Here in this report we have outlined the findings of our research, and our decisions on exporting our product abroad.
Below you will find a brief introduction, as well as our Mission Statement and the country we will first have as our host region for exportation.
We then discuss our competition environment as well as our strategies concerning our target market, product strategy, distribution, communication (marketing) and pricing.
The report concludes with our perceptions and expectations about expanding our company in into the international market.
Our founder Sammy Romero has been a successful entrepreneur in Mexican cuisine starting out in 1975 in San Antonio, Texas, where he owned El Cocinero Loco, a small Mexican Restaurant in the Western part of the city. The Restaurant itself eventually closed shop; but this wasn’t the end of Great Foods Inc.! Mr. Romero continued on focusing on the popular sauce that made his business successful thus far.
Since 2000, Great Foods, Inc. has received a number of unsolicited inquiries about the new snack versions of the company’s QueRico! Mexican sauce from all over the world. This has given the Company the idea to branch overseas and look for an international market as well as the successful domestic market it currently possesses.
After conducting some research with marketing experts in similar industries, we have concluded that the entry strategy for the international arena will be exportation.
Based upon the large numbers of unsolicited inquiries from the past five years, as well as extensive gathering of research by media reports and political risk reports; we have determined that the countries of Australia, Brazil, France, the UK and Japan will have the greatest potential to accept our brand of snack sauces.
Below are the criteria we decided upon to select the best country for our initial international expansion:
Before conducting the vast research, one might have thought of Brazil as the most attractive, because of their likeness to Hispanic culture and large population.
Though Australia’s population rate is low and their inflation rate is high, we find that this country rated very high in other factors which are of large importance when considering exporting overseas; and gave them the largest overall rating.
Firstly, they are one of only fourteen nations (and the only country of this group) that has a valuable across the board free trade agreement with the United States. The U.S. – Australia Free Trade Agreement is the first FTA with the U.S. and a developed nation since the Canada-U.S. FTA in 1988. (ustr.gov, 2009). Australia is a growing and large investment partner of the U.S., and as of 2003 was the U.S.’ fourteenth largest export market for goods. (ustr.gov, 2009).
Also, tariffs in Australia were lower than most (only higher than Japan). Further, they were rated with the highest GDP-Per Capita (only lower than the United States). And lastly, their culture is similar to the U.S., in that they are native English speakers and are a majority of Christians – which surprisingly does affect the success of failure of an exported product.
There are a wide variety of spreads and sauces that are currently marketed and distributed in Australia. Some of these include sauces such as carbonara, bechamel, chili, mushroom and steak sauces. (gffoodservice.com, 2007)
There are currently several competitors that market and produce sauces in Australia. Some of these brands include, Australian Native Produce Industries Pty (Leggo Sauces), Knorr Sauces, Marron Marketing Australia and Campbell Sauce Company. The good news is that even though these companies make nice tasting products, none of them make an authentic Mexican salsa-type sauce. (about-australia-shop, 2009)
Below is a table identifying some of the local and foreign direct and indirect competitors within our product category.
Since this is our first venture overseas, we have decided to test the waters and have selected the first target market for our QuéRico sauce to be the Mexicans residing in Australia. Currently, the largest population of Mexican Australians reside in the two cities of Melbourne and Sydney. As such, this is the area where we will originally target.
The reason for targeting the Mexican Australian population is obvious in that this group already has a taste for Mexican Sauces and will be open to trying them. And by targeting Melbourne and Sydney, we will also be inadvertently exposing our product to a large populated area of other ethnicities.
Our strategy will be to use direct marketing through retailers that are located in areas that are frequented by the Mexican Australian population.
The areas we will seek to focus on in Sydney are Carlton, Coogee, East Sydney, Ashfield and Kingsford. The area in Melbourne that is most frequented by Mexican Australians is North Wickham. We have chosen these areas because Mexican Australians frequent them for dining and shopping. There are many Mexican restaurants in these areas, and as such, are a big draw for Mexican Australians.
