Kraft Easy Mac Cups

Kraft Macaroni and Cheese

Kraft Known as Kraft Dinner in Canada, Kraft Mac and Cheese in the United States, and Cheesey Pasta in the United Kingdom, this product is a non-perishable, packaged dry macaroni and cheese. It debuted during the Depression, in 1937. It was a huge hit during World War 2 and over 50 million boxes were sold because of how affordable and convenient the product was. In 2006, “Easy Mac” cups were introduced. These reduced preparation time to 3.5 minutes, much to the delight of college students.

For reasons that aren’t fully clear, in 2007, the sales of Kraft’s “Easy Mac” cups went up an astounding 50% (History).

Kraft’s Easy Mac cups boast 6 grams of protein per serving and meet 10-20% of the daily recommended calcium value. They contain no artificial flavors or preservatives and now claim to have reduced saturated fats from the original recipe (Kraft).

There are currently 22 different ‘Blue Box’ varieties including buffalo cheddar, garlic and herb alfredo, organic white cheddar and veggie pasta. Approximately 1 million boxes sell every single day (Things).

Kraft’s Easy Mac cups boast 6 grams of protein per serving and meet 10-20% of the daily recommended calcium value. They contain no artificial flavors or preservatives and now claim to have reduced saturated fats from the original recipe (Kraft).

There are currently 22 different ‘Blue Box’ varieties including buffalo cheddar, garlic and herb alfredo, organic white cheddar and veggie pasta. Approximately 1 million boxes sell every single day (Things).

Target Market

Info Scout´s data, which is collected from 1 in every 500 shopping trips in America, shows that a Kraft Easy Mac consumer is likely to be upper income and lower middle age, however, these same consumers were recorded as paying with cash or food stamps (InfoScout). It is typical for an upper income family to use Easy Mac as a food of convenience. This information could be considered conflicting, because an upper income family would not need food stamps and would most likely pay with a credit card.

The target audience in Spain should be similar while keeping in mind the preferences of the same demographic in another culture. In Spanish culture, food quality is likely to increase and be healthier as socioeconomic status increases (Darmon, Drewnowski). Keeping cultural preferences in mind, our target audience in Spain would be a mix between lower and middle income families and individuals. Easy Mac would most likely become an inexpensive product for lower income families

Marketing Mix

Product

Kraft macaroni and cheese Easy Mac Cups are individual 2.05 oz servings that are microwavable. All you need to do is add water and cook them in the microwave for about 3.5 minutes. You can choose between the original flavor or white cheddar as well as Star Wars, Finding Dory and SpongeBob macaroni shapes for our younger consumers.

Price

The current price for Kraft’s Easy Mac Cups in the United States vary depending on the quantity. For a 4 pack, they resale at $3.98, the package with 8 cups sells for $7.48, and the 12 cups one can be purchases for $10.79 at Costco.

When we introduce Kraft’s Easy Mac in Spain, we will set our prices similar to those of the United States. The 4 cups will have a price of 3.20 Euros, the 8 cups will be priced at 7 Euros and the 12 cups will be 10 euros. This is a reasonable price; each cup is priced under a euro.

El Corte Ingles currently only carries one brand of macaroni and cheese, Yatekomo World Tour. Each cup is sold individually, they are 2.8 oz and has a price of 1.59 euros (“YATEKOMO”. This company will be our main competitor in Spain.

Place

In the United States you can find Kraft Easy Mac almost everywhere, grocery stores, convenience stores, gas stations, and small markets.

We want Easy Mac to be as easily found in Spain as it is in the U.S. Kraft Easy Mac will be available in chain supermarkets such as Dia, Supersol, Mas and El Corte Ingles. At these locations our product will be easily available for our target market since you can find one of these stores almost in every corner of Spain.

Promotion

In the U.S. Kraft has spent quite a few millions in their marketing campaign, especially when they changed their formula to remove artificial flavors, preservatives and synthetic colors. They developed a marketing campaign with various commercials to go with the theme “It’s Changed. But it hasn’t”.  Apart from commercials, their marketing campaign also include advertisements in publications such as Entertainment Weekly and People magazines (Wohl).

Since our main consumers in Spain will be low income families with small kids, we will focus our marketing campaign on print adds that can be placed on the grocery stores. We will also do short commercials that emphasize the kid’s and parent’s approval for Kraft Easy Mac. On these commercials we will include the Easy Mac cups that have cartoon shaped macaroni like SpongeBob and Finding Dory. These are sure to get the attention of the kids and their parents as well since they have all-natural ingredients and are ready in less than 5 minutes for those who have a busy lifestyle.

Anticipated Success in the Spain Market

One of the key contributors to Kraft Easy Mac in Spain would be the lack of competition in the instant pasta market. The only competitor for Kraft Easy Mac is Yatekomo and it is sold in Corte Ingles. This gives Kraft Easy Mac an advantage since there isn’t much competition in the market. Another key contributor to Kraft Easy Mac anticipated success in the Spanish market is that Spaniards love cheese in their diet and enjoy a good pasta dish. Kraft Easy Mac would cover both cravings and would present simplicity in preparing a delicious dish.

Potential Risk

Though offering a satisfying and simplict pasta for Spaniards, Kraft Easy Mac would present concerns. Spaniards might question if Kraft Easy Mac is an unhealthy alternative to conventional pasta. Another question that might be presented in Spaniards’ minds would be if Kraft Easy Mac uses real cheese. Another risk might be that spaniard might be turned away by the lack fresh ingredients presented in Kraft Easy Mac.

