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Neilson International in Mexico (A)*
In January, 1993, Howard Bateman, Vice President University of Western Ontario, London, Canada N6A 3K7.
of International Operations for Neilson Reprinted with permission, Western Business School.
International, a division of William Neilson
Limited, was assessing a recent proposal from
Sabritas, a division of Pepsico Foods in Mexico, to
launch Neilson's brands in the Mexican market.
Neilson, a leading producer of high quality
confectionery products, had grown to achieve a
leadership position in the Canadian market and
was currently producing Canada's top selling
chocolate bar, "Crispy Crunch". In the world
chocolate bar market, however, Neilson was
dwarfed by major players such as M&M/Mars,
Hershey/Lowney and Nestlé/Rowntree.
Recognizing their position as a smaller player with
fewer resources, in a stagnant domestic market,
Neilson in 1990 formed its International Division
to develop competitive strategies for their
exporting efforts.
Recent attempts to expand into several foreign
markets, including the United States, had taught
them some valuable lessons. Although it was now
evident that they had world class products to offer
to global markets, their competitive performance
was being constrained by limited resources.
Pepsico's joint branding proposal would allow
greater market penetration than Neilson could
afford. But, at what cost?
Given the decision to pursue international
opportunities more aggressively, Bateman's biggest
challenge was to determine the distributor
relationships Neilson should pursue in order to
become a global competitor.
* This case was prepared by Gayle Duncan and Shari Ann
Wortel under the supervision of Professors P.W. Beamish and
C.B. Johnston of the Western Business School. Copyright
1995, The University of western Ontario. This material is not
covered under authorization from CanCopy or any
reproduction rights organization. Any form of reproduction,
storage or transmittal of this material is prohibited without
written permission from Western Business School, The
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THE CHOCOLATE CONFECTIONERY
INDUSTRY1
The "confectionery" industry consisted of the
"sugar" segment, including all types of sugar
confectionery, chewing gum, and the "chocolate"
segment which included chocolates and other
cocoa based products. Most large chocolate
operations were dedicated to two major products;
boxed chocolates and bar chocolates which
represented nearly 50% of the confectionery
industry by volume.
Competition from imports was significant with the
majority of products coming from the United
States (39%). European countries such as
Switzerland, Germany, the United Kingdom and
Belgium were also major sources of confectionery,
especially for premium products such as boxed
chocolates. (See Exhibit I for a profile of chocolate
exporting countries). In order to maintain
production volumes and to relieve the burden of
fixed costs on operations, Canadian manufactures
used excess capacity to produce goods for
exporting. Although nearly all of these products
were traditionally exported to the United States, in
the early nineties, the world market had become
increasingly more attractive.
Firms in the confectionery industry competed on
the basis of brand name products, product quality
and cost of production. Although Canadian
producers had the advantage of being able to
purchase sugar at the usually lower world price,
savings were offset by the higher prices for dairy
ingredients used in products manufactured for
domestic consumption. Other commodity
ingredients, often experiencing widely fluctuating
prices, caused significant variations in
manufacturing costs. Producers were reluctant to
raise their prices due to the highly elastic demand
for chocolate. Consequently, they sometimes
reformatted or reformulated their products through
size or ingredient changes to sustain margins.
1 Some information in this section was derived from:
James C. Ellert, J. Peter Killing and Dana G. Hyde,
"Nestlé-Rowntree (A)", in Business Policy, A
Canadian Casebook, Joseph N. Fry et al. eds.
Prentice-Hall Canada Inc., 1992, pp. 655-667.
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Three major product types were manufactured for In value terms, more chocolate was consumed than
domestic and export sales: any other manufactured food product in the world.
