Beruflich Dokumente
Kultur Dokumente
Allison Caister, Mary Karle, Jacob Lampman, Elijah Melton, Nicolette VanDyke
MKTG 441 - 001 Term Paper
Table of Contents
Executive Summary......................................................................................................................... 4
Proposal NEI .................................................................................................................................... 5
Company Information ..................................................................................................................... 6
Product Information ....................................................................................................................... 6
Making Peanut Butter ................................................................................................................. 6
Peanut Varieties .......................................................................................................................... 7
Prices ........................................................................................................................................... 8
History of Peanut Butter ............................................................................................................. 8
Peanut Butter Industry ................................................................................................................ 9
Sweden - Preliminary Indicators of Market Need .......................................................................... 9
Italy - Preliminary Indicators of Market Need .............................................................................. 10
Sweden - Industry Information ..................................................................................................... 10
Five Forces Analysis ................................................................................................................... 11
Buyer Power .......................................................................................................................... 11
Supplier Power....................................................................................................................... 12
New entrants ......................................................................................................................... 12
Threat of Substitutes ............................................................................................................. 13
Degree of rivalry .................................................................................................................... 13
Italy - Industry Information ........................................................................................................... 14
Five Forces Analysis ................................................................................................................... 14
Buyer Power .......................................................................................................................... 15
Supplier Power....................................................................................................................... 15
New Entrants ......................................................................................................................... 16
Threat of Substitutes ............................................................................................................. 16
Degree of Rivalry ................................................................................................................... 17
Sweden - Competitive Information .............................................................................................. 18
Kalles ......................................................................................................................................... 18
Lingonberry jam ........................................................................................................................ 19
Italy - Competitive Information .................................................................................................... 19
Nutella ....................................................................................................................................... 19
Almond Paste ............................................................................................................................ 20
Sweden - Target Audience ............................................................................................................ 21
Ideal Customer in Sweden ........................................................................................................ 21
Italy - Target Audience .................................................................................................................. 22
Ideal Customer .......................................................................................................................... 22
Chapter Discussions ...................................................................................................................... 23
Chapter 1 - Globalization Imperative ........................................................................................ 23
Chapter 2 - Economic Environment .......................................................................................... 24
Chapter 3 - Political/Legal/Regulatory Environment ................................................................ 25
Potential Laws & Policies ....................................................................................................... 25
Chapter 4 - Global Cultural Environment & Buying Behavior ................................................... 26
Hofstedes Analysis of Culture & Marketing ......................................................................... 26
Attitude and Culture .............................................................................................................. 28
Chapter 5 - Global Marketing Research .................................................................................... 29
Chapter 6 - International Marketing Channels ......................................................................... 30
Chapter 7 - Product and Services for Consumer ....................................................................... 31
Chapter 8 - Communicating with the World Consumer ........................................................... 32
Current Ad Agency: BBDO Minneapolis ................................................................................ 32
Local Swedish Agency: Creuna .............................................................................................. 33
Local Italian Agency: DLV BBDO ............................................................................................ 34
Media Evaluation ................................................................................................................... 34
Chapter 9 - Pricing Decisions ..................................................................................................... 36
Final Decision ................................................................................................................................ 37
Citations ........................................................................................................................................ 38
Appendix A - Market Research Survey ......................................................................................... 41
Executive Summary
Skippy is a brand of Peanut Butter Manufactured by Hormel Foods in the United States of
America. It is Skippys desire to extend their brand of peanut butter overseas into Sweden or
Italy. Both of these countries were determined to be markets where Skippy peanut butter
would be the most successful through our teams brief introductory research. After,
determining these two countries as our alternatives, we set out to determine through extensive
research and calculations, which country we would eventually introduce to Skippy Peanut
Butter.
The first issue to be determined was how to take advantage of the National Export
Initiative. Skippy quickly decided that we wished to take part in this initiative in some fashion,
to benefit Skippy and the United States economy. It was decided that the most logical plan was
to grow and produce the peanut butter here in the United States with Skippys already
established growers and factories. Denmark was chosen due to the fact the Hormel already has
production and distribution centers there, and it is reasonably close to both Sweden and Italy.
