Mondelez 2014 Annual Report Download - page 8

Table of Contents
Distribution and Marketing
Across our segments, we generally sell our products to supermarket chains, wholesalers, supercenters, club stores, mass
merchandisers, distributors, convenience stores, gasoline stations, drug stores, value stores and other retail food outlets. We
distribute our products through direct store delivery, company-owned and satellite warehouses, distribution centers and other
facilities. We also use the services of independent sales offices and agents in some of our international locations.
We conduct marketing efforts through three principal sets of activities: (i) consumer marketing and advertising including on-air,
print, outdoor, digital and social media and other product promotions; (ii) consumer sales incentives such as coupons and rebates;
and (iii) trade promotions to support price features, displays and other merchandising of our products by our customers.
Raw Materials and Packaging
We purchase and use large quantities of commodities, including cocoa, coffee, dairy, wheat, corn products, soybean and vegetable
oils, sugar and other sweeteners and nuts. In addition, we purchase and use significant quantities of packaging materials to
package our products and natural gas, fuels and electricity for our factories and warehouses. We regularly monitor worldwide
supply, cost and currency trends related to these commodities so we can cost-
effectively secure ingredients, packaging and energy
sources required for production.
A number of external factors such as weather conditions, commodity market conditions, currency fluctuations and the effects of
governmental agricultural programs affect the cost and availability of raw materials and agricultural materials used in our products.
We use hedging techniques to limit the impact of fluctuations in the cost of our principal raw materials. However, we cannot fully
hedge against changes in commodity costs and our hedging strategies may not protect us from increases in specific raw material
costs.
While the costs of our principal raw materials fluctuate, we believe there will continue to be an adequate supply of the raw materials
we use and that they will generally remain available from numerous sources. For additional information on our commodity costs,
refer to the Commodity Trends section within Management’s Discussion and Analysis of Financial Condition and Results of
Operations .
Intellectual Property
Our intellectual property rights (including trademarks, patents, copyrights, registered designs, proprietary trade secrets, technology
and know-how) are material to our business.
We own numerous trademarks and patents in many countries around the world. Depending on the country, trademarks remain valid
for as long as they are in use or their registration status is maintained. Trademark registrations generally are for renewable, fixed
terms. We also have patents for a number of current and potential products. Our patents cover inventions ranging from basic
packaging techniques to processes relating to specific products and to the products themselves. Our issued patents extend for
varying periods according to the date of patent application filing or grant and the legal term of patents in the various countries
where patent protection is obtained. The actual protection afforded by a patent, which can vary from country to country, depends
upon the type of patent, the scope of its coverage as determined by the patent office or courts in the country, and the availability of
legal remedies in the country. While our patent portfolio is material to our business, the loss of one patent or a group of related
patents would not have a material adverse effect on our business.
From time to time, we grant third parties licenses to use one or more of our trademarks in connection with the manufacture, sale or
distribution of third party products. Similarly, we sell some products under brands we license from third parties. In our agreement
with Kraft Foods Group, Inc., we each granted the other party various licenses to use certain of our and their respective intellectual
property rights in named jurisdictions following the Spin-Off.
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