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Product
Creación Fuego will be launching three health and beauty products in a bundle. We will be selling Fuego
Caliente Wash, Fuego Styler, and the Fuego Rose. All three products are designed to fit the typical
Argentina consumer’s daily need for health and beauty products.

The product labels are black with the Creación Fuego logo along with the product description. We chose
a black label so that the flame in our logo would standout, enhancing its importance. The label also
features the description of the products and their use.

The Fuego Caliente Wash was created for our users to experience an explosion of scents. With our great
smelling soap and explosive bursts, the Caliente Wash gives users everything they want. Designed to
soften skin and dry spots. Our scent bursts contains skin-natural building blocks to help improve skin's
look over time. Use daily for visibly more beautiful skin in just one week.

Fuego Styler gel gives you the balance of powerful hold and natural touchability. This non-stiff formula is
made with advanced styling resins for absolute durability and absolute flexibility. This alcohol free, non-
sticky gel will keep your hair feeling touchable and in control for invisible styling power!

Fuego rose petal soaps are a lovely complement to any décor! Beautiful, fresh arrangements of
colorfully blooming soap rose buds are ideal for dressing up bathrooms, spas, and salons. Simply wet the
individual petals in water and rub between hands for a rich, luxurious lather with a fresh garden scent.

Price
We will price our product at 40 ARS. This is a competitive price in the given industry. This price will
allow the company to deal with any increases or decreases in the cost of manufacturing. Along with
this, the retailer will be given the opportunity to adjust prices depending on the region they are selling
in. Our end price for our product includes any taxes consumers would pay.

Pricing Policy
Geocentric—the practice of using both extension and adaptation pricing policies in different country
markets

       Represents an intermediate course of action
       Based on the realization that unique local market factors should be recognized in arriving at
        pricing decisions
            o These factors include
                      Local costs
                      Income levels
                      Competition
                      Local marketing strategy
       Recognizes that price coordination from headquarters in necessary in dealing with international
        accounts and product arbitrage
       Conscientiously and systematically seeks to ensure that accumulated national pricing experience
        is leveraged and applied wherever relevant

Pricing objectives and strategy
Market Penetration—a pricing strategy that calls for setting price levels that are low enough the quickly
build market share

       This is to be used in the beginning of the product lifecycle, when the products are just being
        introduced into the markets




Market Skimming—a pricing strategy that is often part of a deliberate attempt to reach a market
segment that is willing to pay a premium price for a particular brand

       This is to be used when the product life cycle is in the end of the growth stage and beginning the
        maturity stage.

Price Structure
Entry Mode-Contract Manufacturing1
    • A licensing arrangement in which a company provides technical specifications to a subcontractor
        or local manufacturer
    • Subcontractor oversees production
    • Creación Fuego can specialize in product design and marketing, while transferring responsibility
        for ownership of manufacturing to subcontractors
    • Limited commitment of financial and managerial resources
Documents Needed2
    • Export Documents3
    • Bill of Lading
    • Certificate of Origin
    • Commercial Invoice
    • Customs export declaration

1
  Textbook
2
  http://www.doingbusiness.org/data/exploreeconomies/argentina/#starting-a-business
3
  http://www.doingbusiness.org/data/exploreeconomies/argentina/#trading-across-borders
      •   Packing List
      •   Tax certificate
      •   Terminal handling receipts
      •   Import Documents4
      •   Bill of lading
      •   Certificate of origin
      •   Commercial invoice
      •   Customs import declaration
      •   Packing list
      •   Technical standard/health certificate
      •   Terminal handling receipts
      •   Request to name the company to be verified by the Office of Corporations (Inspección General
          de Justicia) (IGJ)
      •   Publish the new company’s notice in the official paper (Boletín Oficial)
      •   Corporate manager needs to obtain a Fiscal Code (Clave Fiscal)
      •   Obtain a tax identification number (CUIT) from the National Tax Office (Administración Federal
          de Ingresos Públicos, AFIP) and register for social security
      •   Register turnover tax at local level at the Dirección General de Rentas (DGR) in the City of
          Buenos Aires
      •   Register with the Unified System for Labor Registration (USLR)
      •   Rubricate books of wages in the Ministerio de Trabajo (Ministry of Labor)


