ArgentinaArgentina

Michael PecoraMichael PecoraLouis Le JeuneLouis Le JeuneJohn SchneiderJohn SchneiderAndrew LoreyAndrew Lorey

Amy BerkeAmy Berke

Target MarketTarget MarketThe Country and CultureThe Country and Culture

Argentine cultureArgentine culture Fits well into current domestic target marketFits well into current domestic target market

Family and religiously orientedFamily and religiously oriented Women run householdWomen run household Child satisfaction importantChild satisfaction important

Large percentage of population is childrenLarge percentage of population is children Many different regional dialectsMany different regional dialects Some other languages present throughout countrySome other languages present throughout country Argentine Spanish differs from Mexican and Chilean Argentine Spanish differs from Mexican and Chilean

Spanish Spanish Sometimes resulting in unintended and embarrassing Sometimes resulting in unintended and embarrassing

ramificationsramifications

Target MarketTarget MarketThe Country and CultureThe Country and Culture

Attractive because highest per capita GDP and Attractive because highest per capita GDP and second highest total GDP in Latin Americasecond highest total GDP in Latin America

Very European in culture and natureVery European in culture and nature Relies heavily MERCOSUR trade agreement Relies heavily MERCOSUR trade agreement

for businessfor business U.S. is Argentina’s single largest partner for U.S. is Argentina’s single largest partner for

trade and investmenttrade and investment While country represents viable market While country represents viable market

opportunity, recent international financial opportunity, recent international financial shocks and recessions have led to lower shocks and recessions have led to lower growth ratesgrowth rates

Target MarketTarget MarketThe PeopleThe People

Most people live in urban areasMost people live in urban areas Market more open to foreign imports than Market more open to foreign imports than

everever Shopping HabitsShopping Habits

Stores are open consistentlyStores are open consistently Supermarkets becoming more prominent in Supermarkets becoming more prominent in

urban areasurban areas People also buy in neighborhood shopsPeople also buy in neighborhood shops

ProductProductSpecifications and RegulationsSpecifications and Regulations

Food products under control National Food products under control National Administration of Drugs, Food, and Medical Administration of Drugs, Food, and Medical Technology Technology Assessed on a case-by-case basisAssessed on a case-by-case basis

Many regulations for importing from U.S.Many regulations for importing from U.S. National Food Institute – INAL is main governing National Food Institute – INAL is main governing

body for importation of processed food products and body for importation of processed food products and specific labeling and packaging lawsspecific labeling and packaging laws

Registration needed for both product and importerRegistration needed for both product and importer No official waste/disposal laws or product No official waste/disposal laws or product

recycling regulations that affect importsrecycling regulations that affect imports

ProductProductPackagingPackaging

Skippy Peanut Butter = Mantequilla de Cacahuete de Skippy Peanut Butter = Mantequilla de Cacahuete de SkippySkippy

Argentine patriotism including flag colors are often Argentine patriotism including flag colors are often used in packaging of products and fit well with current used in packaging of products and fit well with current Skippy packageSkippy package

No official requirements or laws - packaging is defined No official requirements or laws - packaging is defined based on marketing strategy and personal preferencebased on marketing strategy and personal preference

Various package sizes are seen in spread marketVarious package sizes are seen in spread market Both plastic squeezables and clear plastic jars are usedBoth plastic squeezables and clear plastic jars are used Quantity and weight are similar to U.S. standardsQuantity and weight are similar to U.S. standards

ProductProductLabelingLabeling

Merchandise Marking Act of 1983 established laws for labelingMerchandise Marking Act of 1983 established laws for labeling Must include:Must include:

Name (description of product)Name (description of product) Country of originCountry of origin Quality, purity, blending descriptionQuality, purity, blending description Net weightNet weight

If made in Argentina must have “Industria Argentina”If made in Argentina must have “Industria Argentina” U.S. nutritional label is acceptable but not yet requiredU.S. nutritional label is acceptable but not yet required All labeling must use metric system All labeling must use metric system All labels should be in SpanishAll labels should be in Spanish

Imported products can retain original label in language of country of origin Imported products can retain original label in language of country of origin but must attach label in Spanish in addition but must attach label in Spanish in addition

ProductProductCompetitionCompetition

Large and differentiated market for spreads Large and differentiated market for spreads and jamsand jams

Argentineans mainly consume varieties of Argentineans mainly consume varieties of spreads during breakfast and snacks spreads during breakfast and snacks

Consume on both bread and crackersConsume on both bread and crackers Leading spread brands includeLeading spread brands include

