is shown in the last row of the table by the boldfaced text. Australia had the highest overall rating of 3.61, which slightly defeated Germany’s 3.34. Australians are transitioning toward more fast food options in their daily lives due to greater convenience and cheaper prices, so it makes sense for Nathan’s to pursue this growing market. Australians spend a greater amount on 38 http://data.worldbank.org/indicator/SP.POP.TOTL?order=wbapi_data_value_2013+wbapi_data_value+wbapi_data_value-last&sort=desc39 http://chartsbin.com/view/1273040 http://data.worldbank.org/indicator/NY.GDP.PCAP.CD?order=wbapi_data_value_2013+wbapi_data_value+wbapi_data_value-last&sort=desc41 http://www.portal.euromonitor.com.ezproxy.rollins.edu:2048/portal/analysis/tab42 http://data.worldbank.org/indicator/IC.BUS.EASE.XQ43 https://www.cia.gov/library/publications/the-world-factbook44 https://www.cia.gov/library/publications/the-world-factbook45 http://data.worldbank.org/indicator/LP.LPI.OVRL.XQ

14

fast food than the other two countries combined, so it illustrates that there is certainly demand for these types of products.

3.4 Conclusions and RecommendationAfter a detailed analysis, it has been determined that Australia is the next market that Nathan’s will enter. Now that a country has been selected for entry, we must determine the mode by which we will enter as well as address the marketing mix (4 P’s). Once that is complete, we will follow the Segmenting-Targeting-Positioning (STP) Process in order to attract various groups of consumers. This will help Nathan’s compete with its competitors in the new market.

4 Marketing Plan

4.1 Market Entry ModeGiven that 324 of Nathan’s Famous’ 329 restaurants are franchised, the ideal market entry mode for Australia would be a franchise model. The benefits of franchising include low financial risk, bypass tariffs and regulations, and gain local market knowledge. The risks include less control over revenues and operations, and potential relationship issues. Nathan’s is seeking to expand into more foreign countries, and can offer potential franchisees four major things. First, Nathan’s offers a high quality, global brand with a 100-year heritage. Next, the company offers the best beef hot dogs and crinkle-cut fries. In addition, the company offers a wide array of quality menu items that are unique to the fast food industry. Also, Nathan’s business model is flexible, and can be used in food courts, carts, food trucks, or freestanding buildings.46

4.2 Marketing Mix: Four P’sNathan’s should standardize its placement within the Australian market, so that it is convenient for consumers to be able to access the company’s products. Nathan’s should standardize its major menu items, such as beef hot dogs and crinkle-cut French fries, but it should also adapt to Australian tastes and preferences. The country has started to turn toward healthier options, so Nathan’s should consider adding salads and sandwiches to attract health-conscious customers. Price should be adapted to the new market due to differences in exchange rate and in consumer valuation of each particular product. Nathan’s also should adapt its promotional strategies to effectively reach potential consumers. Although adapting advertisements and other promotions to each market can be costly, it will be beneficial to encourage Australian customers to purchase Nathan’s products in order to boost sales. Figure 10 shows the marketing mix and the extent that each variable should be standardized or adapted to the Australian market.

Standardize Adapt

Product

46 http://franchise.nathansfamous.com/the-nathans-famous-international-opportunity.html

15

Price

Promotion

Placement

Figure 10: Standardization vs. Adaptation

4.2.1 Product/ServiceAustralia’s fast food market has grown rapidly over the last decade, as preferences are shifting toward dining out. Healthy eating has also been on the rise among Australians dining at fast food restaurants. However, about a quarter of fast food expenditures comes from hamburger sales, showing that fattening products are still widely consumed throughout the country.47 Therefore, Nathan’s should standardize its existing products, including beef hot dogs, crinkle-cut fries, hamburgers, chicken sandwiches, etc., in order to capture some share in this competitive market. Nathan’s should also consider adapting to local tastes. For example, incorporating salads, sandwiches, wraps, and rolls could be beneficial to the franchisee because these segments account for 34% of total fast food industry sales. Chain restaurants are also gaining popularity, so it may be beneficial for Nathan’s to consider opening restaurants in major Australian cities, such as Brisbane, Sydney, and Perth. It is important for Nathan’s to understand local consumer preferences and tastes in order to capture significant market share and to gain repeat customers.48