Kraft Easy Mac is the solution to parents that need to provide a delicious meal in a moment that requires efficiency. With this in mind, Kraft would be presenting a solution that does not stir too far from a typical Spanish dish, while keeping a comfortable meal at an affordable price.

Conclusion

In Easy Mac, Kraft offers a quick meal packed with protein and calcium for all ages and all socio-economic classes. Given Spanish dietary preferences, the market’s lack of similar products, and the steady demand for affordable and easy-to-prepare food, we believe that Mac and Cheese will see great success in Spain. The Kraft Heinz company is already present and recognized in the EU market and with the right marketing strategies, the product will stand far above Yatekomo, it’s only competitor in Spain. The quality of the product and our ability to price it low will ensure that Easy Mac creates its own demand and flies off the supermarket shelves.

Sources

Nicole Darmon, Adam Drewnowski; Does social class predict diet quality?, The American Journal of Clinical Nutrition, Volume 87, Issue 5, 1 May 2008, Pages 1107–1117, https://doi.org/10.1093/ajcn/87.5.1107

“Kraft Macaroni & Cheese: A History.” Tribunedigital-Chicagotribune, 14 Aug. 2010, articles.chicagotribune.com/2010-08-14/business/ct-biz-0815-mac-side2-20100814_1_kraft-macaroni-cheese-kraft-s-macaroni-cheddar.

Kraft Mac & Cheese, www.kraftmacandcheese.com/faq.

“Things You Didn’t Know about Kraft Macaroni & Cheese.” Fox News, FOX News Network, 17 Dec. 2014, www.foxnews.com/food-drink/2014/12/17/things-didnt-know-about-kraft-macaroni-cheese.html.

“YATEKOMO World Tour Macaroni & Cheese Cup 97 g.” World Tour Macaroni & Cheese Cup 97 g · YATEKOMO · Supermercado El Corte Inglés, http://www.elcorteingles.es/supermarket/0110118036001362-yatekomo-world-tour-macaroni-and-cheese-cup-97-g/.

Wohl., Jessica, et al. “Kraft to Promote Macaroni and Cheese Change Made Months Ago.” Ad Age, 7 Mar. 2016, adage.com/article/cmo-strategy/kraft-promote-macaroni-cheese-made-months-ago/302972/.

 

Halo Top: Healthy, Delicious Ice Cream

Halo Top Creamery 

Halo Top ice cream, better known as “guilt-free” ice cream by CEO Justin Woolverton, is the trendiest brand of ice cream to hit the American market since 2012 (Time Staff). It’s an ice cream company that sells by the pint, guaranteeing a maximum of 360 calories at a retail price of $5. Halo Top takes pride in providing delicious ice cream while only having a third of the calories and more protein than trailing brands Häagan-Dazs and Ben & Jerry’s (Halo Top). They offer 17 dairy and dairy-free options to appeal to a wider audience. With creative flavors like “toasted coconut” and “mochi green tea”, Halo Top has created a loyal consumer following in America, becoming the best-selling pint of ice cream in 2017 (Business Wire) and increasing sales by 2,500% in the same year (Time Staff).

Halo Top claims its secret weapon is organic stevia, an alternative sweetener that comes from a plant in Paraguay (Halo Top), making their ice cream a healthy option for diet conscious consumers (Time Staff). With a popular product and effective rhetoric, Halo Top is projected to make a record breaking sales year in 2018. In addition, its increasing popularity is quickly spreading to other markets, such as Australia, Mexico, Singapore, and the United Kingdom, encouraging us to believe that Halo Top would sell well in Spain (Halo Top).

Target Market

Halo Top in Spain will seek to target the same demographic that it targets in the United States. Halo Top’s success stems from its well orchestrated marketing strategy which involves the use of social media (particularly Instagram), partnerships, influencer endorsements, and word of mouth. This strategy clearly targets millennials. Furthermore, what sets Halo Top apart is its ability to appeal to health conscious consumers. This ability comes from its high-protein, low-calorie contents which help create the “Guilt free” Ice-cream image (Dua).

In recent years, there has been an overwhelming increase in health and sustainability awareness among Spaniards. (Health) This has led to a number of healthy food products being created and marketed to Spaniards to meet the new demand for healthy diets. We believe that Halo Top fits in as one of those healthy food products created as an alternative to traditional ice-cream which is now viewed in a negative light by calorie conscious consumers.  

In essence, we would primarily seek to target the Spanish youth, between the ages of 15 and 35, as this audience would be the most efficient to reach out to with social media marketing, which is Halo Top’s forte. Additionally, millennials tend to be more concerned with calorie intake and Halo Top’s low calorie ice-cream will be more appealing to them.

 

Marketing Mix

Product

In the US, Halo Top ice cream is available in a classic pint with the iconic gold ring “halo” lid. The brand promises 25 flavors that contain no more than 280-360 calories and 24 grams of per paint (Astorino), with the option of 14 of their flavors being dairy-free (Halo Top).  

In Spain, Halo Top ice cream will be available in pints in the same manner as in the US. It will also be available in the creamier form of gelato while maintaining all the health benefits that come with Halo Top’s pint ice cream.  

Price

Currently in the US, a Halo Top pint of ice cream can average between $4.89 to $5 depending on where the pint is purchased (Calderone). In Spain, Halo Top ice cream prices will be projected in euros, Halo Top ice cream will be selling cones between 2.5 to 7 euros. The pints will have a price of  3.50 to 5 euros depending on the flavor.  