Both Sweden and Italy were immediately determined to be attractive markets for
peanut butter due to their large presence of every peanut butter brands largest global
competitor, Nutella. This threat is much more pronounced in Italy, due to the fact that Italy is
Nutellas birth place. Both countries also have many other popular snacks and spreads that
could easily be replaced the peanut butter. However, it is difficult to compare peanut butter to
other foods due to its unique nature. Our team determined that Skippy Peanut butter would be
in the savory snack market, after much consideration. A Porter's Five Forces analysis found that
Sweden and Italy have relatively similar savory snack industries.
It was logically concluded that the most effective target market for either country would
be mothers who would be feed Skippy to their families. After researching the country's
populations it was discovered that both had a significant number and women and children.
Further cultural research uncovered that these countries are also considerably health conscious
and prone to snacking. This lead to the decision to have a target audience of women between
the ages of 25-54 years old.
Due to stricter regulations and attitudes in regards to genetically modified and
unhealthy foods, the Skippy team concluded that they would attempt to introduce Skippy
Natural peanut butter to our chosen country. It was also decided that Skippy would be rebranded to be more mature, so that it would be more appealing to these markets.
The Skippy team evaluated the current advertising agency and marketing efforts of
Skippy peanut butter. We then chose a new advertising agency in each country to represent the
Skippy brand, should we chose to go there. The Sweden agency chosen was Creuna and the
Italian agency chosen was DLV BBDO.
After team Skippy completed their analysis of both countries it was decided that we
would expand into Sweden. This was decided after looking at many different cultural, political,
logistical, competitive and pricing factors in both countries. All of these factors and many more
will be discussed in detail throughout this paper.
Proposal NEI
The National Export Initiative was introduced by President Obama and his administration in
2010. The initiative aims to encourage companies to export more by informing companies
about opportunities and assisting them in the process. Some measures provided by the
program include promoting export financing, educating companies about free trade markets,
and enforcing international trade agreements by investing unfair trade practices overseas. The
program believes in increasing exports to create lasting jobs and increase U.S. companies
revenues.
Exporting Skippy Peanut Butter from the United States would benefit both the U.S.
Economy and Sweden or Italys economy. According to the USDA, China is currently the number
one peanut cultivator in the world, and the United States follows up at number three after
India. Since peanuts are not native to Sweden or Italy, exporting Skippy would mean an
opportunity for peanut farming growth in the United States. It would be beneficial to the
economy, to grow the peanuts in the United States as opposed to buying them from China or
India. This would also mean exporting Skippy could generate revenues and jobs in the United
States as well as in the host country.
Skippys current sales numbers are estimated to be around $370 million with $100
million of that resulting from worldwide sales (Hormel, 2013). Based on similar product sales, a
conservative estimate for initial sales would be around 350,000 jars at about $5.72 each. This
would ideally result in about $2 million in sales. With the help of the NEI, Skippys venture into a
new country could increase international sales by 2% in the first year alone. Using the rough
estimate of $185,000 in revenue per job, this venture would create 10 permanent jobs to start.
There would also be jobs created for peanut growers since it takes about 1800 peanuts for a 40
oz. jar of peanut butter. This equates to about 4 lbs of peanuts per 40 oz. jar. An acre of peanut
plants usually yields around 4,000 lbs of peanuts, so 350,000 additional jars (or 1.4 million lbs of
peanuts) would require 350 new acres of peanut farming.
Company Information
As of January 2013, Skippy Peanut Butter is owned by Hormel Food Corporation. Skippy was
first sold in 1933 by Joseph Rosenfield. His goal was to make a less sticky peanut butter that
lasted longer than current market offerings. In 1955, Skippy was acquired from Rosenfield by
Best Foods which is most well known for producing Hellmans mayonnaise. Skippy eventually
went on to be purchased by Unilever who sold the brand to Hormel. Skippy has two production
facilities; one is in Little Rock, AK and the other is in Shandong Province, China. The brand
enjoys success in China and is the number one selling peanut butter product in the country.
Skippy is not publicly traded, so corporate information
isnt widely available. Hormel Foods, however, is traded on
the New York Stock Exchange and S&P 500. Hormel was
founded in 1891. Today, it employs over 20,000 employees
and experiences revenues over $8 billion. Hormel already has
a presence in China in the form of Spam. Spam is marketed as
an upscale product in China, and Hormel is taking a similar
approach with Skippy. The containers sold in China still contain the Skippy name, however the
Chinese name also on the jars is Four Seasons Treasure. Hormel aims to market Skippy as
more than just a food spread; its marketed as an important ingredient to main course dishes.