4.2.2 PriceIn Australia, there are almost 25,000 fast food locations that generate $15 billion annually. In order to compete with major competitors, including McDonald’s and Yum! Brands, it is critical to price products that both generate profit and draw millions of consumers. For example, a Big Mac in Australia costs on average $4.32 (or AUD $5.30) as compared to the United States’ $4.79.49 As of 1st January 2015, the exchange rate was AUD $1 equals $0.81786.50 Since Nathan’s operates mostly under a franchise model, individual owners set their own prices. The franchisee in Australia should use a value-based pricing strategy that focuses on customers and competition. This allows Nathan’s to illustrate that it is serving high-quality products with its customers in mind. In addition, the price elasticity of demand tends to be relatively elastic, which means that customers are responsive to price fluctuations. Since pricing will be determined by independent franchisees, it is difficult to provide prices for individual products. However, based on the price of a Coney Island beef hot dog, it would be logical for an Australian franchisee to charge AUD $2.60, which was calculated by using the formula Ee=Eb(1+i1)/(1+i2). In this case, E stands for exchange rate and i stands for inflation. With inflation rates of 2.4% in Australia and 1.5% in the U.S.,51 and an Eb= $0.81786, solving for Ee= $0.82511. Multiplying this exchange rate by the price of a beef hot dog in Coney Island ($3.15) yields AUD $2.60. Using this same

47 http://rapstc.com.au/wp-content/uploads/2011/12/Fast-Food-Environmental-Scan-2014.pdf48 http://rapstc.com.au/wp-content/uploads/2011/12/Fast-Food-Environmental-Scan-2014.pdf49 http://www.economist.com/content/big-mac-index50 http://usd.fx-exchange.com/aud/2015_01_01-exchange-rates-history.html51 https://www.cia.gov/library/publications/the-world-factbook/

16

exchange rate will be useful in calculating the prices of other Nathan’s products to be sold in Australia.

4.2.3 PromotionWhen entering a new market, promoting company products to local customers is crucial to sustaining business. Nathan’s must create some form of promotion that connects local consumers to the brand, while keeping their values in mind. Advertising on billboards in major tourist areas, on television, on radio, on the Internet, and other print media will be important to inform Australians about the brand’s products and values. Regardless of the form used, advertisements should focus on Nathan’s high-quality products, excellent value, and exceptional service. In addition, Nathan’s could offer samples of its branded products to give consumers a taste before deciding to purchase them. Another alternative would be to give coupons to loyal customers who visit a Nathan’s location every week/month to provide incentive for dining out regularly. Promotional activities are important in order to drive customers to the business.Australia is a western country that has some cultural similarities with the United States. The Hofstede framework compares nations based on six dimensions: power distance, individualism, masculinity, uncertainty avoidance, long-term orientation, and indulgence. Figure 11 compares the United States and Australia based on these six characteristics. Both Australia and the United States have low power distances, which means that citizens feel entitled to a certain degree of power. In addition, both nations tend to be very individualistic and masculine-dominant, which means that citizens are driven by competition, achievement, and success. In terms of uncertainty avoidance, the U.S. scores lower than Australia, which means that Americans control future events to a lesser degree than Australians. Both countries have low scores in long-term orientation, which means that businesses focus their efforts on the short-term. Indulgence is important to both cultures, which means that citizens work hard and play hard. In terms of colors, Australians will have similar reactions to the green and yellow in Nathan’s logo: cowardice, energy, fun, good luck, growth, happiness, jealousy, money, nature, peace, and repels evil.52

Power

Distan

ce

Indivi

dualis

m

Masculin

ity

Uncertai

nty Avo

idanc

e

Long-T

erm Orie

ntation

Indulg

ence

40

91

62

46

26

68

36

90

6151

21

71

U.S. Australia

52 http://www.informationisbeautiful.net/visualizations/colours-in-cultures/

17

Figure 11: Hofstede Model of U.S. and Australia53

4.2.4 PlacementIn order to build brand awareness in Australia, Nathan’s Famous could begin by finding franchisees in major cities. Since Nathan’s has an array of business models, franchisees could select the model that fits their willingness to invest. For example, a franchisee in Melbourne may select to operate a small food court in a shopping mall. This allows the franchisee to maximize their potential revenue based on a limited amount of space. However, a second franchisee in Sydney may decide to open a freestanding location because of the traffic generated by tourists. Therefore, Nathan’s provides an array of options for potential franchisees. Once brand awareness is developed, Nathan’s can expand into smaller cities as well as establish more stores in large cities, allowing it to compete with giants such as McDonald’s and Yum! Brands.