Blocks In the late eighties, the world's eight major markets
These products are molded blocks of chocolate that (representing over 60% of the total world
are sold by weight and manufactured in a variety chocolate market) consumed nearly three million
of flavours, with or without additional ingredients tons with a retail value close to $20 billion. During
such as fruit or nuts. Block chocolate was sold the 1980's countline was the fastest growing
primarily in grocery outlets or directly to segment with close to 50% of the world chocolate
confectionery manufacturers. (Examples: baking market by volume and an average annual rate of
chocolate, Hershey's Chocolate Bar, Suchard's growth of 7%. An increasing trend towards
Toblerone). indulgence in snack and '"comfort" foods strongly
suggested that future growth would remain strong.
BOXED CHOCOLATES
These products included a variety of bite-sized
sweets and were generally regarded as "gift" or COMPETITIVE ENVIRONMENT
"occasion" purchases. Sales in grocery outlets
tended to be more seasonal than for other chocolate In 1993, chocolate producers in the world
products, with 80% sold at Christmas and Easter. included: M&M/Mars, Hershey Foods, Cadbury-
Sales in other outlets remained steady year round. Schweppes, Jacob Suchard, Nestlé/Rowntree,
(Examples: Cadbury's Milk Tray, Rowntree's United Biscuits, Ferrero, Nabisco and George
Black Magic and After Eights). Weston Ltd. (Neilson). Chocolate represented
varying proportions of these manufacturers' total
Countlines sales.
These were chocolate covered products sold by For the most part, it was difficult to sustain
count rather than by weight, and were generally competitive advantages in manufacturing or
referred to by consumers as "chocolate bars". The product features due to a lack of proprietary
products varied widely in size, shape, weight and technology. There was also limited potential for
composition, and had a wider distribution than the new product development since the basic
other two product types. Most countlines were sold ingredients in countline product manufacturing
through non-grocery outlets such as convenience could only be blended in a limited variety of
and drug stores. (Examples: Neilson's Crispy combinations. This forced an emphasis on
Crunch, Nestlé/Rowntree's Coffee Crisp, M&M competition through distribution and advertising.
Mars' Snickers, and Hershey/ Lowney's Oh Product promotion played a critical role in
Henry!) establishing brand name recognition. Demand was
Sweet chocolate was the basic semi-finished typified by high-impulse and discretionary
product used in the manufacture of block, purchasing behaviour. Since consumers, generally,
countline, and boxed chocolate products. Average had a selection of at least three or four favourite
costs of sweet chocolate for a representative brands from which to choose, the biggest challenge
portfolio of all three product types could be broken facing producers was to create the brand awareness
down as follows: necessary to break into these menus. In recognition
of the wide selection of competing brands and the
Raw Material of
broad range35%snack food substitutes available,
Packaging for media and trade promotions were
expenditures10,00
Production considerable. For example, Canadian chocolate bar
20,00
Distribution makers spent more than $30 million for advertising
5,00
Marketing/Sales in Canada, in 1992, mostly on television. This was
20,00
Trading profit often a barrier to entry for smaller producers.
10,00
Total 100%
(of manufacturer's selling price)
MAJOR COMPETITORS
For countline products raw material costs were
proportionately lower because a smaller amount of M&M/Mars
cocoa was used. As the world leader in chocolate confectionery
M&M/Mars dominated the countline sector,
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particularly in North America and Europe, with 1SFr = $0.88 CAD = 0.69 U.S.) This is was largely
such famous global brands as Snickers, M&Ms and a result of their move into the countline sector
Milky Way. However, in Canada, in 1992, through the acquisition in 1988 of Rowntree PLC,
M&M/Mars held fourth place with an 18.7% a leading British manufacturer with strong global
market share of single bars. (Exhibits 2 and 3 brands such as Kit Kat, After Eights and Smarties.
compare Canadian market positions for major In 1990, they also added Baby Ruth and
competitors). Butterfinger to their portfolio, both "Top 20"
M&M/Mars' strategy was produce high quality brands in the U.S. Considering these recent heavy
products which were simple to manufacture and investments to acquire global brands and expertise,
which allowed for high volume, and automated it was clear that Nestlé-Rowntree intended to
production processes. They supported their remain a significant player in growing global
products with heavy advertising and aggressive markets.
sales, focusing marketing efforts on strengthening
their global brands.