Product Information
Making Peanut Butter
Peanut butter is a food paste that is made primarily from
ground, dry roasted peanut. The creation of Peanut Butter
begins with the peanuts being planted. This usually occurs
after the last frost of April, when the soil warms up. Peanuts
are warm-season annuals that require a soil temperature of
65 F for germination and a minimum of 120 frost free days to
reach maturity. Peanut Plants are unique in that the plants
flower above ground, but the pods develop below ground.
The peanuts can be harvested in late summer or early fall
when. These harvested peanuts are then taken to buying
stations where they are weighed, graded and inspected to
determine quality and value. The peanuts are then sent to
shelled and packaged.
After being packaged they are sent to peanut butter manufactures that roast them in
special ovens. After Roasting, the peanuts are rapidly cooled to retain color and oil. They then
go through a blanching machine that rubs the peanuts between rubber belts to remove the
outer skin. After splitting the kernels and removing the hearts, the peanuts are ground twice.
The first time they are ground alone and the second time they are ground with like salt,
sweetener and stabilizer which keeps the oil from separating.
To have a spread legally labeled as peanut butter it must contain a minimum of 90%
peanuts with no artificial sweeteners, colors or preservatives. Some brands may add natural
sweeteners. A natural peanut butter has no
stabilizer but may contain natural sweeteners and
salt. An unopened jar of peanut butter is good for
approximately six to nine months and natural peanut
butter is good for two to three months. Peanut
Butter is identified by the North American Industry
Classification System as 311911- Roasted Nuts and
Peanut Butter Manufacturing.
Peanut Varieties
There are three main varieties of peanuts grown in the United States are Virginia, Spanish, and
Runner. Virginia Peanuts are larger nuts often called cocktail nuts, that are ideal for
processing. They are grown mostly in North Carolina, South Carolina, Virginia, and Texas.
Spanish peanuts have a reddish-brown skin and out popular for candies and peanut butter.
They are primarily grown in Texas and Oklahoma. They have a high oil content compared to
other varieties. Runner peanuts are the most widely consumed and processed for peanut
butter. Runner flourishes in the
warm climate and sandy, welldrained soil in places like Georgia,
Alabama, Florida, Mississippi,
Texas and Oklahoma.
Prices
Poor growing conditions for peanuts in recent years has lead to an increase in peanut butter
prices. Prices have gone down slightly from a year ago but on average Peanut Butter still costs
still costs 30% more than it did in 2010. In 2011 there was a significant increase in prices
because of a particularly poor growing season in the Southern US. Production improved in 2012
but then fell again by 38% in 2013. An upgrowth of demand from China in 2012 may also have
contributed to these increasing prices, however this demand has since leveled off. Currently
Peanut Butter is about $2.71 per lb. (Ten Fastest, 2015).
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Buyer Power
The buying power of the Swedish savory snack market is moderate. Buyer power is increased in
Sweden because of the concentrated nature of the Swedish retail market. There are only a few
large grocery store chains that compete fiercely for business. Savory snacks are just one type of
food item that are sold by the majority of food retailers, this greatly increases buyer influence.
However, these retailers tend to stock the most popular brands among the consumers. This
strong branding effort weakens buyer power.
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Supplier Power
Supplier power in the Swedish savory snack market is assessed to be moderate. Suppliers for
this market include agricultural commodity traders, agricultural producers, and manufacturers
of ingredients, packaging, and factory automation equipment. Companies in this market usually
purchase their perishable ingredient directly from growers, these small companies have weak
supplier power. Other non-perishable items are usually provided by large multi-national
companies which have a significant amount of negotiating power which means they have high
supplier power.
New entrants
The likelihood of new entrants in the Swedish savory snack market is moderate. New entrants
will have to compete with large international companies with extensive product lines who are
already established in the country. Also, it will be challenging to gain access to distribution
channels and to persuade stores to
take a chance on an unproven brand
and product. However, there is a
steady rate of growth occurring in
this market which is encouraging for
new entrants.