4.3 STP Process

4.3.1 SegmentationThe fast food industry attracts people of all ages because of convenience and low cost. In Australia, people aged 45 to 54 years made up the largest market segment (21.2%), followed by the 15 to 24 year old segment (20.2%). The segments with the lowest consumption rates of fast food were aged 55-64 (13.9%) and 65+ years(6.5%), respectively. Therefore, Nathan’s should focus on attracting younger people, ranging from 15-54 years of age because they make up about 80% of the fast food market in Australia. Since hot dogs are low price goods, economic class does not play much of a role. If it did, then the focus would be on lower-income families. It is important that Nathan’s illustrates that it serves high-quality products to people of all ages in order to gain market share.

4.3.2 TargetingTargeting specific customers in the fast food industry can be difficult, so a concentrated approach would not be efficient. However, it is possible to pursue a differentiated approach. For example, Nathan’s could start selling healthier products, such as sandwiches and salads, to the health-conscious segment, while it sells its main products, such as beef hot dogs, hamburgers, and crinkle-cut fries, to a wide range of customers that don’t have time to cook meals. Since Nathan’s specialty is hot dogs, they have to generate awareness that its hot dogs are the best in the world. Once consumers realize this, then Nathan’s will have a customer base in Australia.

4.3.3 PositioningNathan’s should differentiate itself from large competitors, especially McDonald’s, by providing Australians with food products that will bring them back multiple times. It is important to create a strong brand image in order to establish brand loyalty. One possibility is to create some type of rewards program that rewards frequent visitors with discounts or free meals. High-quality products combined with exceptional service will help Nathan’s Famous establish itself in a very competitive Australian fast food market.53 http://geert-hofstede.com/united-states.html

18

4.4 Conclusions and RecommendationAdditional research is required to fully understand customer behavior in Australia. Price ending reactions can be avoided due to the fact that franchisees will be in control of price strategies in their respective restaurants. Nathan’s should follow a product development strategy, as it is introducing a new product, beef hot dogs, into an existing fast food market. It is vital for the company to differentiate itself in order to enter the Australian market successfully. McDonald’s and Yum! Brands are two huge competitors in an already saturated fast food market, but Nathan’s has the potential to gain market share by diversifying its products.

References2015 KOF Index of Globalization. (N.d.). Retrieved March 31, 2015, from

http://globalization.kof.ethz.ch/media/filer_public/2015/03/04/rankings_2015.pdfAustralia. (2014, June 23). Retrieved March 30, 2015, from

https://www.cia.gov/library/publications/the-world-factbook/geos/as.htmlBrazil. (2014, June 23). Retrieved March 30, 2015, from

https://www.cia.gov/library/publications/the-world-factbook/geos/br.htmlCNNMoney. (N.d.). Retrieved March 15, 2015, from http://money.cnn.comColors in Cultures. (N.d.). Retrieved April 17, 2015, from

http://www.informationisbeautiful.net/visualizations/colours-in-cultures/Competitive Landscape. (2014, August 1). Retrieved February 23, 2015, from

http://clients1.ibisworld.com/reports/gl/industry/competitivelandscape.aspx?entid=1480Currency Exchange. (2015, January 1). Retrieved April 17, 2015, from http://usd.fx-

exchange.com/aud/2015_01_01-exchange-rates-history.htmlCurrent Worldwide Annual Meat Consumption per capita. (2013, January 1). Retrieved March

19, 2015, from http://chartsbin.com/view/12730Ease of Doing Business Index. (N.d.). Retrieved April 1, 2015, from

http://data.worldbank.org/indicator/IC.BUS.EASE.XQEDGAR Company Filings. (N.d.). Retrieved March 15, 2015, from

http://www.sec.gov/edgar/searchedgar/companysearch.htmlFast Food Environmental Scan 2014. (N.d.). Retrieved April 17, 2015, from

http://rapstc.com.au/wp-content/uploads/2011/12/Fast-Food-Environmental-Scan-2014.pdf