NEILSON
Hershey/Lowney Company History
Hershey's strength in North America was in the William Neilson Ltd. was founded in 1893, when
block chocolate category in which it held the the Neilson family began selling milk and home
leading market position. Hershey also supplied made ice cream to the Toronto market. By 1905
export markets in Asia, Australia, Sweden, and they had erected a house and factory at 277
Mexico from their chocolate production facilities Gladstone Ave., from which they shipped ice
in Pennsylvania. In Canada, in 1992, Hershey held cream as far west as Winnipeg and as far east as
third place in the countline segment with a 21.6% Quebec City. Chocolate bar production was
share of the market. initiated to offset the decreased demand for ice
Hershey's strategy, was to reduce exposure to cream during the colder winter months and as a
volatile cocoa prices by diversifying within the way of retaining the skilled labour pool. By 1914,
confectionery and snack businesses. By 1987, only the company was producing one million pounds of
45% of Hershey's sales came from products with ice cream and 500,000 pounds of chocolate per
70% or more chocolate content. This was down year.
from 80% in 1963. William Neilson died in 1915, and the business
was handed down to his son Morden, who had
Cadbury Schweppes been involved since its inception. Between 1924
Cadbury was a major world name in chocolate, and 1934, the "Jersey milk", "Crispy Crunch" and
with a portfolio of brands such as Dairy Milk, "Malted Milk" bars were introduced. Upon the
Creme Eggs and Crunchie. Although its main death of Morden Neilson in 1947, the company
business was in the United Kingdom, it was also a was sold to George Weston Foods for $4.5 million.
strong competitor in major markets such as By 1974, "Crispy Crunch" was the number one
Australia and South Africa. selling bar in Canada. In 1977, "Mr. Big" was
Cadbury Schweppes diversified its product line introduced and became the number one teen bar by
and expanded into new geographic markets 1986. By 1991, the Neilson dairy operations had
throughout the 1980s. In 1987, Cadbury been moved to a separate location and the ice
International sold the Canadian distribution rights cream division had been sold to Ault Foods. The
for their chocolate products to William Neilson Gladstone location continued to be used to
Ltd. Only in Canada were the Cadbury products manufacture Neilson chocolate and confectionery.
incorporated into the Neilson confectionery Bateman explained that Neilson's efforts under the
division under the name Neilson/Cadbury. In 1988, direction of the new president, Arthur Soler, had
Cadbury sold its U.S. operations to Hershey. become more competitive in the domestic market
over the past three years, through improved
customer service and retail merchandising.
Nestlé-Rowntree Significant improvements had already been made
In 1991, chocolate and confectionery comprised in Administration and Operations. All of these
16% of Nestlé's SFr 50.5 billion revenue, up initiatives had assisted in reversing decades of
sharply from only 8% in 1987. (In January 1993, consumer share erosion. As a result, Neilson was
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now in a position to defend its share of the countries that were being considered by the
domestic market and to develop and international International Division. (See Exhibit 6 for a profile
business that would enhance shareholder value. of the world's major chocolate importers). The
(Exhibit 4 outlines the Canadian chocolate study was intended to provide a standard means of
confectionery market.) evaluating potential markets. Resources could then
be allocated among those markets that promised
Neilson's Exporting Efforts long term incremental growth and those which
Initial export efforts prior to 1990 were contracted were strictly opportunistic. While the revenues
to a local export broker- Grenadier International. from opportunistic markets would contribute to the
The original company objective was to determine fixed costs of domestic production, the long term
"what could be done in foreign markets" using efforts could be pursued for more strategic reasons.
only working capital resources and avoiding By the end of the summer, the study had been
capital investments in equipment or new markets. applied to thirteen international markets, including
Through careful selection of markets on the basis the United States. (See Exhibit 6 for a summary of
of distributor interest, Grenadier's export manager, this study).
