Overo Flower tea bag

Claudia Durand
Alejandra Roncagliolo
Omar Rueda
Stefany Salcedo
Table of Contents
1. Product description and
characteristics
2. Market description
3. Value proposition
4. External analysis
5. Objectives
6. Financial analysis
7. Marketing plan
8. Marketing mix
9. Channels of distribution
 Product

1 description

Product description and characteristics

What is OVERO FLOWER?

Origin: Ecuador,
Polinesia, Perú (La
Libertad)

Medical properties:
treatment of liver
problems,
gastrointestinal
disorders, among
others

Little known and not

very commercial.
Usually sold in
bigger bag
presentation.
 Product´s description and characteristics

100% Natural product Properties: Medicinal

virtue that helps purify
and reduce inflammation
of the liver.

Way of consumption:
place a tea bug in a cup Boxes of 50 filter sachets
with boiling wáter and each.
stand for 2 minutes.

Characteristics: Intense
yellow color, with a sui Weight of filter sachets: 8
generis odor, slightly bitter grams each
taste, smooth texture
 Market
description

2 Chosen country, consumer profile,

empathy map, competitors and strategies
 Chosen country: CHILE
01
Thanks to the Free Trade
Agreement between Peru and
Chile, the liberalization of 100% of
exports facilitates all trade
between both countries.
02
Health and wellness trends and the
willingness of Chilean customers to
pay more for a Premium product,
encouraging the launch of products
with greater benefits and different
attributes.
03
The increase in purchasing power
allows Chilean consumers to invest
more in health and education.
04
Growth of older population (60 at 01
older age).
Euromonitor (2018) notes that the
aging society in Chile will increase the
demand for tea that offers health 06 02
benefits and functional attributes.
05
According to Euromonitor (2018), in 2017
the size of the infusions market was
CHILE
estimated at 649.7 million dollars,
presenting a growth of 3.72% compared
to previous years and a weighted annual
growth of 1.053% for the period of 2012-
2017.
05 03
06
According to all these factors, chile 04
is chosen as our potential market.
Consumer profile

DEMOGRAPHIC BEHAVIORAL
• Age: Between 35+ • Expectation: Inclination
• Gender: Male and for health care, welfare
female and image. Concern
• Socioeconomic level: for good nutrition.
A and B

GEOGRAPHICAL PSYCHOGRAPHIC
• Country: Chile • Interests: In search of
• Points of sale: innovative products,
Supermarkets, health with superior benefits
food stores and quality.
(biomarkets), naturist • Preference for natural
fairs products, organic
CUSTOMER EMPATHY MAP
 Competitors

NESCAFÉ (25.6%) SUPREMO (11.6%) MILO (5.3%)

OUR DIRECT COMPETITOR IN THIS CASE WOULD BE “SUPREMO”.

LIPTON (4%) MILDRED (4%) MONTERREY (5.2%)

Source: EUROMONITOR (2018)

 Porter five forces
• Little money to enter the industry,
however, it may take time due to
• Medium-High competitive rivalry the great competition.
• Presence of 6-8 strong competitors • Not strong barriers to entry.
in the hot drinks market.
• Big companies, with experience in
the market, but their products don´t
offer the attributes our product Threat of New • Medium buyer power
does. Entrants • Diefferent supermarkets (3-5) but each
• No tea with same input (overo with big orders.
flower) • They already work with well-known
• Nestlé Chile SA : strong nationwide
Bargaining infusion brands in the market.
distribution across all retail channels
Competitive Power of • Big enterprises: Cencosud, TOTTUS,
rivarly Buyers Walmart Chile, entre otros.

• The power of suppliers is

• Low threat of substitues
medium low.
• Other medicinal plants for liver
• Many areas where this plant
diseases: boldo, romero, cúrcuma.
grows at the north of the
More difficult to obtain (not too
country (La Libertad, Bargaining Threat of
accessible).
Lambayeque): lots of Power of Substitute • Traditional overo flower: little marketed
suppliers with small sizes. Suppliers Products product and also difficult to obtain.
• Cost of changing supplier
• Other hot drinks dont offer same
would be relatively low.
properties.
Market niche Strategy

Adult and older Willing to buy

adult population premium products
of socioeconomic for their health
Small consumer levels A and B care
market with Preferences in
special consuming
requirements. healthy food and
beverages with
new attributes
 Competitive Advantages