Halo Top will be utilizing the pricing strategy of penetration pricing, Halo Top will be offering a premium and healthy alternative to traditional ice cream and will be entering a competitive market. Halo Top will need to drive away attention from its competitors (Maguire). The discount on Halo Top ice cream will be provided through social media channels like Instagram and Facebook, or given through promotions at grocery stores and individual retailers.

Place

Halo Top ice cream (in the US) is currently available in retails such as Whole Foods, Tom Thumb, and other retail stores (Halo Top), as well as online through Amazon and other retail websites.

Similar to the US, Halo Top ice cream will be available in supermarkets, such as Mercadona, Lidl, SuperCo, and Aldi. As popularity grows, Halo Top will develop individual shops to sell their multiple flavors in gelato form.

Promotion

Like US millennials, Spanish millennials have made social media one of their main channels of communication and information. With this knowledge, Halo Top will be utilizing Facebook and Instagram to promote their product to millennials. This will produce attention to their target audience while anticipating the chain reaction of WOM, and will be more effective and less costly than a spot on Spanish television.

Anticipated Success in Spain

1. Delicious, Healthy Ice Cream Reasonably Priced

Almost in every corner in Spain you can find a gelato shop, where you can get a very tasty cone of ice cream or cup for about 2.5-7 Euros depending on the size you get. If you’re a tourist, you wouldn’t mind paying this much for a couple of scoops, however for the locals, this might be a little too pricey.

For that reason, Halo Top Creamery has great potential to be successful in Spain, for around the same price, the locals in Spain will be able to buy a pint of ice cream to satisfy their craving. They will also be able to feel guilt free when eating ice cream since Halo Top is very low in calories and has a wide variety of creative flavors that are healthier for you than other competitors.

2. Meeting Market Demand

Halo Top also meets the demands of consumers, in 2015, approximately 68% of consumers in Spain were interested in non-dairy ice cream. Halo Top currently has various flavors that are dairy free so consumers who are lactose intolerance are still able to purchase and enjoy Halo Top ice cream.

Potential Risk

One risk Halo Top might encounter when entering the market in Spain is that there already are very well known and established ice cream companies in the market such as Häagen-Dazs and Grupo Alacant. However, with Halo Tops creative flavors and low calories per pint, we are positive we will gain a part of the market share and get loyal customers once we increase our brand awareness through our marketing mix.

Conclusion

Even with established competition in Spain, Halo Top offers something that the other brands don’t: a healthy, versatile, and reasonably priced alternative. The success of Halo Top in America and other developed countries through proper advertising and the use of social media gives us confidence that this particular brand of ice cream has a high chance of doing well in Spain amongst our target market. With several factors to consider, it is important that the introduction of Halo Top to Spain is executed with care, considering placement of Halo Top in stores and location of Halo Top shops in neighborhoods.

Sources

Astorino, Dominique. Popsugar.com, POPSUGAR.Fitness, 19 Feb. 2018. Accessed 25 Apr.

2018.

Business Wire. “Halo Top Creamery is Now the Best-Selling Pint of Ice Cream in the United States”. Business Wire Inc. 31 July 2017. https://www.businesswire.com/news/home/20170731005214/en/Halo-Top-Creamery-Best-Selling-Pint-Ice-Cream

Calderone, Ana. PeopleExplains, Peoplefood, 1 Aug. 2017. Accessed 25 Apr. 2018.

Halo Top, Peck & Company, 2018. Accessed 25 Apr. 2018.

Halo Top. “Us vs. Them”. Eden Creamery LLC. 2018. https://www.halotop.com/us-vs-them/

Magurie, April. Intuit Quickbooks, Peoplefood, 2017. Accessed 25 Apr. 2018.

Time Staff. “The 25 Best Inventions of 2017”. Time Inc. 1 December 2017. http://time.com/5023212/best-inventions-of-2017/

“Two-Thirds of German Ice Cream Consumers Are Interested in Non-Dairy Alternatives.” Mintel, www.mintel.com/press-centre/food-and-drink/two-thirds-of-german-ice-cream-consumers-are-interested-in-non-dairy-alternatives.

Dua, Tanya. “Halo Top Is Now the Most Popular Pint of Ice-Cream in America – Here’s How It Did It.” Business Insider, Business Insider, 2 Aug. 2017, www.businessinsider.com/how-last-summers-trendiest-ice-cream-brand-halo-top-is-expanding-beyond-its-social-media-roots-to-go-national-2017-7.

Health and Wellness in Spain, www.euromonitor.com/health-and-wellness-in-spain/report.

Say Hello to Tinto de Verano Millennials

Sandevid

Sandevid is a Spanish company founded in 1980, who produces various types of mixed drinks that include wine. They have Familia Clasico and Familia Limon which are better known as Tinto De Verano, this drink is half red wine and half lemon or orange soda. These Sandevid products are aimed to consumers who are looking for an alternative drink rather than just wine. Familia Naranja and Familia Sangria are refreshing drinks with natural fruits. The last product that Sandevid offers is Familia Rebujito, a refreshing typical drink from Andalucía aimed at young adults who enjoy apple wine.

Target Market for Sandevid

Tinto de Verano’s primary U.S. target Segment will be US Millennial’s which have demonstrated to be a main contributor in the increasing percentage of total drinking age-population that “went from 7.9% to 13.9%” (Chew). Drinking a total of about 159.6 million cases of wine in 2015 amounting to 42% of all wine consumption in the US (Chew). These numbers average about three glasses of wine per sitting (Chew).

