Exam International Marketing

Date: 26/5/2020

Student: AMER DABAGE FARES

Professor: LIC. FERNANDO ROA POVEDA

Point 1

Currently in Colombia the need for the consumption of organic products is born with the
awareness of taking care of the body, according to studies that have been carried out over time,
where its properties become essential nutrients for the proper functioning of the organism.
Naturally organic products are a bet on health care, offer great benefits in addition to providing
nutrients and vitamins that contribute to the strengthening of the human body improving its
metabolism, relieving stress, lowering cholesterol levels among others.

According to Fedecacao In the country 350 municipalities are the ones that produce cocoa and
many Colombians depend on it. Fedecacao estimates that there are about 38,000 farming families,
and more than 100 thousand are dependent on cocoa-associated jobs in the nacionaterritory.

Cacao del Huila is the best productive example with export seal, this ancestral and pre-Columbian
food resumed the importance it deserves and on pillars of competitiveness offers added value to
aroma, taste andquality. Huila cocoa is characterized by being fine and unsurpassed, which
allowed it to position itself as one of the best in the world..

The general objective I want is dto set out a business plan forthe commercialization of a product
based on organic cocoa, made in different forms and flavors such as: (nail, cinnamon, with cloves
and cinnamon, nutmeg, bitter and sweetened with organic panela)..

I seek to do something that people prefer for quality and not for the price, that we have a
differentiating factor that our future customers prefer.

I also think it is very important to stress that more than 80% of the cocoa sold is by the big
companies in our country like Luker and it might also be good to become a supplier of one of
these companies by offering our products.

In my value proposition I find it very important to be able to offer a high quality with a good price,
allowto adapt the offer to the needs and tastes of each customer or group of customers, in
addition I want to manage to have a new product and be able to guarantee our product.

Cocoa has beneficial health properties for its antioxidant characteristic aid in the prevention of
cardiovascular and/or coronary diseases as it improves circulation, stimulates the heart muscle
and reduces blood pressure, additionally reduces the oxidation of cells, slowing their aging. Many
of the big companies do not use this to their advantage and to me personally this seems to me of
the utmost importance and that is why I think of using it to my advantage, that in addition to the
product is rich and delicious, it is also good and healthy for people, which will expand the niche
market and it should be emphasized that the consumption of organic and good food for health has
grown strongly and it is good to take advantage of this opportunity that gives us cocoa.

In addition ornot of the most important differentiating factors against the competitive market is
the cocoa bean that is used in the production of table chocolate, because the grain is grown in the
municipality of Rivera- Huila, which is characterized by being a very fine grain and of unsurpassed
quality, aroma and flavor which allowed it to position itself as one of the best in the world..

The strategy used is to manage to add something that the other products do not offer in order to
have a point in favor and to capture the attention of more suppliers and customers towards our
company.

The marketing strategies we would use is to pretend to satisfy our potential consumers, and
respond to their needs to feel on their palate a soft, pleasant and exquisite taste, which will suppl
their tastes when consuming an organic drink. In search of loyalty and recognition of our brand.
The mission is to become the most recognized organic cocoa drink of our Colombian capital, made
with the traditional recipe of our field. And so be a member of our family basket. Working hand in
hand with cocoa growers in our regions is a privilege of our organic product, as we can reach the
standards of quality, price and most importantly the innovative strengthening that allows us to
penetrate the Colombian capital market

Long-term strategies:

Consumer bargaining power: The company seeks to have customers of all categories, the
bargaining power that we find is to change the consumer's taste for their traditional chocolate,
getting them to know and prefer the one we offer. Giving the buyer the best experience at the
time of consuming organic products.

Threat of entry of new competitors: We seek to be a company with high quality rates in the
finished product and the ingredients that are used, from the moment the consumer decides to
test the product and decides to stay with us, our recipes are original which makes competitors
have high barriers to overcome.

Supplier bargaining power: We seek to make our suppliers trust, and to provide excellent raw
material at affordable prices, where added value focuses on good product and service, fulfillment
of deliveries and itself on quality sustainability versus distribution prices.