Taxes/Start Up Costs5
   • Taxes and mandatory contributions that a medium-size company must pay or withhold in a
       given year
Indicator                                                                 Argentina    L.A. & Caribbean    OECD
The total number of tax payments per year. The indicator reflects the              9                  32      13
total number of taxes and contributions paid, the method of payment,
the frequency of payment and the number of agencies involved for a
standardized case during the second year of operation.
View methodology Payments (number per year)
The time it takes to prepare, file and pay (or withhold) the corporate          415                 382      186
income tax, the value added tax and social security contributions (in
hours per year).
View methodology Time (hours per year)
The amount of taxes on profits paid by the business as a percentage of           2.8               19.9     15.4
commercial profits.
View methodology Profit tax (%)
The amount of taxes and mandatory contributions on labor paid by the           29.4                14.6     24.0
business as a percentage of commercial profits.
View methodology Labor tax and contributions (%)


4
    http://www.doingbusiness.org/data/exploreeconomies/argentina/#trading-across-borders
5
    http://www.doingbusiness.org/data/exploreeconomies/argentina/#paying-taxes
The amount of taxes and mandatory contributions paid by the business as           76.1                  13.2      3.2
a percentage of commercial profit that are not already included in the
categories of profit or labor taxes.
View methodology Other taxes (%)
The total tax rate measures the amount of taxes and mandatory                   108.2                   47.7     42.7
contributions payable by the business in the second year of operation,
expressed as a share of commercial profits.
View methodology Total tax rate (% profit)


Tax or mandatory    Payments     Notes on     Time      Statutory tax     Tax base           Total        Notes on
contribution        (number)     Payments     (hours)   rate                                 tax rate     TTR
                                                                                             (%
                                                                                             profit)
Turnover tax by     1            online                 3.0%              turnover                 53     time spent
City of Buenos                   filing                                                                   on this is
Aires                                                                                                     included in
                                                                                                          VAT
Social security     1            online       70        23%               gross salaries        25.9
contributions                    filing
Tax on financial    1                                   0.60%             any amount            17.6
(check)                                                                   debited or
transactions                                                              credited to bank
                                                                          accounts
Property tax        1            online                 varies            fiscal value of        3.6
                                 filing                 (0,582% +         building and
                                                        ARS 14,364 )      land
Labor Risk          0            paid                   3% (+ ARS 0.6     gross salaries         3.4
Insurance                        jointly                per employee
                                                        per month)
Corporate income    1            online       105       35%               taxable profit         2.8
tax                              filing
Fuel tax            1                                   ARS               liter                  0.9
                                                        0.795/liter       consumption
Stamp tax on sale   1                                   50% of 2.5%       sale price             0.8
of a real estate
Vehicle tax         1                                   2.30%             fiscal value of        0.3
                                                                          vehicle
Subway tax          0            paid                   10.00%            vehicle tax paid         0      included in
                                 jointly                                                                  other taxes
Value added tax     1            online       240       21%               value added                     not
(VAT)                            filing                                                                   included
Totals:             9                         415                                              108.2
Other Fees6
   • Cost to Export--> $1480 (USD)
            • Export Procedures
                   Export Procedures                           Duration (days)    US$ Cost
                   Documents preparation                                      6          450
                   Customs clearance and technical control                    2          120
                   Ports and terminal handling                                2          500
                   Inland transportation and handling                         3          410
                   Totals                                                    13        1,480


      •   Cost to Import-->$1810 (USD)
      •   Import Procedures
                   Import Procedures                           Duration (days)    US$ Cost
                   Documents preparation                                      8          610
                   Customs clearance and technical control                    3          150
                   Ports and terminal handling                                3          700
                   Inland transportation and handling                         2          350
                   Totals                                                    16        1,810