Aside from the restaurants, the Mexican retail and grocer shops in these areas sell sauces, and it is likely this group will also purchase our tasty sauce.
In general, the eating habits of sauces like QueRico! in Australia are used as dips and dressings as well as accompanying different variations of food like baked vegetables and roasts.
We have decided to stay with standardization with respect to our product and will market the sauce in jars. In addition, we will also produce a “fresh refrigerated” version that will be exported in plastic containers.
Our distribution plan will be direct distribution through the channel of retailers that are located in the above described areas. These retailers will include grocery stores, mom and pop restaurants, as well as department and discount stores.
We will begin our promotions through posters and banners displayed throughout the establishments in the area, as well as have point-of-purchase display units that will highlight our sauce.
In addition to our product strategy, we have also decided to use a standardized approach with our marketing campaign. There are several reasons for this approach. If we are targeting the Mexican Australian consumers in Australia-they will be looking for an authentic Mexican flavor, and not one adapted for the regular Australian population. Further, our sauce will be in a better place as far as competition goes since our sauce taste close to home, and this is currently lacking in our host country.
QueRico! will provide its consumers the most authentic Mexican salsa in Australia.
QueRico!! will give Mexican Australians the chance to enjoy the taste of Mexico in Australia.
QueRico! Will be fresh, made from the finest and freshest ingredients from and original recipe.
QueRico! will also enable Australians to experience the taste of the best Mexican sauces made in USA.
Positioning is also an important factor to consider in our communication strategy to our target consumers. We have learned from our previous research that there quite a wide variety of spreads and sauces that are currently being marketed and distributed in our host country of Australia. However, and as stated earlier above, the good news is that even though these companies produce nice tasting sauces, none of them make a fresh authentic Mexican flavor salsa-type sauce. As such, this will be our focus when positioning ourselves against the competition.
The positioning of QueRico! will be to market the product based upon:
QueRico! To be the only true authentic Mexican sauce available in the Australian Market. Better quality and more fresh than some other imported “Mexican sauces” available in Australia.
QueRico! is reasonably priced for the high quality of the product.
Our company realizes that the culture of our target market of Mexican Australians is different than the native Australians. As such, and even though we are first focusing on the Mexican Australian population, we realize that the native population will also be exposed to QueRico! For this reason, we want to first stress upon the authenticity of Mexican flavor for our target market, but also boast of its great flavor and fine ingredients for the rest of the population. We feel this will be the best strategy to have one initial advertising campaign, but to reach a market that will be saturated with two cultures combined.
Our communication strategy focusing on cultural factors are:
Our top three Media Vehicles for rolling out our marketing campaign are:
Mexican Australians will appreciate authentic taste, freshness and quality ingredients.
Australians will appreciate the fresh ingredients and taste in a manner in which the sauce will be compatible with Australian cuisine.
Mexican Australians will have to be targeted with authentic Mexican taste.
Australians will have to be targeted with fresh & great tasting salsa suitable for Australian food.
Posters and banners displayed throughout the establishments in the targeted area of Sydney and Melbourne.
Discount coupons on QueRico! in restaurants and stores located in Mexican frequented areas in Sydney and Melbourne.
Have point-of-purchase display units that will highlight our sauce.
As outlined above, our first media vehicle will be the use of posters and banners displayed throughout the establishments selected in our target areas of Sydney and Melbourne. We feel this will enable our product to be visible to not only the Mexican Australians we are targeting, but also everyone else who frequents the areas where our posters and banners are displayed.
Secondly, we feel that discount coupons are a great way to convince consumers who may otherwise not want to give our product a try, an incentive to buy the sauce. After all, everyone loves a bargain, and there are a great number of consumers who won’t be able to resist!
Thirdly, having the point-of-purchase display units will get those last minute compulsive shoppers to give the sauce a try. It may not have been their plan to buy the sauce until they see the advertisement and product in the stores.
