Argentina Michael Pecora Louis Le Jeune John Schneider

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 § Radio § § § Internet § § § 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 § § § 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.