Scott Begg, had begun the slow process of Meanwhile, Grenadier had added Hong
introducing Neilson brands into the Far East. The Kong/China, Singapore and New Zealand to
results were impressive. Orders were secured for Neilson's portfolio of export markets, and Bateman
containers of "Mr. Big" and "Crispy Crunch" had contracted a second local broker, CANCON
countlines from local distributors in Korea, Corp. Ltd, to initiate sales to the Middle East. By
Taiwan, and Japan. "Canadian Classics" boxed the end of 1992, the International Division
chocolates were developed for the vast Japanese comprised 9 people who had achieved penetration
gift ("Omiyagi") market. Total 1993 sales to these of 11 countries for export sales (See Exhibit 7 for a
markets were projected to be $1.6 million. description of these markets).
For each of these markets, Neilson retained the
responsibility for packaging design and product
formulation. While distributors offered suggestions THE U.S. EXPERIENCE
as to how products could be improved to suit local
tastes, they were not formally obliged to do so. To In 1991, the American chocolate confectionery
secure distribution in Taiwan, Neilson had agreed market was worth U.S.$5.1 billion wholesale.
to launch the "Mr. Big" bar under the distributor's Neilson had wanted to sneak into this vast market
private brand name "Bang Bang" which was with the intention of quietly selling off excess
expected to generate a favourable impression with capacity. However, as Bateman explained, the
consumers. Although sales were strong, Bateman quiet U.S. launch became a Canadian celebration:
realized that since consumer loyalty was linked to
Next thing we knew, there
brand names, the brand equity being generated for
were brands in the streets,
"Bang Bang" ultimately, would belong to the
Neilson t-shirts and baseball
distributor. This put the distributor in a powerful
caps, and newspaper articles
position from which they were able to place
and T.V. specials describing
significant downward pressure on operating
our big U.S. launch!
margins.
The publicity greatly increased the pressure to
succeed. After careful consideration, Pro Set, a
Market Evaluation Study
collectible trading card manufacturer and marketer,
In response to these successful early exporting
was selected as a distributor. This relationship
efforts Bateman began exploring the possible
developed into a joint venture by which the
launch of Neilson brands into the United States
Neilson Import Division was later appointed
(discussed later). With limited working capital and
distributor of the Pro Set cards in Canada. With an
numerous export opportunities, it became obvious
internal sales management team, full distribution
to the International Division that some kind of
and invoicing infrastructures and a 45-broker
formal strategy was required to evaluate and to
national sales network, Pro Set seemed ideally
compare these new markets.
suited to diversify into confectionery products.
Accordingly, a set of weighted criteria was
Unfortunately, Pro Set quickly proved to be an
developed during the summer of 1992 to evaluate
inadequate partner in this venture. Although they
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had access to the right outlets, the confectionery Trade Agreement (NAFTA). Mexico was an
selling task differed significantly from card sales. attractive market which scored very highly in the
Confectionery items demand more sensitive market evaluation study. Due to its favourable
product handling and a greater amount of sales demographics (50% of the population was within
effort by the Pro Set representatives who were used the target age group), Mexico offered huge
to carrying a self-promoting line. potential for countline sales. The rapid adoption of
To compound these difficulties, Pro Set sales American tastes resulted in an increasing demand
plummeted as the trading-card market became for U.S. snack foods. With only a limited number
over-saturated. Trapped by intense cashflow of competitors, the untapped demand afforded a
problems and increasing fixed costs, Pro Set filed window of opportunity for smaller players to enter
for Chapter 11 bankruptcy, leaving Neilson with the market.
huge inventory losses and a customer base that Working through the Ontario Ministry of
associated them with their defunct distributor. Agriculture and Food (OMAF), Neilson found two
Although it was tempting to attribute the U.S. potential independent distributors:
failure to inappropriate partner selection, the U.S.
had also ranked poorly relative to other markets in Grupo Corvi : a Mexican food manufacturer,
the criteria study that had just been completed that operated seven plants and had an extensive sales
summer. In addition to their distribution problems, force reaching local wholesalers. They also had
Neilson was at a serious disadvantage due to access to a convoluted infrastructure which
intense competition from the major industry indirectly supplied an estimated 100,000 street
players in the form of advertising expenditures, vendor stands or kiosks (known as "tiendas")
trade promotions and brand proliferation. Faced representing nearly 70% of the Mexican
with duties and a higher cost of production, confectionery market. (This informal segment was
Neilson was unable to maintain price usually overlooked by market research services
competitiveness. and competitors alike.) Grupo Corvi currently had
no American or European style countline products.
