Transcript Argentina - bYTEBoss

Argentina
Michael Pecora
Louis Le Jeune
John Schneider
Andrew Lorey
Amy Berke
Target Market
The Country and Culture
 Argentine culture
 Fits well into current domestic target market
 Family and religiously oriented
 Women run household
 Child satisfaction important
 Large percentage of population is children
 Many different regional dialects
 Some other languages present throughout country
 Argentine Spanish differs from Mexican and Chilean
Spanish
 Sometimes resulting in unintended and embarrassing
ramifications
Target Market
The Country and Culture
 Attractive because highest per capita GDP and
second highest total GDP in Latin America
 Very European in culture and nature
 Relies heavily MERCOSUR trade agreement
for business
 U.S. is Argentina’s single largest partner for
trade and investment
 While country represents viable market
opportunity, recent international financial
shocks and recessions have led to lower
growth rates
Target Market
The People
 Most people live in urban areas
 Market more open to foreign imports than
ever
 Shopping Habits
 Stores are open consistently
 Supermarkets becoming more prominent in
urban areas
 People also buy in neighborhood shops
Product
Specifications and Regulations
 Food products under control National
Administration of Drugs, Food, and Medical
Technology
 Assessed on a case-by-case basis
 Many regulations for importing from U.S.
 National Food Institute – INAL is main governing
body for importation of processed food products and
specific labeling and packaging laws
 Registration needed for both product and importer
 No official waste/disposal laws or product
recycling regulations that affect imports
Product
Packaging
 Skippy Peanut Butter = Mantequilla de Cacahuete de
Skippy
 Argentine patriotism including flag colors are often
used in packaging of products and fit well with current
Skippy package
 No official requirements or laws - packaging is defined
based on marketing strategy and personal preference
 Various package sizes are seen in spread market
 Both plastic squeezables and clear plastic jars are used
 Quantity and weight are similar to U.S. standards
Product
Labeling

Merchandise Marking Act of 1983 established laws for labeling
 Must include:
 Name (description of product)
 Country of origin
 Quality, purity, blending description
 Net weight
 If made in Argentina must have “Industria Argentina”
 U.S. nutritional label is acceptable but not yet required
 All labeling must use metric system
 All labels should be in Spanish
 Imported products can retain original label in language of country of origin
but must attach label in Spanish in addition
Product
Competition
 Large and differentiated market for spreads
and jams
 Argentineans mainly consume varieties of
spreads during breakfast and snacks
 Consume on both bread and crackers
 Leading spread brands include
 Dulcor, Arcor, Gaucha, Rosamonte
 Sweet potato jam, caramel jam, pumpkin jam, fig
marmalade, apricot marmalade, etc. are popular
 More common and ordinary are also widely distributed by
companies
Product
Ingredients and Consumption
 Current ingredients ok to use in Argentina
 90% select roasted peanuts, small amounts of vegetable oil
stabilizers, sugars, salts
 Argentina is currently the largest producer of peanuts in the world
 Sales of spreads has been steadily declining in past few years
 Sales projected to decline 26.1% from 2002 value to year-end of
2007
 Volume sales of similar jams and other spreads are on a similar
path
 Other sweet spreads currently favorites in market
 European heritage fosters large preference for variety of spreads
especially for breakfasts and snacks
Place
 Peanut growth in Argentina:
 Largest producer of peanuts in the world.
 The country grows 27% of the world’s
peanut production.
 Currently use its peanut product mainly in
the production of peanut oil.
 Plenty of room for diversification of their
peanut resources.
Place
 Retailing environment in Argentina:
 Supermarkets have become the dominate
food retailer.
 In 2001, sales totaled 8.2 billion pesos.
 Supermarkets only sell non-perishable foods.
 Lately great advances have been made in
distribution and logistical systems.
 Most of Argentina’s population is clustered
within large cities.
 Buenos Aires represents roughly 44% of the country’s
Food and Beverage sales.
Place
 Topography of Argentina:
 Very hilly: the country has the lowest valley
and the highest peak in South America.