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Threat of Substitutes
There is a strong threat from substitute products in the Swedish savory snack market. The
Swedish savory snack market has many possible substitutes including confectionery snacks,
beverages, and other goods that fit into the snack category. These products are similar in price,
which allows both the retailer and the consumer to change their snacking focus very cheaply.
There is also a growing awareness of healthy concerns associated with certain snack foods
which pushes consumers to purchase healthier substitutes.
Degree of rivalry
The degree of rivalry in the Swedish savory
snack market is moderate. The leading
competition in the Swedish savory snacks
market tend to be large, multinational
corporations. The rivalry between these
companies is increased because of
elements such as corporation similarity,
high operating and exit costs due to
specialized equipment, and low switching
cost for buyers. Rivalry is decreased by the
large product ranges that are offered by
these multinational corporations both
inside and outside of the savory snack market.
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Buyer Power
The primary sales channel for the savory snacks industry is through supermarkets and
hypermarkets. The buyers power in increased due to the concentrated environment of Italian
retail market. This market is dominated by several very large retailers. These retailers have a
high degree of bargaining power because
of their strong financial position. Market
players must compete for space on these
retailers shelves. Savory snacks are
generally not considered important to
buyers because of the wide variety of
savory snacks available at most food
retailers. However, these end consumers
are highly influenced by branding which
leads retailers to stock their shelves with
the most popular brands. Overall, buyer
power is moderate.
Supplier Power
Agricultural commodity traders, agricultural producers, and manufacturers of ingredients,
packaging, and factory automation equipment are suppliers found in the savory snack market.
These suppliers generally have weak bargaining power due to the fact that market players often
buy perishable, raw materials directly from the growers. These are generally small businesses
which means that these market players provide a large majority of their revenues. Conversely,
vegetable oils and grains are usually produced by large multinational commodity traders, who
have more negotiating power. While it is rare, some market players have begun to integrate
backwards or forwards which weakens suppliers power. This leads to an overall supplier power
that is moderate.
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New Entrants
The savory snack market is dominated by
large international companies with large
product portfolios and marketing and
advertising budgets. Due to this, new entrants
will have significant difficulties entering this
industry. However, new players have found
success by marketing artisanal production
techniques or unusual ingredients. Retail
space is limited and new entrants must
pursued stores to place their new product
where established brands already reside.
These established brands may also retaliate
against this new player through price
reductions and loss-leader promotions. The
overall likelihood of new entrants is moderate.
Threat of Substitutes
Savory snacks have many substitutes including other snack items such as confectionery, fruit,
and beverages. These substitutes have similar prices which allows retailers to easily switch their
focus toward them rather cheaply. For example, they may decide to stock more confectionary
than savory snacks, unless they have a contract with a particular market player. Consumers are
also drawn to healthier snack substitutes with the increased awareness of health issues. Other
substitutes may also be more appealing to retailers if they take up less space or less appealing if
they require refrigeration. In conclusion, there is a strong threat of substitutes.
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Degree of Rivalry
The leading competitors in Italys savory snacks market are usually large, often multinational,
diversified corporations. Nevertheless, there are artisanal companies that operate successfully
in market niches. This environment leads to a heightened sense of rivalry. The specialized
nature of manufacturing equipment makes creates high operating and exit costs. Market
players can also relatively easily increase output and buyers have very low switching costs.
These factors all increase rivalry further. However, this rivalry is lessened by the diversified
nature of the larger businesses. In conclusion, rivalry in the savor snacks market is moderate.
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Kalles
Another somewhat similar product in Sweden is the
Swedish made caviar paste called Kalles. The product was
launched in 1954 and contains smoked roe, oil, sugar,
spices, and salt, amongst other things. Kalles found
children loved the paste so much that they put a child on
the tube. Throughout the years since Kalles launch, it
became wildly popular in Sweden. They broadened the
product range by selling variations with things like dill,
cream cheese, eggs, bananas or shrimp.
Kalles is positioned to be a paste topping for bread,
crackers, and similar grain-based products. Its often show
partnered with hard boiled eggs, but sometimes people pair it with things like deli meats,
cheese, oatmeal, fruit, or sweets. It is also positioned as a product proud of its Swedish
heritage. Their website features videos showing people in other countries trying, and usually
not liking, Kalles. They promote themselves as a product with great taste and great history since
their logo and packaging remain largely unchanged from their launch in the 50s. Kalles also
prides themselves on natural and sustainable ingredients. The company is Marine Stewardship
Council (MSC) certified as of 2013 which means they use only seafood caught using sustainable
methods. As for price, one tube of Kalles is about $6 which makes it fair competition for a jar of
peanut butter, and it is available in most stores in Sweden.