The International Division was now faced with the Grupo Hajj : a Mexican distributor with some
task of internalizing distribution in the U.S., experience in confectionery, offered access to only
including sales management, broker contact, a small number of retail stores. This limited
warehousing, shipping and collections. Neilson network made Grupo Hajj relatively unattractive
managed to reestablish a limited presence in the when compared to other distributors. Like Grupo
American market using several local brokers to Corvi, this local firm dealt exclusively in Mexican
target profitable niches. For example, they placed pesos, historically, a volatile currency. (In January
strong emphasis on vending-machine sales to 1993, 1 peso = $0.41 CAD.)
increase product trial with minimal advertising. While considering these distributors, Neilson was
Since consumer purchasing patterns demanded approached by Sabritas, the snack food division of
product variety in vending-machines, Neilson's Pepsico Foods in Mexico, who felt that there was a
presence in this segment was not considered strategic fit between their organizations. Although
threatening by major competitors . Sabritas had no previous experience handling
In the autumn of 1992, as the International chocolate confectionery, they had for six years
Division made the changes necessary to salvage been seeking a product line to round out their
past efforts in the U.S., several options for entering portfolio. They were currently each week
the Mexican confectionery market were also being supplying Frito-Lay type snacks directly to
considered. 450,000 retail stores and tiendas (The trade
referred to such extensive customer networks as
"numeric distribution"). After listening to the
MEXICO initial proposal, Neilson agreed to give Sabritas
three months to conduct research into the Mexican
Neilson made the decision to enter the Mexican market.
market late in 1992, prompted by its parent Although the research revealed strong market
company's, Weston Foods Ltd., own investigations potential for the Neilson products, Bateman felt
into possible market opportunities which would that pricing at 2 pesos (at parity with other
emerge as a result of the North American Free American style brands) would not provide any
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competitive advantage. Sabritas agreed that a one resources meant that Neilson would develop its
peso product, downsized to 40 grams (from a U.S.- presence much more slowly. With countline
Canadian standard of 43 to 65 grams), would demand in Mexico growing at 30% per year, could
provide an attractive strategy to offer "imported they afford to delay? Scott Begg had indicated that
chocolate at Mexican prices". early entry was critical in burgeoning markets,
Proposing a deal significantly different from the since establishing market presence and gaining
relationships offered by the two Mexican share were less difficult when undertaken before
distributors, Sabritas intended to market the "Mr. the major players had dominated the market and
Big", "Crispy Crunch" and "Malted Milk" bars as "defined the rules of play."
the first brands in the "Milch" product line. Bateman also questioned their traditional means of
"Milch" was a fictitious word in Spanish, created evaluating potential markets. Were the criteria
and owned by Sabritas, and thought to denote considered in the market evaluation study really
goodness and health due to its similarity to the the key success factors, or were the competitive
word leche ("milk" in Spanish). Sabritas would advantages offered through ventures with
offer Neilson 50% ownership of the Milch name, distributors more important? If partnerships were
in exchange for 50% of Neilson's brand names, necessary, should Neilson continue to rely on
both of which would appear on each bar. As part of independent, national distributors who were
the joint branding agreement, Sabritas would interested in adding Neilson brands to their
assume all responsibility for advertising, portfolio, or should they pursue strategic
promotion, distribution and merchandising. The partnerships similar to the Sabritas opportunity
joint ownership of the brand names would provide instead? No matter which distributor was chosen,
Sabritas with brand equity in exchange for building product quality and handling were of paramount
brand awareness through heavy investments in importance. Every chocolate bar reaching
marketing. By delegating responsibility for all consumers, especially first time buyers, must be of
marketing efforts to Sabritas, Neilson would be the same freshness and quality as those distributed
able to compete on a scale not affordable by to Canadian consumers. How could this type of
Canadian standards. control best be achieved?
