Argentina

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

 Radio penetration excellent

 Adult listening minutes higher than TV

viewing minutes

 Peak times differ from TV peak times

 Food products often advertised on

radio

 Internet

 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.