They definitely have a competitive advantage in their strong national heritage and
unique taste. It may be difficult to compete head to head with Kalles due to the fact that the
product fills many of the same niches as peanut butter. At the same time, since Kalles offers
such unique combinations of caviar and other ingredients (cream cheese, chives, etc.), its
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possible Skippy could approach them about a collaboration product. Kalles could sell caviar
dotted with Skippy assuming the taste is pleasing. This could make it easier for Swedes to open
up to peanut butter with bread, crackers, and so on.
Lingonberry jam
An extremely popular condiment in Sweden is Lingonberry
jam. This jam has been a part of Scandinavian culture for a
long time, which gives them a significant competitive
advantage. Lingonberries were vital to earlier generations of
Scandinavians, for they could be kept for months at room
temperature simply by placing them in jars of water. In
modern Sweden, lingonberry jam is commonly used to
accompany a wide variety of dishes, from meatballs and
pancakes to porridge and black pudding. Felix and Hafi
Lingonberry Preserve are the two most popular brands in
Sweden.
Nutella
Skippy Peanut Butters most intense competition
within the Italian market is undoubtedly Ferreros
Nutella which is made in Italy. Nutella is a hazelnut
and cocoa spread that is beloved all over Europe as
a breakfast, snack, and dessert spread. The product
was created in the 1940s by Pietro Ferrero. As a
result of rationing during WWII, he was looking to
create a delicious alternative to chocolate paste.
Ferrero found he could make a tasty alternative by
using hazelnuts which were grown in Italy. The
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product was much cheaper than chocolate spreads as a result, and many people took to the
product right away. Today, Nutella mostly contains sugar and palm oil, more so than hazelnut.
Nutella maintains this position in worldwide markets today; it is a cheap, sweet spread
that can be used to turn practically anything into a snack. Nutella tried to position itself as a
healthy part of a balanced breakfast, but the company came under fire when customers
debated the actual healthy qualities. As a result, they had to change their position to market
Nutella as a great tasting complement to healthy breakfast items like whole grain toast. Today,
Nutella can be found in the vast majority of supermarkets worldwide. It was introduced to the
United States in the 80s, and a 26 oz. jar sells for about $6. This puts it in a market segment
quite competitive with peanut butter. Since the Italian brand instills some feelings of national
loyalty, it may be more effective to attempt a co-branding endeavor with Nutella. This would
help align Skippy with the popular brand, rather than engaging with it competitively.
Almond Paste
Almond paste is a common ingredient in many Italian cakes and pastries. This paste can be also
shaped into sculptures by pastry chefs, especially in Sicily. Odense is the most popular brand of
almond paste in Italy. Odense Almond Paste is manufactured in Denmark, using the finest
California almonds. They offer several varieties of almond paste including chocolate and
coconut.
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Ideal Customer
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Carmela Nico
Gender: Female
Age: 35
Marital Status: Married
Family size: one child
Occupation: teaches at kindergarten
Educational level: secondary school
Language: Italian
Carmela lives in Milan. She and her husband work mornings, but
her husbands parents take care of their son during the day. They
all live together so it can get a little hectic, but they find time to
relax as a family when they come together for dinner at night.
Cooking is one of Carmelas favorite pastimes. When they get a
night to relax, Carmela and her husband enjoy socializing and unwinding at restaurants and
bars.
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Chapter Discussions
Chapter 1 - Globalization Imperative
In the United States, Hormels Skippy Peanut Butter is the second most popular peanut butter
product behind leader Jif Peanut Butter. To increase sales of this product it is necessary for
Hormel to sell internationally. The United States peanut butter market in saturated with a wide
variety of products making it very difficult to improve market share. By selling Skippy in other
countries and introducing it to a new customer base, the product will find new life.