Under the proposal, all "Milch" chocolate bars
would be produced in Canada by Neilson. Neilson
would be the exclusive supplier. Ownership of the EXHIBIT 1 : World Chocolate exports (Value
bars would pass to Sabritas once the finished goods as % of Total) - 1990
have been shipped. Sabritas in turn would be 1 987 1988 1989 1990
responsible for all sales to final consumers. Africa x1,5 x1,0 x1,1 x0,7
Sabritas would be the exclusive distributor. Americas 8,10 9,10 9,2 x9. 1
Consumer prices could not be changed without the LAIC1 2,10 1,90 1,4 x1,4
mutual agreement of Neilson and Sabritas. CACM2 0,10 x0,1 x0,1 x0,1
Asia 2,50 3,20 3,40 2,90
Middle East x0,5 x0,5 x0,7 x0,4
ISSUES Europe 86,40 85,00 84,20 85,40
Bateman reflected upon the decision he now faced EEC (12)3 73,30 71,80 71,30 73,50
for the Mexican market. The speed with which EFTA4 12,50 12,70 12,10 11,50
Sabritas could help them gain market penetration, Oceania x1,5 1,80 x2,1 x1,8
their competitive advertising budget, and their Figures denoted with an x are provisional or estimated.
"store door access" to nearly a half million retailers Adapted from: The United Nations International Trade
were attractive advantages offered by this joint Statistics Yearbook, Vol. 11, 1990
venture proposal. But what were the implications 1 LAIC = Latin American Industrialists Association
2 CACM = Central American Common Market.
of omitting the Neilson name from their popular 3 EEC (12) = The twelve nations of the European
chocolate bars? Would they be exposed to Economic Community.
problems like those encountered in Taiwan with 4 EFTA = European Free Trade Association.
the "Bang Bang" launch, especially considering the
strength and size of Pepsico Foods?
The alternative was to keep the Neilson name and
to launch their brands independently, using one of
the national distributors. Unfortunately, limited
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EXHIBIT 2 : Single Bars Canadian Market EXHIBIT 5 : World Chocolate Imports (Value
Share : 1991-1992 as % of Total) - 1990
Manufacturer 1992 1991 1987 1988 1989 1990
Neilson 28.1% 29.4% Africa x0,7 x0,7 x0,7 x0,7
Nestlé/Rowntree 26.9% 26.2% Americas x15,6 x15,0 x13,9 x13,2
Hershey/Lowney 21.6% 21.9% LAIC1 0,20 0,40 1,10 xl.3
M&M/Mars 18.7% 19.0% CACM2 x0,1 x0,1 x0,l x0,1
Others 4.7% 3.5% Asia 11,70 x13,9 15,60 12,90
Source : Neilson News, Issue # 1, 1993
Middle East x3,5 x3,3 x3,9 x2,8
Europe 70,80 68,90 67,70 71,40
EEC (12)3 61,10 59,50 57,70 59,30
EXHIBIT 3 : Top Single Bars in Canada : EFTA4 9,30 9,00 8,90 8,40
Oceania x1,3 1,70 x2,l x1,8
1991-1992
Top Single Bars Manufacturer 1992 1991 Figures denoted with an x are provisional or estimated.
Crispy Crunch Neilson 1 1 Adapted from: The United Nations International Trade
Coffee Crisp Nestlé/Rowntree 2 3 Statistics Yearbook, Vol. 11, 1990
Kit Kat Nestlé/Rowntree 3 2 1 LAIC = Latin American Industrialists Association
Mars Bar M&M/Mars 4 4 2 CACM = Central American Common Market.
Caramilk Cadbury Schweppes 5 6 3 EEC (12) = The twelve nations of the European
Oh Henry! Hershey/Lowney 6 5 Economic Community.