Fast Food Expenditure Per Capita. (2006, August 1). Retrieved March 19, 2015, fromhttp://www.portal.euromonitor.com.ezproxy.rollins.edu:2048/portal/analysis/tab

Fast Food in Australia. (2014, October 1). Retrieved April 1, 2015, from http://www.euromonitor.com/fast-food-in-australia/report

Fast Food in Brazil. (2014, October 1). Retrieved April 1, 2015, from http://www.euromonitor.com/fast-food-in-brazil/report

Fast Food in Germany. (2014, September 1). Retrieved April 1, 2015, from http://www.euromonitor.com/fast-food-in-germany/report

Form 10-K. (2014, June 13). Retrieved February 16, 2015, from http://www.sec.gov/Archives/edgar/data/69733/000143774914011106/nath20140330_10k.htm

GDP per capita (current US$). (N.d.). Retrieved March 19, 2015, from

19

http://data.worldbank.org/indicator/NY.GDP.PCAP.CDGermany. (2014, June 22). Retrieved March 30, 2015, from

https://www.cia.gov/library/publications/the-world-factbook/geos/gm.htmlIndustry Outlook. (2014, August 1). Retrieved February 23, 2015, from

http://clients1.ibisworld.com/reports/gl/industry/industryoutlook.aspx?entid=1480International Opportunity. (N.d.). Retrieved April 16, 2015, from

http://franchise.nathansfamous.com/the-nathans-famous-international-opportunity.htmlLogistics Performance Index. (N.d.). Retrieved April 1, 2015, from

http://data.worldbank.org/indicator/LP.LPI.OVRL.XQMajor Companies. (2014, August 1). Retrieved February 23, 2015, from

http://clients1.ibisworld.com/reports/gl/industry/majorcompanies.aspx?entid=1480Menus. (N.d.). Retrieved March 14, 2015, from

http://www.nathansfamous.com/restaurants/menuNathan's Famous History. (N.d.). Retrieved February 15, 2015, from

http://www.nathansfamous.com/story/extended_historyNathan's Famous, Inc. (2015, February 15). Retrieved February 16, 2015, from

http://search.proquest.com.ezproxy.rollins.edu:2048/hooverscompany/docview/230597563/abstract/B29DDD25A0E34585PQ/1?accountid=13584#

Nathan's Famous, Inc. (2015, February 16). Retrieved February 17, 2015, from http://www.lexisnexis.com.ezproxy.rollins.edu:2048/hottopics/lnacademic/

Nathan's Famous, Inc. Compensation Committee Charter. (N.d.). Retrieved February 16, 2015,from http://media.corporate-ir.net/media_files/IROL/11/113414/NATH_Updated_Compensation_Committee_Charter_9.14.pdf

Nathan's Famous, Inc. History. (N.d.). Retrieved February 16, 2015, from http://www.fundinguniverse.com/company-histories/nathan-s-famous-inc-history/

Population, total. (N.d.). Retrieved March 19, 2015, from http://data.worldbank.org/indicator/SP.POP.TOTL

"Ready. Set. PLAY!" (N.d.). Retrieved February 16, 2015, from http://www.nathansfamous.com/kaboom

The Big Mac Index. (2015, January 22). Retrieved April 17, 2015, from http://www.economist.com/content/big-mac-index

The Hofstede Centre. (N.d.). Retrieved April 17, 2015, from http://geert-hofstede.com/united-states.html

Topic: McDonald's. (N.d.). Retrieved March 15, 2015, from http://www.statista.com/topics/1444/mcdonalds/

What about Australia? (N.d.). Retrieved March 30, 2015, from http://geert-hofstede.com/australia.html

Yum! Financial Data. (N.d.). Retrieved March 15, 2015, from http://www.yum.com/investors/restcounts.asp

20

Appendix

Exhibit 1: Likert Scale for Table 4

Factors 1 2 3 4 5

Population (in millions) 23.13-67.45 67.46-111.78 111.79-156.11

156.12-200.44 >200.45

Annual Meat Consumption per Capita (in kg) 45.9-59 59.1-72.2 72.3-85.4 85.5-98.6 >98.7