Dulcor, Arcor, Gaucha, RosamonteDulcor, Arcor, Gaucha, Rosamonte Sweet potato jam, caramel jam, pumpkin jam, fig Sweet potato jam, caramel jam, pumpkin jam, fig

marmalade, apricot marmalade, etc. are popularmarmalade, apricot marmalade, etc. are popular More common and ordinary are also widely distributed by More common and ordinary are also widely distributed by

companiescompanies

ProductProductIngredients and ConsumptionIngredients and Consumption

Current ingredients ok to use in ArgentinaCurrent ingredients ok to use in Argentina 90% select roasted peanuts, small amounts of vegetable oil 90% select roasted peanuts, small amounts of vegetable oil

stabilizers, sugars, saltsstabilizers, sugars, salts Argentina is currently the largest producer of peanuts in the worldArgentina is currently the largest producer of peanuts in the world

Sales of spreads has been steadily declining in past few yearsSales of spreads has been steadily declining in past few years Sales projected to decline 26.1% from 2002 value to year-end of Sales projected to decline 26.1% from 2002 value to year-end of

20072007 Volume sales of similar jams and other spreads are on a similar Volume sales of similar jams and other spreads are on a similar

pathpath Other sweet spreads currently favorites in marketOther sweet spreads currently favorites in market European heritage fosters large preference for variety of spreads European heritage fosters large preference for variety of spreads

especially for breakfasts and snacksespecially for breakfasts and snacks

PlacePlace

Peanut growth in Argentina:Peanut growth in Argentina: Largest producer of peanuts in the world.Largest producer of peanuts in the world. The country grows 27% of the world’s The country grows 27% of the world’s

peanut production.peanut production. Currently use its peanut product mainly in Currently use its peanut product mainly in

the production of peanut oil.the production of peanut oil. Plenty of room for diversification of their Plenty of room for diversification of their

peanut resources.peanut resources.

PlacePlace

Retailing environment in Argentina:Retailing environment in Argentina: Supermarkets have become the dominate food Supermarkets have become the dominate food

retailer.retailer. In 2001, sales totaled 8.2 billion pesos. In 2001, sales totaled 8.2 billion pesos. Supermarkets only sell non-perishable foods.Supermarkets only sell non-perishable foods.

Lately great advances have been made in Lately great advances have been made in distribution and logistical systems.distribution and logistical systems.

Most of Argentina’s population is clustered Most of Argentina’s population is clustered within large cities.within large cities.

Buenos Aires represents roughly 44% of the country’s Buenos Aires represents roughly 44% of the country’s Food and Beverage sales.Food and Beverage sales.

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Topography of Argentina:Topography of Argentina: Very hilly: the country has the lowest valley Very hilly: the country has the lowest valley

and the highest peak in South America.and the highest peak in South America. Makes automobile transportation dangerous.Makes automobile transportation dangerous.

Over 5,000 kilometers of coastline.Over 5,000 kilometers of coastline. Buenos Aires, which has 44% of the food and Buenos Aires, which has 44% of the food and

beverage market, is a coastal city.beverage market, is a coastal city.

Suggests using railroads and ships to Suggests using railroads and ships to transport the products.transport the products.

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Taking orders from customers:Taking orders from customers: Not through the internet!Not through the internet!

Only 4.1 million internet users in Argentina.Only 4.1 million internet users in Argentina. Two of the ten large supermarket chains take Two of the ten large supermarket chains take

internet orders.internet orders. In addition, the mail system is not nearly as In addition, the mail system is not nearly as

efficient as other countries.efficient as other countries.

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Technology advancement and human Technology advancement and human capital improvements are going to help capital improvements are going to help improve logistics and help extend the improve logistics and help extend the supply chain.supply chain.

Business Intelligence Project Sinfonia.Business Intelligence Project Sinfonia. Data Warehousing.Data Warehousing. Create economies of scale.Create economies of scale. Capitalize on cross-border opportunities.Capitalize on cross-border opportunities.

PlacePlace

Ten Unilever manufacturing plants Ten Unilever manufacturing plants located throughout Argentina. located throughout Argentina. All are located in major cities.All are located in major cities.

Two Unilever distribution centers located Two Unilever distribution centers located in Argentina.in Argentina.

Top companies that sell food products: Top companies that sell food products: Carrefour, Disco, Coto, Lo Anonima, Carrefour, Disco, Coto, Lo Anonima, Jumbo, Wal-Mart, Auchan, Toledo Jumbo, Wal-Mart, Auchan, Toledo

PricePrice

A new product, such as A new product, such as Skippy peanut butter, Skippy peanut butter, would need to enter the would need to enter the market at an affordable market at an affordable price.price.

Economy is struggling, Economy is struggling, consumers may not want consumers may not want to risk spending their to risk spending their income on new product.income on new product.