Sandevid’s targeted Millennials are composed of both Males and Females, born from 1980 to 1997. A total of 34% of all millennials living at home with approximatly 61.4% with at least a bachelor’s degree, earning wages that average about $37,000 annually (Wilson). With a 55.8% majority having a white ethnic background (Frey). Comprising a 23% of the total US population and with the perspective of viewing “wine as ‘relaxed and happy’ ” but willing to try new drinks (Knorp). Since millennials yearly salary isn’t that much, they will be the perfect consumer for Sandevid in the U.S. 

Millennial’s since 2010 to 2015, have fervently been moving to metropolitan areas across the U.S. such as Austin, Texas, Pittsburgh and Pennsylvania, but have avoided major cities such as New York City or Washington D.C. due to “increasing real-estate prices and stiff job competition” (Abadi).

Marketing Mix

In Spain

Sandevid Tinto de Verano can be found very easily in Spain. It’s available for purchase in supermercados, convenience stores as well as small family owned mercados at a retail price of 1.55 Euros.

In terms of promotion, Sandevid has a very active social media presence where they had a promotion called Vuela Sin Sorteos to attract the attention of young consumers who like to travel and have fun. Through this promotion, the consumer had to purchase six bottles of 1.5L of any Sandevid product and collect the codes on each bottle. Then register them on their website and had access to purchase flights in Europe or Morocco for only 44 Euros round trip for two persons. 

In the United States

We will use the 4 P’s of marketing to analyse our marketing mix and to discover what Tinto de Verano can do for our audience. Tinto de Verano is a tangible product that is made of red wine and gaseosa, a low sugar carbonated lemonade; the drink can be homemade or store bought from the Sandevid brand (Tripadvisor). It translates in English to the red wine of Summer. Many attribute its name to its refreshing nature during the heat of summer, however, its consumption is not limited to that of summer.

There is no common price of homemade tinto de verano, however many sources agree that it is very cheap to make (Bogaard). The price of bottled Sandevid tinto de verano is around 1,85 dollars, therefore this product is very affordable (El Corte Ingles). In fact, this drink it much more affordable than other types of alcohol in America. For example, the price of a refreshing summer Budweiser, which is one of our competitors, can be as expensive as 4,00 dollars (Budweiser). Tariffs would need to be considered, however the price is well below the prices of most other alternatives. 

When it enters the U.S. market, Sandevid will be available in convenience stores, gas stations as well as grocery stores. Sandevid’s Tinto de verano is a cheap product which needs to be promoted in common places like grocery stores on the ends of aisles, so that shoppers’ attentions are grabbed early on. In the initial stages of introduction in the American market, Sandevid will need to invest in a lot of advertising for our product because only Spaniards know what tinto de verano is at the present. One of our main focus will be social media marketing and getting influencers to endorse Sandevid Tinto de Verano to increase our brand awareness. Branding will need to be appropriately communicated through the product’s promotion. If the initial introduction of the drink is not properly executed, it will be hard for the drink to be introduced in the future as well.

 

Anticipated Success in the U.S. Market

1)    Growing US wine industry.

Statistics for 2017 US wine sales show steady growth, but with increasing competition from imports and other beverages. It is widely expected that 2018 will continue to see steady growth pattern of previous years, at around a 2% increase in US wine sales value. According to Wines & Vines and BW166 (2018), total US wine sales were $62.7 billion in 2017, with $41.8 billion in sales from domestic wine and $20.9 billion from imports. Thus, we believe that growing popularity of wine in the United States will translate into a favorable environment for the introduction of wine-based beverages. (Overview)

2)    Demand for cold, light alcoholic beverages in warm states.

In warmer states such as Florida and Arizona, casual consumption of cold, light alcoholic drinks such as beer and hard iced tea is very common. We believe that Tinto de Verano, which is popular as a drink for the hot Spanish summers, would be a perfect fit for US states with warm climates.

3)    Lack of similar product in the market.

Bottled wine coolers are virtually nonexistent in the US market. Much of the light alcoholic beverage market is covered by beer. We believe that Tinto de Verano will be a success with consumers who do not like beer as we will be providing a refreshing alternative like no other.

4)    Relatively low production cost, ability to maintain low prices.

Tinto de Verano has a very simple recipe. (1-part flavored soda and 1-part red wine) It is thus very easy and cost-efficient to make as opposed to beer and pre-mixed drinks like Smirnoff Ice. A low production cost will enable us to price the bottles lower than most competing light alcoholic beverages. This will help attract the young demographic, particularly students above the age of 21.

Potential Risks we will Overcome

1)    Low alcohol content may not adhere to target audience needs.

Some of the younger millennials, especially those in college, are likely to prefer drinks that will cause intoxication quicker. Tinto de Verano has a very low alcohol content and will not fulfill this purpose. However, the low cost might certainly help make it attractive for these millennials to buy higher quantities.

2)    Difficulty in making male consumers look away from beer.

As far as light alcoholic beverages go, beer is by far the most popular in the United States. In fact, beer is the only alcoholic beverage to be among the top 5 most popular drinks in the United States, where it is outranked only by water, soda and coffee (Top). The goal thus would certainly not be to replace beer, but instead to provide the best alternative. Especially for female consumers who tend not to like beer as much.

Conclusion:

Sandevid, a well-known company in Spain that specializes in Tinto de Verano is a product that we believe has a great potential to be successful in the U.S. market. When we introduce Tinto de Verano in the U.S. our main target audience will be millennials, both men and females ages 21 and on. Sandevid Tinto de Verano will be available in convenience stores, gas stations as well as supermarkets. Since our main target market are millennials, our promotion will consist of social media marketing as well as ads on the stores to increase impulse purchases. After analyzing the market in the U.S. and the various reasons for anticipated success, we believe expanding Sandevid into international markets will be a rewarding venture.