Threat of entry of substitute products: There are a wide variety of substitute products, such as
candy, biscuits and there are many national and international companies. Chocolate being an
essential product only competes with the same product, i.e. chocolate cannot compete with
caramel for example and vice versa, since they are somehow aimed at different audiences. The
company is only engaged in chocolate having no interest in entering other areas, for them the
larger brands that market so many chocolates and candies make their products more common,
and do not have the specialization in the field of chocolates and less when it comes to organic.
Cdistribution logs:Deliveries to sites requested by customers prior agreement to cover transport
costs and Deliveries as soon as possible in a timely manner.

Point 2.

In this business model I cover several strategies such as creating institutional alliances since they
make it easier for the company to have the ability to manage all the functions of the business and
to connect with an environment beyond the community. Partnerships also enable the
development of collective efficiency schemes with other factories for order delivery beyond
installed capacity, thus facilitating gradual and planned growth.

That is why it would be important to use strategic allies such as Casa Luker, procolombia,
asprocent , AsoAlpes, Comcap, Asocanorte among others.

Differentiation and aggregation of value: The small artisanal chocolate company needs to be able
to communicate that its product is of organic origin or that it has a certification that ensures
safety. Also, it must be able to convey a binding experience with the client and that respects a
particular code of ethics, which is friendly to the environment and biodiversity, among other
values; and, which provides fair income to its workers. Telling the story of producers and
processors in their rural environment generates attributes consistent with the social ethics of
certain consumer groups willing to contribute to development. Since the company does not have a
recognized trademark, achieving certifications facilitates its positioning. Costs are distributed in
facility labor, maintenance labor, supplies, administrative costs, transportation, tools, and
equipment.

Presentation and quality: The artisanal chocolate company must take advantage of the special
conditions offered by the territory, cultural tradition and other distinctive attributes as part of its
quality policy. The use of local ingredients such as fruits or species, which are not found
everywhere, will allow you to add a unique value to the product. This will give you the opportunity
for the product to become new, meeting needs that customers were unaware of because there
was no such offer.

Similarly, the company's operations must facilitate after-sales quality and compliance with quality
standards in line with customer expectations

Capacity building: Training for the development of skills useful to the business are essential.
Therefore, the approach of learning by doing and cross training is recommended. In this way,
members of the rural community can be employed by the business and do their work effectively;
both at the management and process management level.

Differentiation: The rural cocoa processing company - as a small business must assume a market
approach based on differentiation and high value. Taking a strategy based on volume and low
prices is counterproductive given your small business status.

Pricing policy: For the type of companies in question, price should never be the main attraction of
market penetration; even though the company must seek to be competitive. The contribution
margin should allow to generate the necessary revenue for the growth of the company and its
impact on the community that hosts it. Reinforcing this, differentiated product prices must
maintain a balance between customer perceived value, production and distribution costs. In the
case of artisanal cocoa derivatives, directing the product to specific segments allows for greater
flexibility in pricing.

Channels

A short distribution channel is managed, where independent producers or small associations take
cocoa to larger associations and they are already responsible for selling cocoa to factories or
companies that require cocoa

If we talk about distribution; the cocoa processing company's business is not transport, by
definition. To the extent this is understood, the company will be prevented from getting tangled
up in complicated and costly logistical management; especially if the optimal volume has not been
generated. For example, if the company has not achieved enough sales on a route - to fill a small
truck, or van - it will incur the cost of transporting in empty spaces. In addition, in order for
chocolate to maintain its shape and integrity, it must be transported at a controlled temperature
-15 to 18 oC- and under relative humidity conditions around 60%. In addition, the boxes in which
the product is transported must be consistent and square or rectangular; to be able to place one
on one another without mistreating the content.

Cocoa is a product that brings many commercial opportunities, in the analysis of small cocoa
processing companies, we have identified relevant business opportunities that are defined below.

Tourist Market: The sale to tourists and visitors is important because it involves a direct and
binding experience with the customer. In the case of artisanal chocolate factories that are located
near tourist trails, stops, restaurants or hotels, this market represents a real opportunity. In this
sense, it is important to establish a relationship with the operators of the trail and in particular
with the tour guides.

Supermarket Chains: The placement of the product through supermarket chains represents a
significant challenge due to the commercial and logistical demands of the customer. However, the
business can be successfully established if a relationship is achieved that allows the gradual
development of the artisanal chocolate processor as a supplier.