PromotionPromotion

Cents-off promotional coupon would help increase salesCents-off promotional coupon would help increase sales Humorous commercials based on mainstays of Argentine cultureHumorous commercials based on mainstays of Argentine culture Housewives habitually watch product-based game shows and Housewives habitually watch product-based game shows and

soap operas during the day and eveningsoap operas during the day and evening Advertising material is subject to customs duties when importedAdvertising material is subject to customs duties when imported

Catalogs, printed brochures, and other types usually exempt of import Catalogs, printed brochures, and other types usually exempt of import duties and taxes when used at local trade fairsduties and taxes when used at local trade fairs

Bulk packages of printed material denied entryBulk packages of printed material denied entry Samples are free of duties and taxes when valued at less than Samples are free of duties and taxes when valued at less than

$100 and indicated as “no commercial value”$100 and indicated as “no commercial value”

PromotionPromotionAdvertisingAdvertising

- Advertising expenditures are on the rise – companies Advertising expenditures are on the rise – companies are spending more on advertisingare spending more on advertising

Highest advertising expenditures come from National Highest advertising expenditures come from National newspapersnewspapers

Food products not often advertised in press but in top Food products not often advertised in press but in top ten magazine advertisementsten magazine advertisements

- TelevisionTelevision- Penetration is excellentPenetration is excellent- Easiest and most cost effectiveEasiest and most cost effective- Food in top ten product category on TVFood in top ten product category on TV- Unilever well-known advertiserUnilever well-known advertiser

PromotionPromotionAdvertisingAdvertising

NewspaperNewspaper Circulation wide over variety of national and regional Circulation wide over variety of national and regional

paperspapers Adult readership high in national papers – ClarinAdult readership high in national papers – Clarin Variety of prices for adsVariety of prices for ads

MagazinesMagazines Adult readership high in general interest categoryAdult readership high in general interest category Multiple women’s magazines with average circulationMultiple women’s magazines with average circulation

OutdoorOutdoor Multiple varieties of outdoor advertising availableMultiple varieties of outdoor advertising available Unilever most prevalent advertiserUnilever most prevalent advertiser Food used often in outdoor adsFood used often in outdoor ads

PromotionPromotionAdvertisingAdvertising

RadioRadio Radio penetration excellent Radio penetration excellent Adult listening minutes higher than Adult listening minutes higher than

TV viewing minutesTV viewing minutes Peak times differ from TV peak timesPeak times differ from TV peak times Food products often advertised on Food products often advertised on

radioradio InternetInternet

Does not reach many homesDoes not reach many homes People spend very little time onlinePeople spend very little time online

CinemaCinema Small number of cinema screensSmall number of cinema screens Admissions to movies very small and Admissions to movies very small and

declining since 1996declining since 1996 Majority of audience not in target Majority of audience not in target

marketmarket

SWOTSWOT

StrengthsStrengths Efficient natural resources for producing peanut Efficient natural resources for producing peanut

butter within Argentina’s borders.butter within Argentina’s borders. Multiple manufacturing facilities owned by Skippy’s Multiple manufacturing facilities owned by Skippy’s

parent company, Unilever, located throughout parent company, Unilever, located throughout country.country.

Many ocean ports used for distribution purposesMany ocean ports used for distribution purposes Supermarkets becoming more prominentSupermarkets becoming more prominent Argentine flag colors are similar to Skippy’s current Argentine flag colors are similar to Skippy’s current

packaging.packaging. Logistics are improving in Argentina, helps with the Logistics are improving in Argentina, helps with the

distribution process.distribution process.

SWOTSWOT

WeaknessesWeaknesses Weakening of nation’s currency and economyWeakening of nation’s currency and economy Peanuts are rarely consumed in Argentina, country Peanuts are rarely consumed in Argentina, country

primarily exports its large supply in the form of primarily exports its large supply in the form of peanut oil.peanut oil.

Relevance of peanuts in Argentina is very low.Relevance of peanuts in Argentina is very low. Not a common snack in Argentina.Not a common snack in Argentina.

Already a large and differentiated market of spreadsAlready a large and differentiated market of spreads

SWOTSWOT

OpportunitiesOpportunities Can produce peanut butter in Argentina and ship it to Can produce peanut butter in Argentina and ship it to

surrounding countries where demand may be highersurrounding countries where demand may be higher Perform market research to see if demand for peanut butter is Perform market research to see if demand for peanut butter is

prevalent in Argentina.prevalent in Argentina. Introduce one of Skippy’s product lines first, to see how the Introduce one of Skippy’s product lines first, to see how the

market responds to it.market responds to it. Televisions, reach 97% of Argentina’s population, television Televisions, reach 97% of Argentina’s population, television

advertising may be the best way to reach the masses.advertising may be the best way to reach the masses. Unilever is the most prevalent advertiser on outdoor billboards.Unilever is the most prevalent advertiser on outdoor billboards.

SWOTSWOT

ThreatsThreats Already many competitors in the Argentina Already many competitors in the Argentina

food spread market.food spread market. Consumers have to feel the urge to try Skippy Consumers have to feel the urge to try Skippy

and leave their old spreads behind.and leave their old spreads behind.

Sales of spreads are declining in Argentina.Sales of spreads are declining in Argentina.