Sources

Abadi, Mark. Forget New York – millennials are flocking to these 11 US cities in droves, Business

Insiders, 22 Dec. 2017,www.businessinsider.com/cities-millennials-are-moving-to-2017

11. Accessed 2 Apr. 2018.

Budweiser. “Budweiser.” Budweiser | The Beer Store, Anheuser-Busch, n.d., www.thebeerstore.ca/beers/budweiser.

Cecilia Bogaard. “Tinto De Verano.” Tertulia Andaluza, Tertulia Andaluza, n.d., www.tertuliaandaluza.com/cultura/gastronomia/receta-tinto-de-verano/?lang=en.

Chew, Jonathan. Fortune, fortune.com/2016/02/17/millennials-wine-council-study/. Accessed 2 Apr. 2018.

El Corte Ingles. “SANDEVID Tinto De Verano Sabor Limón Botella 1,5 l.” Tinto De Verano Sabor Limón Botella 1,5 l, Supermercado El Corte Inglés, El Corte Ingles, n.d., www.elcorteingles.es/supermercado/0110118628200190-sandevid-tinto-de-verano-sabor-limon-botella-15-l/.

Frey, William H. The Avenue; Diversity Defines the Millennial Generation, Brookings, 28 June

2016,https://www.brookings.edu/blog/the-avenue/2016/06/28/diversity-defines-the-mill

nnial-generation/. Accessed 2 Apr. 2018.

Goldman Sachs, 2018. Accessed 2 Apr. 2018. Path:

http://www.goldmansachs.com/ourthinking/pages/millennials/.

Knorp, Alison. Liquor.com, Apr. 2017. Accessed 2 Apr. 2018. Path:

https://www.liquor.com/articles/new-study-reveals-what millennials-are

drinking/#gs.cA_es54.

TripAdvisor. “The Locals Drink ‘Tinto De Verano’ Instead of ‘Sangría’ – Madrid Forum.” TripAdvisor, TripAdvisor, 18 June 2011, www.tripadvisor.com/ShowTopic-g187514-i126-k4598199-The_locals_drink_tinto_de_verano_instead_of_sangria-Madrid.html.

Wilson, Reid. More millennials living with parents, The Hill, 24 Apr. 2017. Accessed 2 Apr.

2018.Path:http://thehill.com/homenews/state-watch/330279-more-millennials-living-withparents.

“Overview of the US Wine Industry in 2018: Stable Growth Forecasted – Based on 2017 Stats.” Dr. Liz Thach, MW, 19 Mar. 2018, www.lizthachmw.com/2018/01/31/overview-of-the-us-wine-industry-in-2018-stable-growth-forecasted-based-on-2017-stats/.

“The Top 5 Most Popular Drinks in the U.S.” Top5, 6 Nov. 2017, www.top5.com/the-top-5-most-popular-drinks-in-the-us/.

Cruz Campos in the U.S. Market

Cruzcampo History

Cruzcampo is one of the oldest beers in Spain. It is considered the first Spanish beer in terms of sales volume. It was founded in 1904 by two brothers named Roberto and Tomás Osborne Güezala. It originated in Seville, taking its name from the historic Humilladero de la Cruz del Campo, located in what were then the fields surrounding Seville (Cruzcampo). 

Cruzcampo is the best-selling beer in Spain, and one of the best-selling brands in all of Europe. It has been owned by Heineken Brands since the year 1991. Cruzcampo makes several different types of beer, the most popular of which are – Pilsner lager (4.8%), Light (2.4%), Shandy (0.9%), Cruzcampo Gran Reserva (6.4%), and Sin (0.9%).2 (Andalucian) . The classic Cruzcampo is a lager beer of the Pilsner type with an alcohol volume of 4.8%. It has a soft taste with a slightly fruity aroma and moderate bitterness. Its unique character is attributed to the yeast that is used in its production (Ficha).

Target Market

According to a 2012 Gallup poll, men tend to drink more alcohol than women. Men age 18 to 49 drink the most, and within that age group, 55% of men prefer beer (Berman). Overall, Caucasian men in the United States are the greatest consumers of beer. In regard to states, The Beer Institute reported that New Hampshire leads the country in beer consumption per capital. Along with North Dakota, Montana, South Dakota and Wisconsin (Berman).

When we introduce Cruzcampo into the U.S. we will analyze these statistics to narrow our target market. Our main consumer audience will be lower to middle income men age 21 to 49 who enjoy drinking beer both in social events and sporting events. Since the majority of the southern states have higher beer consumption per capital, targeting our audience in these states will be one of our priorities. This will allow us to penetrate the market and increase our brand awareness at a fast pace. With our marketing tactics, we will aim to create a brand image to our consumers in the U.S. similar to how the Spaniards perceive Cruzcampo.   

Our main competitor in the U.S. is Bud Light, their target market consists of lower income Hispanics, in particular those older in age (Bud). As we enter the market, we will keep on analyzing Bud Lights consumers as a form of reference to ours.

Marketing Mix for Cruzcampo

Product

Cruzcampo is the beloved Andalucian beer. Conducted surveys have demonstrated that the top five factors that the market segment considers the most when purchasing beer are; taste, price, style of beer (characteristics of the beer itself), Brewery that produces it, and if it is available in a bottle (“Drink”). Cruzcampo covers all these considerations, it’s ingredients consist of barley malt, it is backed by Heineken (its parent company), it is available in blonde or dark, has similar price to it’s competitors, and it comes in a classic brown bottle.