Skippy will have to carefully consider whether a global orientation or an international
orientation is more practical as Skippy looks to expand worldwide. Bloomberg Business points
out Skippy is the best-selling peanut butter in China. Their brand goes mostly unchanged from
the US labeling. Hormel, Skippys parent company, is the owner of Spam, and they chose to
market it as an upscale treat according to Bloomberg. Despite Skippys mostly unchanged
label, Hormel successfully encouraged the use of peanut butter as a meal ingredient rather
than just a snack spread.
Conversely, in the US, Skippy is mostly seen as a family snack food with a motto like
bring on the yippee. The front of their US website includes snack recipes and ways to make
snacking more fun. Should we maintain the precedent set in the US when we look to go
internationally? Hormels experience in China indicates we should look for a different approach.
Italy, especially, will require some careful consideration. The spread market in Italy is primarily
dominated by their native Nutella. It would probably be best if we could find a way to avoid
going head-to-head against a company with national ties.
To market Skippy Peanut Butter to foreign countries, like Italy and Sweden, It will be
most beneficial to apply the regular foreign marketing approach. Skippy Peanut Butter is not
currently being sold in these countries, and as such, our marketing efforts will be aimed at
introducing this new product into the market. This is not a temporary sale to these markets,
Skippy will have permanent production capacity allocated to this international demand. Our
long term goal will be to develop and grow our business in these countries and then expand to
others. Skippy will most likely start out as a regular foreign company and then develop into an
international company if things go well. Skippy will then ideally grow to become a fully global
company. At this point Skippy is simply testing the water in these new markets and is very
unlikely to set up sales subsidiaries and a production plant in these new markets. When a
company begins to export to other countries it is simply to gain extra profit for the company. If
they are successful in these foreign markets it is very possible that this foreign trade will
become a much bigger part of their business. When this happens it is time for them to
transition into an international company.
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and restrictions on what other countries could do with their goods. Since Italy is the primary
producer of Nutella, its possible they could attempt to put restrictions on peanut butter (either
keeping it restricted to their country or restricting the types of food pastes other countries can
produce). We could attempt to avoid this by partnering up with Nutella.
While peanut butter, itself, isnt likely to incite any legal issues, a potential partnership
with Nutella in Italy would require careful consideration. A joint venture would be mutually
beneficial for Italy and Europe as well as the United States. Bribes are also an issue that could
arise. Business-related gifts are not especially common in either Italy or Sweden, so it wouldnt
be much of an issue (although there is always the possibility of unofficial gifts). Since peanut
butter is a food product, we would have to carefully compare food production regulations
between the Sweden, Italy, and the U.S. As a result of the theory of jurisdiction, we would most
likely have to make sure our products adhere to the FDA regulations of food production.
However, we would also have to consider the regulations of the National Food Agency of
Sweden. Italy adheres to a different standard entirely since their food is regulated by the
European Food Safety Authority. As a result, peanut butter produced in Sweden may not
adhere to the standards of the EFSA. It will be difficult to make sure the peanut butter is
produced up to all standards involved to avoid legal action.
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Individualism
Individualism expresses the differences between the societys desires to maintain loyalty to
others. An individualistic society is more focused on the interests of the self, whereas a
collectivist society is more likely to focus on family and group interest.
Masculinity
Masculinity is not actually related to gender differences. A masculine society is one that focuses
more on competition, success, material rewards, and achievements. By contrast, a feminine
society revolves around cooperation, caring, quality of life for everyone, and modesty.
Uncertainty Avoidance
Uncertainty avoidance is a measure of how comfortable the society feels about uncertainty. A
high score in uncertainty avoidance would indicate that the society focuses more on trying to
control the future. These societies are more likely in enforce rigid laws. A low score is indicative
of a society which is much more comfortable with just letting the future happen.
Long Term Orientation (LTO)
Long term orientation captures how societies deal with the past, present, and future. A low
long term orientation society is more likely to focus on the present and prefers to maintain
tradition. High long term orientation is indicative of planning for the future sometimes to
extensive amounts. These societies emphasis preparation for the future in the workplace and
education.
Indulgence
Indulgence scores vary between gratification and splurging compared to restraint and
suppressed gratification. A high indulgence score means society is more likely to focus on
devoting time and resources to enjoyment and having fun. A low indulgence score means the
society is more concerned with regulation of needs compared to wants; these societies are
much more likely to show restraint when it comes to having fun or splurging.