      •   **These include costs for documents, administrative fees for customs clearance and technical
          control, customs broker fees, terminal handling charges and inland transport. The cost does not
          include customs tariffs and duties or costs related to ocean transport. Only official costs are
          recorded
           Indicator                              Argentina    Latin America & Caribbean       OECD
            Documents to export (number)                   7                             6          4
            Time to export (days)                         13                            18         11
            Cost to export (US$ per container)        1,480                          1,257      1,032
            Documents to import (number)                   7                             7          5
            Time to import (days)                         16                            20         11
            Cost to import (US$ per container)        1,810                          1,546      1,085




6
    http://www.doingbusiness.org/data/exploreeconomies/argentina/#trading-across-borders
        •    Starting a Business costs
Procedure                                                                                 Associated Costs
The name of the company is verified by the Office of Corporations (Inspección             ARS 75
General de Justicia) (IGJ)
Certify signatures of partners by a notary public                                         ARS 650 (cost of 5 notarized
                                                                                          signatures)
Deposit initial capital in National Bank (Banco de la Nación Argentina) and obtain        ARS 30
proof of payment
Publish the new company’s notice in the official paper (Boletín Oficial)                  ARS 2,035 (expedited publication
                                                                                          fee)+ ARS 100 (legalization of
                                                                                          signature)
Payment of the incorporation fee                                                          ARS 30
Registration with the IGJ, entity operating the Public Registry of Commerce in the City   ARS 250
of Buenos Aires.
Buy special books                                                                         fees included in procedure 8
Get a form from the Public Notaries College and have a notary public submit the           ARS 760
company books for rubrication by IGJ
Corporate manager needs to obtain a Fiscal Code (Clave Fiscal)                            no charge
Obtain a tax identification number (CUIT) from the National Tax Office                    no charge
(Administración Federal de Ingresos Públicos, AFIP) and register for social security
Register turnover tax at local level at the Dirección General de Rentas (DGR) in the      ARS 50
City of Buenos Aires
Register with the Unified System for Labor Registration (USLR)                            no charge
Contract an insurance for employees with a risk labor company (ART, Aseguradora de        no charge
Riesgos del Trabajo)
Rubricate books of wages in the Ministerio de Trabajo (Ministry of Labor)                 ARS 75


    Promotion
    Creación Fuego will be launching our product on November 11, 2011 in Buenos Aires. After a short trial
    period of three months in Buenos Aires we will then expand into large cities for six months, and based
    on success, we will then move to smaller cities. On November 11, 2011, we will be promoting our
    product by handing out free samples at all Falabella locations.

    Creación Fuego has signed Professional soccer players such as Lionel Messi, Sergio Aguero, and soccer
    legend Diego Maradona. We have also signed Luisana Loreley De La Torre, professional actress. These
    celebrities will be handing out our free samples on November 11, 2011 at our main locations. Along
    with celebrity endorsements, Creación Fuego will be promoted through the following methods of
    advertisement: billboards, print ads, web ads, commercials, viral videos, radio ads, and direct mail.

    Creación Fuego believes that Public Relations is a very important aspect to the company. They Public
    Relations team is given a large budget to ensure that all consumers are aware of our products and their
    use. Our staff has created social media accounts for Creación Fuego, realizing the importance of
    technology in recent years. Fans can follow us on Twitter @creacionfuego as well as “like” us of
    Facebook.
The most important aspect of our promotion is our logo. Creación Fuego’s logo is a flame, representing
the “fire” and intensity of our products. We provide our consumers with invigorating health and beauty
products for their daily needs. This easy to recognize logo is on all of Creación Fuego’s products.