Smarties Nestlé/Rowntree 7 7 4 EFTA = European Free Trade Association.
Peanut Butter Hershey/Lowney 8 8
Cups
Mr. Big Neilson 9 11
Aero Hershey/Lowney 10 10
Snickers M&M/Mars 11 9
Crunchie Cadbury-Schweppes 12 12
Source : Neilson News, Issue # 1, 1993
EXHIBIT 4 : Canadian Confectionery Market
– 1993 -
Dollars %
(millions)
Total Confectionery $1 301,4 100,00
Category
Gum 296,50 22,80
Boxed Chocolates 159,70 12,30
Cough Drops 77,00 5,90
Rolled Candy 61,30 4,70
Bagged Chocolates 30,30 2,30
Easter Eggs 22,00 1,70
Valentines 9,40 0,70
Lunch Pack 3,60 0,30
Countline Chocolate Bars 641,60 49,30
Total Chocolate Bar Market
+8%
Growth
Source : Neilson Marketing Department Estimates
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EXHIBIT 6 : Summary of Criteria for Market Study (1992)
Criteria Weight Australia China Hong Indonesia Japan Korea Malaysia New Singapore Taiwan Mexico EEC USA
Kong Zealand
U.S. Countline - 4 4 4 4 4 4 4 4 4 4 4 4 4
1 Candybar Economics 30 20 20 30 20 20 28 20 15 25 15 20 10 10
2 Target Market 22 12.5 14 13 15.5 19 15 10 7 9.5 12.5 21 22 22
3 Competitor Dynamics 20 12 15 8 7.5 11 13.5 10 12 14.5 12 11 20 6.5
4 Distribution Access 10 9 4 4 3.5 5 6 6.5 9 3.5 7.5 9.5 9 9
5 Industry Economics 9 2.5 3.5 6 5.5 2 5 2.5 7 4.5 3 3.5 3.5 4.5
6 Product Fit 8 7 6 6 6 3 7.5 7.5 7.5 8 4 8 5 8
7 Payback 5 4 4 1, 2.5 4 5 2.5 4 2 2 5 2 1
8 Country Dynamics 5 5 1 4 3 5 3.5 4.5 4.5 5 4 3 2 4
Total 109 72 67.5 72 63.5 69 83.5 63.5 66 72 60 81 73.5 65
Due to Neilson/Cadbury's limited resources, it Competitor Dynamics Score Mexico
was not feasible to launch the first western-style
Financial Success of Other 0-8 5
brands into new markets. The basic minimum
criterion for a given market, therefore, was the Exporters
presence of major western industry players (i.e., Nature (Passivity) of 0-6 2.5
Mars or Hershey). Countries were then measured on Competition
the basis of 8 criteria which were weighted by the Brand Image (vs Price) 0-6 3.5
International Group according to their perceived Positioning
importance as determinants of a successful market
entry. (See above table). Each criterion was then Score/20 20 11
subdivided into several elements as defined by the
International Group, which allocated the total This illustration depicts a single criterion, subdivided and
weighted score accordingly. (See table, right). scored for Mexico.
Source: Company Records
EXHIBIT 7 : Neilson Export Markets - 1993
Agent (Commission) Country Brands
Grenadier International Taiwan Bang Bang
Japan Canadian Classics, Mr. Big, Crispy Crunch
Korea Mr. Big, Crispy Crunch
Hong Kong/China Mr. Big, Crispy Crunch, Canadian Classics
Singapore Mr. Big, Crispy Crunch
Cancon Corp. Ltd. Saudi Arabia Mr. Big, Crispy Crunch, Malted Milk
Bahrain Mr. Big, Crispy Crunch, Malted Milk
U.A.E Mr. Big, Crispy Crunch, Malted Milk
Kuwait Mr. Big, Crispy Crunch, Malted Milk
Neilson International Mexico Mr. Big, Crispy Crunch, Malted Milk
U.S.A Mr. Big, Crispy Crunch, Malted Milk
Source : Company Records
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