Gallardo’s Goes to Mexico

INA ANDRIANI _ notes on “Gallardo’s Goes to Mexico”

Consumer type

1. Job #1: Expression of creative abilities and love for their family. Reinforcement of self-esteem.

2. Job #2: To appear as a talented, careful, and experienced cook.

3. Job #3: To deliver a satisfying meal, despite having less time or desire to do so.

Challenge

1. The products were priced higher than competition.
2. Very less or no apparent differentiation among the two brands.
3. Failure to penetrate rural households and the modern trade channels.
4. Ineffective communication strategy that did not establish an emotional connect with the consumer.

Between 2001 and 2002, Gallardo’s revenues dropped, from US $25 to $17 million, because they existing brand Hermosillo phased out of the market. But the company grew to $ 42.2million in 2004. When asked about the growth of Gallardo in Mexican market, Joe Ortega, Managing director of Gallardo Mexico stated “it’s all about relative growth of ready to eat market in Mexico. “

Questions

1. Articulate a step-by-step circumstance-based approach to segmentation and product design, following the effort of Gallardo’s entry to Mexican market. Do you think the approach is correct? Is there anything missing?

Defining the segments  – quantifying the size of market segments  – developing the target market-communicating to the consumers – advertising

The team guessed that the total market value of products that were being hired to do these jobs was about $3.5 billion. About 65% of this was spent on job #1, which they named “Express my talent and love;” 24% was spent on job #2, “Help me be better;” and 11% on job #3, which they dubbed “Phone it in” – a job that arose most frequently in bustling Mexico City and Monterrey.

1. Compare the success of Vive! Snack Bar and the early results of Gallardo’s Mexico. What are the differences?

If we could provide a similar boost at a 50-cent price point, and marketed it effectively, we’d have a home run.” Meyer’s staff developed a chocolate, glucose and protein-intensive product into which a modest amount of caffeine was added. The paste could be easily extruded and packaged, which was key to hitting the price target.

Similarity

• The marketing and experiment that Gallardo used was revolutionary.
• Segmented people by the jobs they wanted done in their lives, and marketed their products as solutions to the jobs.

Differences

• Needed to convert homemakers (who grow their own vegetables and herbs) to consume already made seasonings
• Needed to help women embrace their decisions in purchasing higher priced seasonings
• Needed to take title as the country's leading brand of sauces, salsas, and seasonings, from California.

1. Can Gallardo’s replicate its US success in Mexico?

Different market,

Meyer had purchased Gallardo’s at a time when the market was populated by many small, regional brands. By heavily advertising its brand and introducing new products regularly, Gallardo’s had become the dominant branded products maker. While in Mexico…