Place: Distribution
          Our products have to main distribution methods. The first type of distribution channel is
designed to put products in the hands of people for their own use. The products will start at the
business’s production site, be shipped to our retailers where consumers can purchase them. The second
type of distribution channel is designed to allow a one-stop shopping experience when consumers visit
our website. The products will be readily available through our website for consumers to order. The
products will be mailed from our processing center, in this case, skipping the retailer.7Creación Fuego
uses “Indirect Involvement” meaning we utilize independent retailers rather than having our own sales
force or having our own retail stores. As for International Exposure, Unfortunately, we currently do not
sell to international customers. We may be looking towards that as a long-term goal about 5-10 years
away. In the major cities (populations over 250,000 people, ex. Buenos Aires, Rosario, La Plata, Salta,
and Santa Fe) we use intensive distribution. However in the rural areas (populations less than 250,000
people, ex. Caseros, Trelew, Burzaco, and Santa Rosa) we are using Selective Distribution. (Keegan, 371)
          Intensive distribution aims to provide saturation coverage of the market by using all available
outlets. Intensive distribution is usually required where customers have a range of acceptable brands to
choose. In other words, if one brand is not available, a customer will simply choose another. On the
other hand, Selective distribution involves a producer using a limited number of outlets in a
geographical area to sell products. An advantage of this approach is that the producer can choose the
most appropriate or best-performing outlets and focus effort on them. Selective distribution works best
when consumers are prepared to "shop around" or in other words, they have a preference for a
particular brand or price and will search out the outlets that supply.8
          We follow four main distribution objectives. As for “Place Utility,” our products more readily
available in large cities. The larger cities with larger populations have more retailers that carry our
products. As for “Time Utility,” these products are made in bulk, making them available when desired by
customers. In regards to “Form Utility” our products are sold in ready to use form, meaning that there is
no assembly needed. Our consumers can just open the products & start applying. An finally in terms of
“Information Utility,” each of our products have labels to explain how to use them. If customers have
further questions, they can visit our website to contact employees directly.9
          Our company uses three main types of Retail Operations. We are located in department stores,
supercenters & supermarkets. As for Department stores, in Buenos Aires, upscale department stores
came during the early years of the 20th century. Gath & Chávez opened in 1905 and Harrods Buenos
Aires was established in 1912. Today, the Chilean department store Falabella is one of the most

7
  Keegan, Warren J., and Mark C. Green. Global marketing management. 6th ed. Upper Saddle River, N.J.: Prentice
Hall, 2002. Print.
8
  Keegan, Warren J., and Mark C. Green. Global marketing management. 6th ed. Upper Saddle River, N.J.: Prentice
Hall, 2002. Print.
9
  Keegan, Warren J., and Mark C. Green. Global marketing management. 6th ed. Upper Saddle River, N.J.: Prentice
Hall, 2002. Print.
prominent in the country, with branches in Buenos Aires, Córdoba, San Juan, Mendoza, and Rosario.
Falabella is one of the most popular stores in Argentina today.10
         With our products being sold in supercenters as well, we look to Walmart to be our biggest
retailer. In 1997, Walmart entered Argentina with one Supercenter in Avellaneda (Greater Buenos
Aires). After slow growth during the following decade, the Market stores developed a new store format
inspired. The new stores were branded Chango Mas. Expansion followed rapidly and other smaller
formats spun off this concept. As of October 31, 2011 the Total retail units is up to 67. There are 28
Walmart Supercenters, 27 Changomas, 7 Changomas Express and 5 Mi Changomas.11
         We are also located in some supermarkets. The Coto group enjoys a 17% market share
nationwide (reaching 28% in the metro Buenos Aires area), and operates 95 supermarkets, 16
hypermarkets, 5 shopping malls, 3 slaughterhouses, the distribution center, and a logistics unit of 183
trucks. Coto's most significant competition, and that of Argentine supermarkets in general, is that of the
growing number of Asian Argentine grocers, which by 2010 numbered around 8,000, and whose
combined earnings approached those of the Coto chain.12




10
   Retail Chile Falabella To Open 40 Stores Regionally In 2011 - Report, by Anthony Esposito, Dow Jones News,
November 12, 2010
11
   http://walmartstores.com/AboutUs/243.aspx
12
   http://www.fundinguniverse.com/company-histories/Coto-Centro-Integral-de-Comercializacion-SA-company-
History.html

				
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