country market analysis
DESCRIPTION
Country Market Analysis. MEXICO Lipton Iced Tea. LIPTON ICED TEA IN U.S. Positioning: Healthy alternative On-the-go refreshment Variety of flavors sweet, un-sweet, lemon, raspberry, peach, green tea Target Market: Adults who seek a healthy lifestyle Distribution: - PowerPoint PPT PresentationTRANSCRIPT
Country Market Analysis
MEXICO Lipton Iced Tea
LIPTON ICED TEA IN U.S. Positioning:
Healthy alternative On-the-go refreshment Variety of flavors
sweet, un-sweet, lemon, raspberry, peach, green tea
Target Market: Adults who seek a healthy lifestyle
Distribution: Pepsi-Lipton tea partnership is the leading ready-to-drink
tea producer in U.S. & Canada
TRANSITIONING INTO MEXICO
Issues to Consider: How much will consumers be willing to pay in Mexico? Will the current product line in the U.S work in Mexico? Where do consumers in Mexico purchase iced tea, and
how do we make it available to them? Is the consumer base large enough for Lipton Iced Tea to
enter the Mexican market? How will the population become aware of our product?
AGENDA Price:
Factors that affect price Product:
Cultural differences and how competition influences product decisions
Place: Distribution options and advantages
Promotion: Ways to reach consumers
PRICE
Considerations for a pricing strategy: Disposable Income:
Mexico is a relatively poor country Per capita: $9,000*
*This is about ¼ of the U.S. average 40% live below poverty line
Competitive Pricing: McKormick, Nestea, and domestic brands
Consumers in Mexico are willing to pay a lower price for domestic brands
PRICE
Distribution Costs’ Effects on Pricing: Partnership with Pepsi – reduces distribution and
production costs Economies of scale
Advertising Effects on Pricing: TV and radio are the most effective forms of media,
but are most expensive Increased advertising may fluctuate prices
PRODUCT
Languages and Dialects: 95% of people speak Spanish
Different interpretation for marketing strategies with the different dialects in the Mexican culture
According to Mexican laws, you must translate your marketing literature, product manuals, labels, and warranties into Spanish
High literacy rate of 92% Consumers will be better educated about product Less likely to misinterpret labeling or packaging
PRODUCT
Religion: Catholicism plays a major role in society and
Government Mexicans value the meanings of symbols in a religious
sense Research logos to be used by Lipton for product
PRODUCT
Mexico’s unsafe drinking water Water source? Purified?
Competition – other successful iced tea brands Closely observe their strengths and weaknesses
Flavors Colors Ingredients
Obtain consumer feedback on already established brands of iced tea
PLACE Free market economy, very
similar to U.S. Retail outlets in Mexico for new
age beverages: Standard Grocers - 51.6% (of the
market’s value) Traditional grocers - 32.2% Convenience stores - 5.2% Kiosks - 3.7% Discount grocers - 3.4% Petrol Station stores - .5% Vending - .2%
PLACE Additional Availability:
Movie Theaters Cinemex - Mexico’s largest cinema chain
Pepsi is the supplier of cinemex’s drinks Street Vending
Distribution Options: Unilever Plant
Currently present in Mexico Needs to be adapted to produce tea
Local Mexican Distributor Finding well respected Mexican distributors is difficult
50-50 joint-venture with Pepsico
PLACE
Existing Presence in Mexico: Unilever
Several successful brands and production plants within Mexico
Pepsi The Pepsi Bottling Group Mexico reaches 65% of the Mexican
market place A well established, strong brand in the Mexican market Existing business relationships Strong brand loyalty
PLACE
Pepsi-Lipton International: A 50-50 joint venture between Pepsi and Unilever Uses Pepsico’s extensive bottling and distribution
network Pepsi-Lipton International joint venture has proven to
be extremely successful among other international markets
PLACE Pepsi Bottling Group Mexico
5 different territories 22 production facilities with water
purification 180 distribution centers 5,200 trucks on the road making
deliveries each day 26,000 employees 4 other Pepsi franchise bottlers
serve the remaining regions
PLACE
Surface Transportation Railways: 12,120 miles Highways: Total: 204,800 miles
137,600 miles unpaved
Problems: Getting product to retail outlets Consumers getting to retail outlets and getting product home
PROMOTION
Population - 104,959,594 Growing 3 times as fast as U.S. Ever-expanding group of potential customers
Segmented market due to social classes Mexicans are very status conscious To be considered when positioning product
Television Reaches 19,284,881 of 22,268,916 households in Mexico,
or 84% of households have television
PROMOTION
Channel Technical Penetration (%)
Cost of 30 Second Spot on Network
(in U.S. Dollars)
2 99% $22,314
4 33% $2,168
5 90% $11,232
7 94% $8,272
9 73% $2,886
13 97% $10,013
Commercial Television
Basic channels reach large number of peopleStrong opportunity to market to the massesPeak times are between 7pm-midnight
PROMOTION
TV
Advertiser
TV Expenditure
(in U.S. Dollar)
Televisa $781,000
TV Azteca $285,400
Procter & Gamble $109,012
Bimbo $105,529
Coca~Cola $103,178
Colgate $67,044
Pepsi Cola $56,508
Unilever $54,680
Unilever – 8th highest spending on Mexican TV advertising
Established presence and relationships with advertisers and TV companies
Know how to reach customers
Sensitive and aware of Mexican customs Business and personal
PROMOTION
Other Media Outlets: Radio Newspapers Magazines Cinema Internet
Radio is 2nd strongest, while internet is only able to reach a small fraction of consumers
PROMOTION
Competition “New Age Beverages”
iced teas, sports drinks and bottled waters Iced Tea Products
Particularly are popular in Northern Mexico Consumers are more influenced by consumption trends of the
United States
McKormick – leading brand of iced tea Coca-Cola – Nestea brand of iced tea
PROMOTION
Iced Tea Targets: Towards 25-40 year old age group Those concerned with living a healthy lifestyle
Nestea’s motto: “Cuando te sientes bien, se nota” (one can tell when you’re feeling good)
Other Competition: Gatorade
Dominant force in sports drinks market. Powdered drinks
Low price creates high demand Liquid concentrates
Ease of handling and generally lower prices. Carbonated beverages
PROMOTION
Lipton must decide how to position itself in the existing market Similarities with competition Differences between competition
Coupons, Sales Promotions, Sampling Standard groceries enable us to consider these types
of promotion as an option
KEY CONSIDERATIONS
Pepsi-Lipton Joint Venture Production Distribution
Unilever’s Existing Presence in Mexico Mexico = Free Market Economy High Television Penetration Existing Iced Tea Brands 40% of People Live Below Poverty Line
GRACIAS!
ANY QUESTIONS?