Chart from: https://www.surveymonkey.com/curiosity/what-kind-beer-people-like/

Place

Cruzcampo, like its competitor Bud Light, will widely be available in major super markets such as Walmart, Kroger, and Target. It will also be available in convenience stores like gas stations and liquor stores. In order to target our consumers who enjoy watching sports and drinking beer, Cruzcampo will also be made available to local sports bars and regular bars across the Southern States. The company can then expand to different bars around the area and in the US (depending on Cruzcampo’s success in the local bar scene).

Price

Since price is one of the main determinants regarding a purchase, Cruzcampo will be following a “Pricing for Market Penetration” strategy to attract consumers and increase awareness of Cruzcampo’s quality and taste, as well as, drive profits while helping Cruzcampo stand out from its competitors (Maguire). Pricing for Market Penetration strategy is ideal for Cruzcampo since Heineken already has nine distribution centers in the US, and Heineken itself, is a nationally recognizable brand.

When deciding on the price, we will analyze our competitors prices and decide on a price that is slightly lower than that our competitors to give us an advantage. 

Promotion

On average, our target audience spends more than six hours on Tv, sports, and leisure. An Advertising campaign aired during a televised sporting event, such as college football would be an ideal platform to reach Cruzcampo’s target audience. The target’s age range of 21 to 49 composes a 57% of all viewers for a college football game with a total of 61% male viewers (Foundation). Social media advertising such as setting up a Facebook page would be useful since 83% of males between the ages of 21-49 use at least one social media outlet. With Facebook being the website that is most used by our target audience age range (“Social”).

Anticipated Success in the U.S. Market

Owned by Heineken International, Cruzcampo is so loved by the Spaniards and now the international students that are writing this blog post think it could be successful in the American market. Although we are confident Cruzcampo would be an excellent product to introduce in America, we would need to be- on the lookout for potential threats and risks that doing so would inevitably bring. The Colorado based Brewers Association (BA) economic impact report revealed that from 2014-2016, there was a 21.7% increase, $67.8 billion, in the amount of money craft brewers added to the U.S. economy (Vorel). Craft breweries have been saturating the beer market for several years as micro-breweries have become an increasingly popular trend. In 2017, the number of small breweries reached its highest count yet in America at 6,000 (Vorel). This is positive because it means that Americans are open to trying new beer brands; before moving to Spain, I had never heard of Cruzcampo, so a new name in the American beer market could be attractive to Americans. The only potential downside is that Cruzcampo is certainly not a small craft beer company, so getting Americans to join in on another beer giant might be harder said than done. However with the help of Heineken, the parent company, creating  brand awareness for Cruzcampo should be easy to achieve.

Beer giants in America take up another huge share of the American beer market. For example, Anheuser-Busch InBev has 45% of the American market; MillerCoors has 26%, and Heineken USA has 4% (Notte). Though not quite a beer “giant”, Cruzcampo would have a lot to compete against. Because Cruzcampo is owned by Heineken International, it would be more likely that proper marketing and branding would be achievable in order for the beer to be successful in America because of its already large size and connection to Heineken USA.

Conclusion

Cruzcampo, one of the most successful beer brands in all of Europe, is a product that we believe has massive potential in the US market. While the bulk of the US market is occupied by beer giants such as Anheuser-Busch InBev and MillerCoors, studies involving the growing success of new micro-breweries have indicated that Americans are open to trying new brands. Cruzcampo would be launched by Heineken, it’s parent company, which already holds a strong stake in the US beer market and we believe that it’s unique taste will help it appeal to our target audience of lower to middle income men between 21 and 49 years of age.

Sources:

Berman, Craig. “Who Are the Largest Target Markets in Alcohol Advertising?” Chron.com, Chron, smallbusiness.chron.com/largest-target-markets-alcohol-advertising-66914.html.

Foundation, National Football. “National Football Foundation.” Passion for College Football Remains Robust > National Football Foundation > NewsDetail, 19 Mar. 2013, http://www.footballfoundation.org/tabid/567/Article/53380/Passion-for-College-Football-Remains-Robust.aspx.

Maguire, April. “6 Different Pricing Strategies: Which Is Right for Your Business?” QuickBooks, 16 Mar. 2017, quickbooks.intuit.com/r/pricing-strategy/6-different-pricing-strategies-which-is-right-for-your-business/.

Notte, Jason. “These 11 brewers make over 90% of all U.S. beer”. Marketwatch.com. https://www.marketwatch.com/story/these-11-brewers-make-over-90-of-all-us-beer-2015-07-27

Vorel, Jim. “There Are Now More Than 6,000 U.S. Craft Breweries For the First Time”. Pastemagazine.com. https://www.pastemagazine.com/articles/2017/12/there-are-now-more-than-6000-us-craft-breweries-fo.html

Watson, Fiona Flores. “Andalucian Beers.” www.andalucia.com, www.andalucia.com/gastronomy/beer.htm.

“Bud Light Consumer Insights and Demographics.” Infoscout.co, www.infoscout.co/brand/bud_light.

“Cruzcampo.” Cruzcampo – Sevillapedia, www.sevillapedia.wikanda.es/wiki/Cruzcampo.

“Drink it up: what consumers want when buying beer.” SurveyMonkey, http://www.surveymonkey.com/curiosity/what-kind-beer-people-like/.