1..Below is our preliminary design for our posters and banners.
(Images by: stainlesssteeldroppings.com & frankston.voc.gov.au)
2. Next is our campaign visual for our discount coupons.
(Images by: stainlesssteeldroppings.com & frankston.voc.gov.au)
3. Thirdly our design for the POS Display units.
(Images by: stainlesssteeldroppings.com, allaboutmexico.com & frankston.voc.gov.au)
We have intentionally made each design similar so that they are recognizable when seen separately. For example, someone may see a billboard or banner, and then recognize it again at a display unit in a retail outlet. This will help in building the Brand as a recognizable brand product.
Costs & Pricing
In order to decide exactly what our pricing strategy would be; we first had to analyze the costs involved in producing, packaging, exporting and distributing our QueRico! sauce to Australia.
Here are the approximate costs for such exportation:
Landing costs for port of destination.
Firstly, the factory cost of our sauce per pound including our packaging will be $2.50.
In addition, there will be a local freight fee to carry the sauce to the port of shipment. This cost will come to $0.25 per pound.
We then need to add the cost of export documentation that will come to $0.20 per pound.
Lastly, we have the ocean freight insurance which is calculated at $0.75 per pound of sauce.
It is calculated that the import duties applicable to our sauce product is 12%. This gives us a sub-total of $4.14.
Average wholesale and retail markups for channel members:
The average markup by wholesalers in Sydney and Melbourne is expected to be $1.25 and the retail markup is expected to be 50%. This gives a final consumer price of $8.09.
The typical trade promotions (e.g., discounts)
The typical discounts and promotions are 10% of the retail price. These promotions however take place for only an average of one month per year, and as such, the final price paid by the consumer should not always include this discount.
Average retail price to the consumer in the foreign market
So we come to the average retail price to the consumer in the Australian market before seasonal discount and it is equal to $8.09. The retail price to the Australian consumer after seasonal discount will be $7.28.
Ocean freight and insurance
Import duty (12% of landed cost)
Wholesaler /distributor markup
Retail markup (50 percent)
Final Consumer price
Seasonal Discount (10 percent)
Final Consumer price after seasonal discount
Our initial plan was to keep our pricing low so that everyone including and aside from our target market would give our sauce a try.
However, because of the costs involved in exportation from the U.S. to Australia, as well as keeping our quality by using the finest ingredients- we realize that our pricing will be somewhere centered; but in the higher scale of competitive sauces.
We feel this will not hinder our process, as again we don’t have much competition in the way of the “Authenticity” of real Mexican sauce in Australia. Further, the prices for foods overall is more expensive in Australia then as the U.S., and we feel our consumers will feel that the freshness, taste and fine quality of the sauce is worth the retail price to the consumer.
As an example of our philosophy, anyone here in the U.S. who buys Grey Poupon mustard knows full well they are going to pay a much higher price than a regular generic brand of mustard. However, because of the high quality and flavor, consumers buy it, and this brand of Kraft mustard is very successful indeed! We are expecting a similar outcome for QueRico! in Australia!
For our conclusion, we have outlined in short the factors, elements and the important decisions we have made moving forward based upon our findings.
Executive Summary: Here we outlined the contents of the report.
Introduction: We introduced our reasons for contemplating exporting abroad and our decision to conduct research.
Mission Statement: We have redefined GreatFoods, Inc.’s new mission statement moving forward.
Country Market Selection: We discuss here our decision for Australia to be our first host country in exporting QueRico!
Competitive Environment: We have listed a number of direct and indirect possible competitors in the spreads and sauces market of Australia.
Target Market: Our target market will first be the Mexican Australians residing in Melbourne and Sydney. We will then hope to also expose our product to the already highly populated cities they reside in.
Product Strategy: We intend to keep our product standardized and describe the geographic locations in Sydney and Melbourne with which the Mexican Australians frequent for shopping and dining.
Distribution Strategy: We will use direct distribution through the channel of retailers that are located in the above described areas. These retailers will include grocery stores, mom and pop restaurants, as well as department and discount stores.