GDP per Capita(in thousands of $) 1.91-13 13.01-24.1 24.11-35.2 35.21-46.3 >46.31

Fast Food Expenditure per Capita (in $) 4-81.26 81.27-158.53 158.54-235.8 235.81-

313.07 >313.08

Exhibit 2: Equally Weighted Side-by-Side Country Comparison (Top 9)

Factors Wt. Eng. Aus. Jpn. Chn. Ger. Fra. Esp. Ita. Bra.Population(in millions) 64.1 23.13 127.3 1,357 80.62 66.03 46.65 59.83 200.4

Rating (1-5) 1 1 3 5 2 1 1 1 4Wt. 25% 0.25 0.25 0.75 1.25 0.5 0.25 0.25 0.25 1

Annual Meat Consumption per

Capita (in kg)84.2 111.5 45.9 58.2 88.1 86.7 97 90.7 85.3

Rating (1-5) 3 5 1 1 4 4 4 4 3Wt. 25% 0.75 1.25 0.25 0.25 1 1 1 1 0.75

GDP per Capita(in thousands of $) 41.79 67.46 38.63 6.81 46.27 42.5 29.86 35.93 11.21

Rating (1-5) 4 5 4 1 4 4 3 4 1Wt. 25% 1 1.25 1 0.25 1 1 0.75 1 0.25

Fast Food Expenditure per Capita (in $) 390.3 362.7 281.0 10.10 101.9 95.60 82.70 55.40 44.10

Rating (1-5) 5 5 4 1 2 2 2 1 1Wt. 25% 1.25 1.25 1 0.25 0.5 0.5 0.5 0.25 0.25

Overall 100% 3.25 4 3 2 3 2.75 2.5 2.5 2.25

Exhibit 3: Likert Scale for Table 6

Factors 1 2 3 4 5

Population (in millions) 23.13-67.45 67.46-111.78 111.79-156.11

156.12-200.44 >200.45

Annual Meat Consumption per Capita (in kg) 45.9-59 59.1-72.2 72.3-85.4 85.5-98.6 >98.7

GDP per Capita(in thousands of $) 1.91-13 13.01-24.1 24.11-35.2 35.21-46.3 >46.31

Fast Food Expenditure per Capita (in $) 4-81.26 81.27-158.53 158.54-235.8 235.81-

313.07 >313.08

Ease of Doing Business >41 31-40 21-30 11-20 1-10Unemployment (in %) >6.1 5.9-6 5.7-5.8 5.5-5.6 5.3-5.4Inflation for Consumer

Prices (in %) >5.6 4.6-5.5 3.6-4.5 2.6-3.5 1.6-2.5

Logistics Performance 2.94-3.18 3.19-3.43 3.44-3.68 3.69-3.93 >3.94

21

Index (from 1-5)

Exhibit 4: Equally Weighted Side-by-Side Country Comparison (Top 3)

Factors Wt. Aus. Ger. Bra.Population (in millions) 23.13 80.62 200.4

Rating (1-5) 1 2 4Wt. 20% 0.2 0.4 0.8

Annual Meat Consumption per Capita (in kg) 111.5 88.1 85.3Rating (1-5) 5 4 3

Wt. 20% 1 0.8 0.6GDP per Capita (in thousands of $) 67.46 46.27 11.21

Rating (1-5) 5 4 1Wt. 20% 1 0.8 0.2

Fast Food Expenditure per Capita (in $) 362.70 101.90 44.10Rating (1-5) 5 2 1

Wt. 20% 1 0.4 0.2Ease of Doing Business 10 14 120

Rating (1-5) 5 4 1Wt. 5% 0.25 0.2 0.05

Unemployment (in %) 5.7 5.3 5.7Rating (1-5) 3 5 3

Wt. 5% 0.15 0.25 0.15Inflation for Consumer Prices (in %) 2.4 1.6 6.2

Rating (1-5) 5 5 1Wt. 5% 0.25 0.25 0.05

Logistics Performance Index (from 1-5) 3.81 4.12 2.94Rating (1-5) 4 5 1

Wt. 5% 0.2 0.25 0.05Overall 100% 4.05 3.35 2.1

22