“Ficha De Producto Cruzcampo Pilsen.” www.cruzcampo.es,

www.cruzcampo.es/docs/sections/cruzcampo-pilsen.pdf.

“Social Media Fact Sheet.” Pew Research Center: Internet, Science & Tech, 5 Feb. 2018, http://www.pewinternet.org/fact-sheet/social-media/.

 

Hot Cheetos entering the Spain Market

Hot Cheetos History 

Flamin Hot Cheetos was first discovered in 1976 by a Mexican native, Richard Montanez. A true “rags to riches story” (NextShark), Montanez was “a janitor at the Frito-Lay factory in Rancho Cucamonga, California” (NextShark) when a machine broke down and Montanez added chili powder to Cheetos recognizable bright orange cheese dust. From there, “Flamin’ Hot Cheetos became Frito-Lay’s top-selling product”, and Montanez became the executive leading multicultural sales and community promotions for PepsiCo’s North American Divisions. Within Frito-Lay’s brand portfolio, “Cheetos has had net revenue growth of 6% in this year’s third quarter making Frito-Lay North America’s net revenue reach of $10.97 billion (Yu).” With the immense success that Hot Cheetos has  achieved in United States, we believe Hot Cheetos could also be a great success in Spain.

Target Market

InfoScout reports that Cheetos are bought by a specific demographic. Data from 1 in every 500 shopping trips suggests that Cheetos are mainly purchased by low-income people, Hispanics, African Americans, Asians, and adolescents (InfoScout). Consumers younger than the age of 24, with no college education,  and making a salary of anywhere from $0-$40,000 also have very high indexes for purchasing Cheetos (InfoScout).

We also know that the people who buy Hot Cheetos have specific spending habits and values. For example, most people who buy Cheetos buy them at gas, food, and convenience stores (InfoScout). In addition to this, they buy their Cheetos with either cash or food stamps, instead of debit and credit cards. This could also be an indication that food is budgeted less money out of a family’s household budget.

This data helps us analyze  who the real consumers of Hot Cheetos are and how we can take their preferences to pinpoint a similar market in Spain. While producing a marketing strategy, Cheetos will want to focus on areas in Spain that have similar ratios of young people in an area and their salaries. Our main focus group will be teenagers and young adolescents from lower income families. Race may not play as big of a role in our marketing strategy as Spain has a very low ratio of Hispanics, African Americans, and Asians in comparison to the United States.

 

Marketing Mix of Hot Cheetos

Product

Cheetos is a brand of Frito-Lay and already has a presence in Spain, the most common Cheetos product sold in Spain is the Pelotazos, a cheese corn flavored snack. The majority of the chips sold in Spain are flavored either Jamon, cheese or plain salt. We anticipate the introduction of Hot Cheetos in the Spain Market to be successful since the flavor is different from what is currently sold in the consumer market. The only direct main competitor of Hot Cheetos will be Takis, a spicy tortilla corn chips which is already sold in Spain.

Place

Since PepsiCo, Cheetos parent company already has many distribution networks worldwide, we will sale Hot Cheetos in stores that already carry PepsiCo and Frito-Lay products throughout all of Spain. This includes grocery stores chains, generic stores and even small family owned businesses. Diaz Supermercado and Mas Supermercado are two grocery store chains where Hot Cheetos will be sold. Since our main focus group is teenagers and young adults in low income families,  Hot Cheetos will also be available in local markets where low income families tend to shop such as Chinos stores, Bazaars, and tobacco shops.

 

Our main competitor Takis is currently available in groceries stores and local family owned businesses as well. One of our tactics will be product placement, we will talk to the managers and business owners to ensure they place Hot Cheetos right next to Takis. This will give us an advantage, it will allow Takis current customer base to become aware of Hot Cheetos and have an impulse to purchasing them instead.

Price

In the U.S. Cheetos adopted a penetrating price policy, they set their prices relatively low to reach a wide fraction of the market at an early stage. To this day, Cheetos has maintained this pricing policy, which gives them an advantage to their direct competitors by having affordable prices.

When we introduce Hot Cheetos in Spain, we will be focusing on the same target market as in the U.S.; adolescents and young adults. Therefor implementing the penetration price policy would be appropriate in this market as well. Setting the prices relatively low will allow Hot Cheetos to gain a section of the market in Spain quickly. We will also be implementing odd-even pricing, which is a psychological pricing method that makes prices more appealing to buyers by setting the price in odd numbers. This makes the illusion of a sale, the consumer thinks they are getting a better deal and are more likely to make an impulse purchase.

For the 9 oz. Hot Cheetos bag, our retail price in Spain is set to be 2.75 Euros. The smaller bag of 2 oz. will be sold for .95 Euros. These prices are relatively low and will allow Hot Cheetos to enter the Market and compete with our competitors.

Takis 5.3 oz. bag is currently selling for 1.95 Euros and their smaller bag has a retail price of 1 euro. The big bag of Hot Cheetos is slightly more expensive than our competitors, but it has more product so it’s a reasonable price.

Promotion

                          

Cheetos is a very well-known brand throughout the world, with a great brand image and a strong customer base. The mascot Chester Cheetah helps the product get recognized easily throughout the world. For Hot Cheetos, we will utilize Chester Cheetah to help increase the brand awareness for this product in Spain. We will do this by promoting Hot Cheetos using social media. Teenagers and young adults in today’s era spend  a great amount of time using various social media platforms, which we will use to market to them directly.