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Swedes answered higher in not very proud and not proud at all. These numbers reflect that
Italians have higher national pride and this will strongly affect how Skippy peanut butter brand
will be viewed. A high amount of pride or nationalism is a major obstacle for a foreign company
which plans to begin selling in the host country.
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The Yippee Skippy campaign appeals to young children and the advertising of Skippy
reflects that with advertising efforts that very playful and youth focused. In Sweden and Italy,
our market research asks what kinds of elements draw you to want to purchase a food item
such as Skippy. For example, do Italian mothers look for quality packaging or packaging that will
excite their child? Another question is whether or not peanut butter would be considered a
kid product in those countries. In Singapore, Skippy peanut butter is a delicacy that is served
as part of entrees, and is not something that you would find in the averages childs lunchbox at
school. Our advertising has to reflect how Skippy peanut butter will be consumed in either Italy
or Sweden. If peanut butter is likely to be an occasionally enjoyed snack food in Sweden, then
that is how we need to promote it.
Combine strategy, design, and technology to create digital world class solutions.
Current Clients:
Tropicana
Ikea
Arla Foods
Friends Arena
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Pepsico
Amadori
Sogni dOro
Media Evaluation
Based on information collected regarding the media consumption patterns of both Italy and
Sweden, several media channels have been chosen for each country. These media channels will
allow Skippy effective access to its intended target audience. Listed below are the chosen
media channels as well as a possible specific media choices and reasons for choosing each of
them.
Italian Media Channels
Type of Media
Television:
Product Sampling:
Internet:
Radio:
Adwords/ SEO
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Aftonbladet
Magazine:
Elle: Sweden
Facebook.com
Television
TLC Sweden
Newspaper:
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Since both countries are part of the European Union, they tax importants similarly. Both
countries apply the Erga Omnes 12.8% CIF tariff (Figures B4 & B5). However, Sweden includes a
sampling fee to the tune of 1.75 SEK per 100kg of goods. Italy also includes a canned food
experimentation tax of an additional 0.2% CIF.
In Sweden, a 340g jar of peanut butter costs about 30.95 SEK which comes out to
approximately 0.091 SEK per gram. After taxes and shipping to Sweden, an imported jar of
Skippy comes out to about 58.28 SEK for 425g which is about 0.125 SEK per gram.
In Italy, Nutella is priced at a much steeper discount; a 630g jar of Nutella costs only
about 4.35 Euros or about 0.007 Euros per gram. After importing a jar of Skippy to italy, the
price comes out to about 5.75 Euros for 425g. This ends up cost 0.135 Euros per gram which
isnt nearly as competitive as the Swedish market price.
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Despite the tax situation sounding better in Italy, when comparing to local competition,
Sweden fairs much better as a potential market for the distribution of Skippy. To put it closer to
perspective, if the Skippy container was the same size as the local product (340g) it would cost
42.64 SEK compared to 30.95 SEK for the local offering. This is only a little more than 1 USD
different which is about equivalent to the price difference between a name brand offering and
a generic offering in the United States.
Final Decision
The final decision that has been made in regards to taking Skippy Peanut Butter internationally
is that the product will be distributed to Sweden. This decision has been made based on several
factors. One factor is Hormels long standing relationship with Tulip International, a food
product distribution center in Randers, Denmark. The Tulip International distribution center is
only a short distance from the shore of Sweden and has connections with many retailers in
Sweden. To introduce this product to the intended target market in Sweden, it will be necessary
to promote Skippy through the usage of product sampling upon release of the product at these
retailers. This will allow the people of Sweden the ability to try out, and fall in love with the
product before purchasing Skippy for the first time.
A second factor is that according to Hofstedes Analysis of Culture, Sweden rated high in
the factor of indulgence in comparison to that of Italy. Therefore, it can be concluded that
those in Sweden would be more likely to indulge in Skippy Peanut Butter. However, as
previously discussed, European countries such as Sweden do not generally accept GMOs, so the
product itself must be adapted to be accepted in the marketplace. Rather than selling Skippy as
a childhood treat, Skippy will be marketed to the Swedish people as a wholesome, natural, and
delicious snack food that is enjoyed by the whole family. This will be demonstrated through all
IMC efforts made throughout the country of Sweden.
38
Citations
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Appendix B: Pricing
Figure B1: Cubic Feet Calculator, CBM Calculator for Inches and Pounds
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