Type of Competitive Advantage

Being Pursued
Lower Cost Differentiation

Overall Low-Cost Broad Differentiation  Our product offers certain

A Broad Cross-
properties and
section of Leadership Strategy Strategy
characteristics that are
Buyers unique in the infusions
Market Target

market
 Directed to a small group of
Best-Cost people with special
Provider Strategy requirements as it is the old
Overo population that presents
Flower tea liver problems and also
A Narrow Buyer bag people that takes care of
Segment(or their health and that are
Market Niche) Focused Low-Cost Focused Differentiation willing to pay a higher price
Strategy Strategy for a premium product.
Growth strategies

Our company will

sell a new product
to a new market.
Chile is a potential
market for our
product. However,
even though there
is a lot of
competition, our
product will offer
health benefits,
made from a
medicinal
plant/flower that is
only found in Peru.
Positioning Strategies
Customer Benefits
Natural and organic product for
people who has health
problems (liver).
Use
It is consumed at any time of
the year, and any time of the
day. Also can be use for
consumers who have stomach
pains.
Easier to prepare than
traditional overo flower infusion.
 Value

3 proposition
 Value proposition canvas

• Time Saving
• Easier to obtain (accessibility)
• More properties than usual teas
• No added sugar • Health benefits and
• Innovative flavor healthy lifestyles
• Reduce liver problems • Novelty
• Overo
• Functional utility.
flower tea
• Reduction of time
bag
when preparing
overo flower tea.
• Make the product
more accesible and
• Natural and easy to find.
Organic • Reduce/eliminate • Takes a long time to prepare de
traditional overo flower tea.
liver problems • Other infusions don´t have the
properties they are looking for
• Affordable Price • Same as other teas.
• Quality product • Difficult to find this medicinal herb
• No side effects
• Easier to prepare
 External
analysis

4 Current market, PEST, PIC, Hofstede

insights and Nation Brand
Current market landscape

F
e Conventional
The no use of chemicals and
% e nutritional value of our
O d product are what
F i differentiate us from our
C n competitors.
H g
E
R
M
I e
C s
A o
L u
S r
c
Organic
e
s
Nutritional Value Low to High
PEST analysis
 PIC (Product Innovation Charter)
PIC (Product Innovation Charter)
Background
Our Company recognize a high potential consumption of filters in Chile. This
country has a positive attitude of buying Peruvian products in the healthy
trend. Also it is well known for having one of the bigger PIB per capita in the
region. (15,346.45 USD).

Our Company select and process a medicinal plant and turn in into a filter,
FOCUS The added value we offer is an easy product to consume with potential benefits for
the final consumer.

Short Run: Make a good introduction in the Chilean Market.

GOALS-OBJECTIVES Long Run: Be considered as a TOM for our consumer target.

Care will be taken to check out all the process of selection of the
GUIDELINES products to offer the best products to our consumers in order to make a
difference with other companies that use and produce any kind of plant.
Hofstede Insights: Country comparison
Power distance

Organizational
arrangements show
taller pyramids and
The extent to which the less low degrees of
powerful members of institutions delegation. Status
and organizations within a Score symbols are used to Actions
country expect and accept that underline power
power is distributed unequally. differences

63 We have to
negotiate only with
the people that are
in the top of the
pyramids.

Definition CHILE
Uncertainty Avoidance
DEFINITION
The extent to which the
members of a culture feel
threatened by ambiguous or
unknown situations and have
created beliefs and institutions
that try to avoid these is
reflected in the score on
Uncertainty Avoidance.
SCORE
86
CHILE
These societies show a strong
need for rules and elaborate
legal systems in order to
structure life. Contrary to
general practice in other Latin
American countries, Chile
shows rather low corruption
indices
ACTIONS
Legal system in Chile is really
strict about the products that
arrives to this country so we
need to follow all the policies
or rules that allow us to sell
the product.
 Indulgence
Definition

This dimension is defined as the extent to which people try to control their desires and
impulses

Has a relatively Indulgent orientation. People in societies classified by a high

Chile

Score: 68 score in Indulgence generally exhibit a willingness to realize their impulses and
desires with regard to enjoying life and having fun.
Actions

Chile is well known for having a price-taker consumer.

 Nation Brand: Peru Brand

• The Peru Brand is a solid

commitment to the • Achieves greater recall
country. among key audiences.
• It promotes national • Non-traditional
What is development and growth Advantages products are unique
and unusual, but above
it? through the promotion of
all they are recognized
goods and services to
the world market. for their excellent
• The consolidation of the quality.
image of Peru is the task • Generates a positive
of all Peruvians. effect on the image of
Is a tool that seeks to boost • Drives the different the company or
tourism, exports and attract commercial sectors. It is product that carries it.
investment. Effectively an important advantage
transmits the value compared to other
proposition of our country. countries.