Communication Strategy: Here we inform of the importance of branding as well as discuss the key to our Brand core strategy and value of proposition. We then have listed our three top communication vehicles to implement as well as laid out our preliminary visual campaigns for each vehicle.
Costs & Pricing: Lastly, we discuss our findings of the costs of exportation and come to a pricing strategy that we can afford, and that we feel will still seem reasonable to our target market of consumers.
In closing, we feel that we have done our homework, and look forward to our first venture out into the international market. We have high expectations of success in Australia, and then plan to branch out further into other host countries. The World is our limit!
About Australia Secure Online Shop
(2009) All-About-Australia Website. Retrieved on
April 3, 2009 from:
Australia and Mexico: Building bridges across the Pacific (November 18, 2008). The
Hon Stephen Smith MP, Australian Minister for Foreign Affairs. Retrieved on
April 3, 2009 from:
Australia Free Trade Agreement (2009). Offices of the United States Free Trade Representative
Website. Retrieved on March 27, 2009 from:
Australian City Life Sites (2009). BCL Business Website. Retrieved on April 2, 2009
Australian Government -Department of Foreign Affairs and Trade (2009). March
Country Brief, March 2009. Retrieved on April 1, 2009 from:
Australian Sauces – Original BBQ Food Company
(2009). Far Away Foods Website.
Retrieved on April 3, 2009 from:
Campbell, C. (2009). True cost of export documentation
. Let’s Grow Dynamic Business
Website. Retrieved on April 14, 2009 from:
Central Intelligence Agency (CIA) World Factbook
, (updated on March 19, 2009). Retrieved on
March 26, 2009 from: https://www.cia.gov/library/publications/the-world-
Choosing between standardization, adaptation and adapted standardization
(2009). The Eur-
Export.com Website. Retrieved on April 7, 2009 from:
Clark, J., (2008). Exporting to Australia. WHK Business Growth Website. Retrieved on
April 16, 2009 from:
Country-Specific Tariff and Tax Information
(2009). Export.Gov. Website. Retrieved on
March 28, 2009 from: http://www.export.gov/logistics/country_tariff_info.asp
Customs procedures for importing and exporting
(2009). Australian Border & Customs
Protection Service. Retrieved on April 14, 2009 from:
Exporting and Importing Goods – Exporting to Australia
(2007). AllExperts Website.
Retrieved on April 15, 2009 from:
Food in Australia
(2009). Portal Oceana Website. Retrieved on April 2, 2009 from:
Great Australian Sauces and Dressings (
October, 2007). GF Food Service Website.
Retrieved on April 3, 2009 from:
Invest in Australia –Land of Opportunity
(2009). Down Under Online Website.
Retrieved on April 2, 2009 from:
Keegan, W.J., & Green M.C. (2008). Global Marketing
Edition Upper Saddle River,
N.J.: Pearson Prentice Hall
Law and Justice
(2009). Australian Government Website. Retrieved on April 3, 2009 from:
Mexican-American influence dominant and growing
(2002, January 1) AllBusiness.com
Inc. Website. Retrieved on March 26, 2009 from:
Mexican Restaurants in Australia
(2009). Best Restaurants in Australia Website.
Retrieved on April 1, 2009 from:
Sauces, Vinegar & Oils From Discountnaturalhealth
(2009). Discount Natural Health Website.
Retrieved on April 3, 2009 from:
Shipping your product
(1998). Unzco.com Website. Retrieved on April 17, 2009 from:
U.S. Import and Export Price Indexes
(2009). Bureau of Labor Statistics. Dept. of Labor
Website. Retrieved on April 15, from:
U.S. Trade Agreements
(2009). Export. Gov. Website. Retrieved on March 27, 2009
Welcome to Australian Franchises
(July 20, 2008). Australian Franchises Website.
Retrieved on April 3, 2000 from: www.australianfranchises.com.au