Small supermarkets and shops: There is the opportunity to place some products in small
supermarkets, gift shops -"and retailers located in tourist areas or of greater purchasing power.

Companies that make beauty products: Cocoa liqueur also has value for beauty products such
skin creams.

Specialized pastries and restaurants: There is the possibility of placing cocoa sub-products to
pastries and restaurants that demand important levels of quality

Chocolates: Processed cocoa products for chocolates represent a relevant opportunity as long as a
quality raw material is required. Specialized chocolatiers – local and international – demand
fermented cocoa with an adequate processing – peeling and roasting – which involves adding
value. The value-by-volume ratio makes it feasible to transport and even export these cocoa
products

Export markets: Small rural enterprises have opportunities in external markets. If a craft chocolate
processing company focuses on differentiation and quality, it can offer value-added finished or
intermediate products, even in relatively small volumes. In this sense, targeting segments of the
international market allows access to greater capacity to pay and consumption, as well as a
willingness to value and pay for particular attributes of the product. It should be noted that the
export market offers tangible benefits, such as: (a) Expanding the product placement market; (b)
higher revenues from achieving better prices; (c) promotion of the country of origin, certain marks
and quality of products; and, d) technical and economic collaboration. In the case of cocoa there
are a number of intermediate products between cocoa bean and chocolate, which must be
analyzed.

Export also requires stricter temperature and humidity handling. This will involve checking and
adapting the packaging so that you can properly handle the products - for example, chocolate
bars. This is because cocoa derivatives are sensitive to temperature changes and varied transport
and storage conditions. Similarly, as mentioned above, the boxes have to be strong enough to be
held on to each other in a "pallet" and well closed to reduce the entry of insects, light, moisture
and everything that the boxes will find in the different means of transport and warehouses on the
way to the final customer. Sale of cocoa marketed in bags of 60 kilos of fique above the standard
price of the local market. (Distribute more resources for expansion and production) .

Point 3.

To define these strategies it was important to consider:

a) Define the value from the customer's point of view: In the case of cocoa derivatives, the
process should highlight the organoleptic attributes, presentation and context that the
customer prefers. Most customers want an experience, a solution, not a product or
service.
b) Identify the value stream: Eliminate waste by finding steps that do not add value, which
do not transform the product. Examples of this are internal shipments from one operation
to another, rather than placing the machines in the same order of operations.
c) Create Flow: Make the whole process flow smoothly and directly from one step that adds
value to another, from raw material to consumer.
d) Produce the Customer's "Hale": Once the flow is done, the processor will be able to
produce on customer orders rather than risk long-term sales forecasts. This allows you to
manage with minimum inventory levels and still have a better customer delivery service.
e) Pursue perfection: Continuous improvement and innovation must actively and
democratically engage employees, partners, partners and customers.

These strategies we will use the following:

b) Commercial aspects: The company must establish an easy-to-use distribution structure.

c) Organizational aspects: The organizational structure should facilitate connection with the
community and with institutional partners. This will allow the company to develop all the
necessary management and operation functions while maintaining an adaptable structure. In this
sense, it is advisable to establish a shared and inclusive governance.

d) Value aggregation: The company must add value based on transforming cocoa into a product
and differentiating this product according to the values perceived by the customer. If the company
achieves a positioning that links it to the ethics and expectations of the client, it can establish a
successful differentiation strategy.

(e) Access to technical assistance and training: The management of the small cocoa processing
company can access technical assistance and training through public or private support entities,
programs and institutional partnerships.

(f) Access to specialized information: Sharing experiences and receiving the council of expert
chocolatiers facilitates access to specialized information related to chocolate making. Institutional
partnerships will also allow access to a wider range of business-related issues.

g) Access to packaging and labels: The greatest difficulty in accessing appropriate packaging and
labels for chocolate is the generation of an attractive volume for the manufacturer of packaging
materials. In this case, cost efficiency is not a priority. In contrast, it is recommended to emphasize
a quality packaging, which protects the product and transmits the expected message.

(h) Acquisition of machinery: The company must start with the minimum machines and
equipment required and grow according to demand.

i) Maintenance Services: Maintenance services are often expensive and external to the
community. For this reason, it is important that the company trains several community members
and builds local capacity for maintenance with an emphasis on prevention