We will focus on the most prominent platforms: Facebook, Instagram and Twitter. Cheetos already has accounts in these platforms, so we will create a different account focusing on our specific target market in Spain. With the magnitude of social media users, these platforms will allow us to increase the brand awareness of hot Cheetos and create more promotion for our product.

Our main competitor Takis, has similar marketing tactics, they have social media accounts designed for Spain consumers. In order to succeed in this market, we will analyze the type of advertising that Takis do through these platforms to have a better understanding of what type of posts reach the most customers.

 

Why Hot Cheetos could be successful in the Spanish market:

1)   Excellent performance of Hot Cheetos in the US market.

Flamin’ Hot Cheetos have seen tremendous success in the United States. Furthermore, a hip hop group named Y.N. RichKids have rapped about the product in an extremely popular music video (Reporter). .The consumer base in Spain has often shown a desire to replicate the United States in terms of demand for goods.

2)   Established dominance of PepsiCo Foods in Spain.

PepsiCo is a global giant in food, snack and beverage industries. It is the parent company of Frito-Lay, which makes Cheetos. As of 2017, PepsiCo Foods led the savory snacks industry in Spain with a 26% retail value share. Thus, the corporation already has a strong base in Spain and it understands the market well. Bringing in a new product is not going to pose too many challenges to them (Savory).

3)   Accelerated Growth in the Snack food industry in Spain.

As a direct result of new products, brands and a great deal of innovation, the snack food market is experiencing accelerated growth in comparison to other food industries in Spain. The total market including snacks and nuts achieved in 2016 a record size of 300,000 tones with a total value of €2,000 million. This shows a growth of 3% in volume and 1.5% in value. According to reports, one of the key levers in the development of the snack food industry is the arrival of innovative products based in “pleasure” factor developing new seasonings and packaging. For instance, crisps in tubes which are growing particularly at a rate of 20%+ according to IRI agency data (The Snacks).

Hot Cheetos would exploit all 3 of the above mentioned points. They would be products that come with great results in America, brought to Spain by a company that is a well established industry leader, and would be a product based in the “pleasure” factor with innovative seasoning, the like of which is unheard of in Spain. It is for this reason that we believe Hot Cheetos would see tremendous success here.

Potential Risks:

1)   A lack of certainty regarding the Spicy flavor adhering to local tastes.

Among the many myths surrounding Spanish cuisine, one that is widely denied by locals is the one stating Spanish food is spicy.4 In fact, besides the occasional paprika-spiced chorizo, Spaniards are not known to have a liking for spicy food. Keeping this in mind, it is possible that the consumer base may not react well to snacks like Flamin’ Hot Cheetos although they aren’t actually all that spicy. However our main competitor Takis has been in the Spain market for a while and has been successful. This is why we anticipate Hot Cheetos to thrive in Spain, the locals will find Hot Cheetos to be bursting with flavor and richness that some of the typical Spaniards dishes don’t have.

2)   Increasing number of health-conscious consumers in Spain.

Much like a lot of other Western European countries, Spain is witnessing a rise in health-conscious consumers. This is seen as the most sinister threat to the snack food industry (Savory). Perhaps efforts going into bringing in Flamin’ Hot Cheetos bear a high opportunity cost in that they could have been redirected to creating a product based on wholesome ingredients that panders to health-conscious consumers. 

A good way to address this might be to alter the hot cheetos recipe by adding a few wholesome ingredients and marketing the product in a way that would best reflect the “new wholesome Hot Cheetos”.

Conclusion 

Cheetos has demonstrated effective in the North American with a recognizable brand. With Flamin Hot Cheetos being a huge contributor to Frito-Lay’s success. Frito-Lay can confidently enter the Spanish Market with Flaming Hot Cheetos with the intentions of being profitable based on following a proper Marketing Mix, recognizing Flaming Hot Cheetos’ potential successes and risk, along with being well informed of the targeted audience and the geographic area, and mimicking our competitor entry into Spain. PepsiCo will grow their brand internationally as well as obtain a financial increase in revenue.

Sources:

Bingham, Amy, et al. “8 Myths About Spanish Food.” An Insider’s Spain Travel Blog & Spain Food Blog!, 8 Oct. 2015, www.spanishsabores.com/2015/10/08/8-myths-about-spanish-food/

Food Beast, NextShark||h/t:Inc., 2 Mar. 2016,

https://www.foodbeast.com/news/a-humble-mexican-janitor-accidentally-invented-flamin-hot-cheetos-and-tis-is-his-life/. Accessed 20 Feb. 2018.

Reporter, Daily Mail. “Flamin’ Hot Cheetos so ‘addictive’ among children that schools are banning them (and they’ve even inspired their own music video).” Daily Mail Online, Associated Newspapers, 16 Oct. 2012, www.dailymail.co.uk/news/article-2218866/Flamin-Hot-Cheetos-addictive-children-schools-banning-them.html?mrn_rm=als1

Savoury Snacks in Spain, www.euromonitor.com/savoury-snacks-in-spain/report

Yu, Douglas. Barkeryandsnacks.com, William reed Business Media Ltd., 6 Oct. 2017. Accessed 20 Feb. 2018.

“Cheetos Consumer Insights and Demographics.” Infoscout.co, http://www.infoscout.co/brand/cheetos.

“The Snacks Market in Spain.” Green Seed Group, 22 Jan. 2017, www.greenseedgroup.com/snacks-market-spain/

“What is market penetration pricing? definition and meaning.” BusinessDictionary.com, www.businessdictionary.com/definition/market-penetration-pricing.html.