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EXECUTIVE SUMMARY
This business proposal will outline how Canned Sausage will revolutionize the Mexican meat market by targeting men and women of all ages who are meat lovers. The goal of this company is to cater to consumers in the regions who lack the necessary fridge space to store meats. By providing such product, we help consumers worry less about which foods are going to fit in their fridge and more about feeding high quality meats to their family.
RATIONALE
Mexico is in the top 20 meat consuming countries in the world. I decided to select this country because it is located right below the U.S. which makes it the ideal place to export an American product. Thanks to NAFTA, there will be no tariffs on our product, and since the distance between the countries is nonexistent, our costs are going to be very low thus, increasing our profit margin.
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I want to target housewives in Nuevo Leon, Mexico. The reason being is that according to ElFinanciero, Nuevo Leon leads the country in meat consumption per capita with 30 kilograms of meat consumed every year. Based on personal research, Nuevo Leon is the 8th most populated state in Mexico and in total, there are 1,393,542 households in the state. Out of those 1,393,542, 89.5% are family households, meaning that couples live with their kids and possibly their parents as well.
Some political risk we may face by exporting our product here would be the special license needed to import meat into Mexico. The Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Food (SAGARPA) requires “an import permit prior to import authorization for some leather and fur products, and fresh/chilled and frozen meat” according to export.gov. By acquiring the right permits, importing meat to this state should not be a problem at all but we will make sure all our permits are up to date.
Contrary to popular beliefs, Mexicans consume a lot of meat on a yearly basis. This is why going into this market is going to be easy. Many people in Mexico consume a lot of canned foods since most of the people work all day and it is easier for them to consume something already premade than cooking everything from scratch. Our product is going to make their lives easier when it comes to keeping sausages fresh and ready to consume at any time of the day.
Value Analysis
We all have the problem of having a lot of meat in our freezers or fridges, sometimes we may have so much that we forget to cook some of it and it goes bad. According to the Food Safety and Inspection Services (FSIS), cooked sausages, last about 2 weeks when they are stored in a refrigerator, and 1 to 2 months when they are stored in a freezer. With Libby’s Vienna Sausages, the customer will not have to worry about sausages going bad. According to StillTasty, Libby’s Vienna Canned Sausages last between 2 to 5 years when they are unopened. Customer just have to store the cans in a cool, dry area and the sausages will still be good months after they are purchased.
Like stated before, Mexico is one of the top 20 countries in the world that consumes the most meat per capita. They love all types of meat, whether it is chicken, beef, or pork, they are not going to go a day without eating meat. Libby’s Vienna Sausages offers the option to have cheap, great tasting meat available whenever they need it. Housewife’s can cook amazing tasting food for their family member without having to spend a lot of money on anything.
With Libby’s Vienna Sausages, the benefits outweigh the costs. Families can enjoy a family weekend, whether it is at a park or at home, making hotdogs, or other similar foods without having to spend so much money buying regular sausages. By buying regular sausages, they run the risk of them going bad if they are not stored in a cool area soon. With Libby’s Vienna Sausages, they don’t have to worry about this at all. Customers may pay more to have the regular sausages; Libby’s Vienna Sausages will be affordable to every family in the city.
The Competitive Environment
For many decades, Fud has been the top provider of sausages to all Mexicans. They have many options when it comes to picking a sausage. Fud does not only make sausages, but they sell other products like ham, cheese, bacon, and pizzas. They also sell different types of sausages like whole sausages, and chopped sausages. You can find Fud products pretty much in every store you visit in Mexico so it is very easy for customers to get their hands on them.
Since there are a few regulations when it comes to selling food in Mexico, people can make their own sausages if they have the resources, and they can sell them whenever and wherever they please. Those people can provide the customers with freshly made sausages for a cheap price.
Although competition will be tough in this market, it will not be very hard to compete in this market. Yes, both of these competitors offer what I offer but they are never going to be able to compete against me when it comes to the durability of my product without needing refrigeration. Like stated before, unopened sausages sold by competitors last about 2 weeks when they are stored in a fridge or 1 to 2 months when they are stored in a freezer. Libby’s Vienna Sausages can las between 2 to 5 years without needing any type of refrigeration. Our canned product will surely attract many customers who are constantly worrying about their food going bad.
Marketing Mix
One reason Libby’s Vienna Sausages is widely known in the United States is because of its cheap price. In the U.S, Libby’s Vienna Sausages are priced at less than $1 plus tax in stores like Walmart, Target, and Sam’s Club and other convenient stores around the country. We would offer these sausages at the low price of $12 pesos. The reason for this is that since our product comes in a can, we can only fit 7 medium size sausages. If we price our product at any price higher than this, the demand will decrease significantly. If for whatever reason we do not sell as much as we project, we can always lower the price by $2 pesos to increase demand.
Libby’s Vienna Sausages are sausages that instead of coming in a regular plastic wrap, they are canned. This increases the amount of time these sausages can last without refrigeration dramatically. Not many stores in Mexico have refrigerators so they can display this product like any other product without the risk of the sausages going bad.
Our market entry strategy will be based on direct exporting. We will do this by establishing agents and authorized distributors for our product through the region we are targeting. Our goal is to penetrate the market as quickly as possible in order to keep costs low.
Our advertising strategy will include T.V commercials, billboards, and the internet. Millions of people watch television, so it will be very easy to reach my intended target segment. We will invest most of my marketing budget on T.V commercials, followed by billboards, and lastly the Internet. We do not want to spend so much of my funds on internet advertising because it is usually fairly inexpensive. By investing heavily on these advertising medias, we will make our product be known fairly quickly.
Conclusion
We will target the women of all ages of Nuevo Leon, Mexico to sell our product. The reason for this is that Mexico is one of the top 20 countries in the world where people consume the most meat. There is a big problem everywhere that our foods will go bad if we do not consume them quickly, but Libby’s Vienna Sausages gets rid of that problem temporarily.
Our product can last up to 5 years if it’s unopened and stored in a cool and dry area. Libby’s Vienna Sausages will make it easy for housewives to feed their kids and spouse something tasty and inexpensive. Competition will be hard in this region, but we believe that based on the price that are selling our product for, it will very easy to gain a descent percentage of the market share. We will use T.V commercials, billboards, and the internet to market our product and with the right amount of money invested, we will capture the attention of our customers in no time.