• It is based on the Benefits for

Identity "country image" and the
communicates it through enterprises
a symbol that identifies it
and differentiates it from
others. Also, Peru's
brand communication
campaigns have reaped
important national and
international
achievements.
 Objectives

5 Quantitative and qualitative

Objectives

Quantitative
• Start the sales with a minimum of 70,000 boxes in a year.
• Achieve a stable growth of 10% in first 5 years.
• Reach at least 2% of the market on the first 5 years.

Qualitative
• Be a TOM Company for consumers in the next 10 years.
• Increase the quality of our product mainly in the presentation.
 Financial
Analysis

6
Overo flower tea bags financial analysis

OVERO FLOWER TEA BAGS

The market: stable  growth around 29.22% during the last

5 years.

Product life: 5 years

List Price: $8
Distributor discounts: $3
Net to Factory: $5
Other discounts:
Promotion:$ 0.5
Quantity : $ 1
Average dollars per unit sold: $4
Production costs:
Explanation of any unique costing procedures being used:
COST OF PRODUCTION
PRICE USD QUANTITY
OVERO FLOWER 21.28 1 KG
PROCESS (grinding, packaging and labeling) 20 13 BOXES
PRICE PER BOX $3.18
Financial Projection
Operational costs
Our operational
costs consists on
selling and
administrative
expenses.

Selling Expenses 2018

Day Monthly Yearly

Monthly: 20% of Salaries and wages 130.2 2 604 31 248

the income in
marketing Marketing 762.08 15 241.67 182 900

Total 892.28 17 845.67 214 148

General and Administrative Expenses 2018

Administrative Day Monthly Yearly
and general
costs we have Salaries and wages 374.82 7 496.33 89 956
basically salaries,
benefits and Employee Benefits 207. 806 4 156.12 49 873.43
offices expenses.
Office Supplies 46.30 925.83 11 110

Other Operating 1 911.13 38 222.54 458 670.46

1st year: The
expenses for office Expenses
supplies:
computers, a Total 2 528.38 50 567.50 605 609.89
photocopier, a
coffee machine,
desks, chairs,
shelves, binders,
folders, etc.
 Marketing plan

7
Marketing plan

The marketing plan would be based on a Digital Marketing Strategy

• Introduce our product
First phase: • Use of informational in creatively videos that Write down all the
advertising in social reveals the benefits of benefits the product
Awareness of product networks. this medicinal plant, and offers in its packaging.
its history and origin.

• On the website and

Second phase: Create • Impact clients so that
• Strive to satisfy the
social networks spaces
client, who
positive experiences they become opinion
simultaneously becomes
will be provided so that
that generate leaders that our product
a consumer an a opinion
consumers can tell their
and company needs. experience and qualify
customer satisfaction leader of the service.
the service.

Third phase:
• Strengthening of the • Socialization of the • Search for customer
Realization of the brand product satisfaction
objectives
 Marketing mix

8
Marketing mix

Overo Flower Tea Bag

Chilean market
High quality product, because
Through Supermarkets &
its above the standard it’s a PRODUCT PLACE Convenience stores, until it
selected product, and pick all
reaches the final consumer
kind of raw material.

4P´s

Discounts by season, around

$0.5.
$ 9 per box (LIST PRICE)
Promotions for volume.
$5.5 per box to distributors PRICE PROMOTION
Publicity through internet,
(with $3.5 of discount)
social networks, and panel
advertising.
 Channels of
distribution

9
$3.18 PRODUCER

42.18% $5.5

Modern channel retailer:

- Supermarkets 31.25%
60%
- Bio markets

FINAL CONSUMER $8
Intermediary Profit

PRODUCERS
MODERN CHANNELS RETAILERS
Cost:
$3.18 Price to supermarkets &
FINAL CONSUMER
Conveniences Stores
Price with discounts: List Price:
MARGIN: $5.5
To distributors: $8
42.18% MARGIN:
To final consumers:
31.25%

39
Distribution Channel

Modern Channel Retailer

Why? Because in the process we can focus on the 2 intermediaries, the wholesalers and the convenience store

¿Why we need intermediaries? Because the chilean market it is very competitive in the sector of filters and
we need to find an easy access to this market at the beginining

This channel is one of the most used channels for products wich demand is really big and the
sellers dont have the logistics to sell it in the market

40
 Next step

10
Next step fot the NPD

More Presence of
combinations our product in
Offer new of medicinal More the other cities
flavors plants to bring presentations of Chile, and
healthy other potential
benefits. countries
THANK YOU