 Makes automobile transportation dangerous.
 Over 5,000 kilometers of coastline.
 Buenos Aires, which has 44% of the food and
beverage market, is a coastal city.
 Suggests using railroads and ships to
transport the products.
Place
 Taking orders from customers:
 Not through the internet!
 Only 4.1 million internet users in Argentina.
 Two of the ten large supermarket chains take
internet orders.
 In addition, the mail system is not nearly as
efficient as other countries.
Place
 Technology advancement and human
capital improvements are going to help
improve logistics and help extend the
supply chain.
 Business Intelligence Project Sinfonia.
 Data Warehousing.
 Create economies of scale.
 Capitalize on cross-border opportunities.
Place
 Ten Unilever manufacturing plants
located throughout Argentina.
 All are located in major cities.
 Two Unilever distribution centers located
in Argentina.
 Top companies that sell food products:
Carrefour, Disco, Coto, Lo Anonima,
Jumbo, Wal-Mart, Auchan, Toledo
Price
 A new product, such as
Skippy peanut butter,
would need to enter the
market at an affordable
price.
 Economy is struggling,
consumers may not want
to risk spending their
income on new product.
Promotion
 Cents-off promotional coupon would help increase sales
 Humorous commercials based on mainstays of Argentine culture
 Housewives habitually watch product-based game shows and
soap operas during the day and evening
 Advertising material is subject to customs duties when imported
 Catalogs, printed brochures, and other types usually exempt of import
duties and taxes when used at local trade fairs
 Bulk packages of printed material denied entry
 Samples are free of duties and taxes when valued at less than
$100 and indicated as “no commercial value”
Promotion
Advertising
- Advertising expenditures are on the rise – companies
are spending more on advertising
 Highest advertising expenditures come from National
newspapers
 Food products not often advertised in press but in top
ten magazine advertisements
- Television
- Penetration is excellent
- Easiest and most cost effective
- Food in top ten product category on TV
- Unilever well-known advertiser
Promotion
Advertising
 Newspaper
 Circulation wide over variety of national and regional
papers
 Adult readership high in national papers – Clarin
 Variety of prices for ads
 Magazines
 Adult readership high in general interest category
 Multiple women’s magazines with average
circulation
 Outdoor
 Multiple varieties of outdoor advertising available
 Unilever most prevalent advertiser
 Food used often in outdoor ads
Promotion
Advertising
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Radio
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Internet
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Radio penetration excellent
Adult listening minutes higher than TV
viewing minutes
Peak times differ from TV peak times
Food products often advertised on
radio
Does not reach many homes
People spend very little time online
Cinema
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Small number of cinema screens
Admissions to movies very small and
declining since 1996
Majority of audience not in target
market
SWOT
 Strengths
 Efficient natural resources for producing peanut
butter within Argentina’s borders.
 Multiple manufacturing facilities owned by Skippy’s
parent company, Unilever, located throughout
country.
 Many ocean ports used for distribution purposes
 Supermarkets becoming more prominent
 Argentine flag colors are similar to Skippy’s current
packaging.
 Logistics are improving in Argentina, helps with the
distribution process.
SWOT
 Weaknesses
 Weakening of nation’s currency and economy
 Peanuts are rarely consumed in Argentina, country
primarily exports its large supply in the form of
peanut oil.
 Relevance of peanuts in Argentina is very low.
 Not a common snack in Argentina.
 Already a large and differentiated market of spreads
SWOT
 Opportunities
 Can produce peanut butter in Argentina and ship it to
surrounding countries where demand may be higher
 Perform market research to see if demand for peanut butter is
prevalent in Argentina.
 Introduce one of Skippy’s product lines first, to see how the
market responds to it.
 Televisions, reach 97% of Argentina’s population, television
advertising may be the best way to reach the masses.
 Unilever is the most prevalent advertiser on outdoor billboards.
SWOT
 Threats
 Already many competitors in the Argentina
food spread market.
 Consumers have to feel the urge to try Skippy
and leave their old spreads behind.
 Sales of spreads are declining in Argentina.