Export Plan for Annie's, Inc. Cheddar Bunnies SITUATION ANALYSIS

Description of the Firm

Description of the Product

Competitive Situation in the Industry

Resources to be used

EXPORT MARKETING PLAN

Long-term and Short-term Goals

Characteristics of Ideal Markets

Characteristics of the target market

Economic Overview

Demographic and Socio Cultural Trends

Market Position of USA

Competitive Analysis

EXPORT STRATEGIES

Product

Pricing Strategy

Marketing and Promotional Strategies

Action Plan

The company aims at exporting its cheddar bunnies to exploit the market of Mexico. The organization aims at increasing its sales by 5% in the first year of the exports. In addition to that, it would also locate a distributor for the product in the target market every year. It aims at participating in the market place of Mexico and taking advantage of about 75% of the consumer base of Mexico. It also aims at showing a profit within three to five years of the export initiative.

The company will operate at a break even position in the beginning of the project but with the passage of time the organization aims at selling 200,000 (4 oz.) units of cheddar bunnies per year in the target market and as a result it would generate a revenue of $12,00,000. The organization has a greater probability of profit as compared to loss. This is because the selected market would be chosen on the basis that it provides potential opportunities for growth to the organization.

In order to enter the Mexican market appropriately the company will have exclusive agreements with Mexican distributors. This will enhance the marketing efforts of the organization and will enable it to build a strong brand in Mexico. In order to effectively distribute the product in all the key regions, the organization will look for distributors who have access to all the key areas of Mexico.

In order to effectively promote the product, the organization will: answer all the inquiries from the foreign markets in a prompt manner, take part in the USDA tradeshow in Mexico, deploy the Agent/Distributor program offered by the U.S. And will work with WUSATA to get the necessary funds required for branding and promotion activities.

Export Plan for Annie's, Inc. Cheddar Bunnies

1. INTRODUCTION

The company aims at exporting its cheddar bunnies to exploit the market of Mexico. The organization aims at increasing its sales by 5% in the first year of the exports. In addition to that, it would also locate a distributor for the product in the target market every year. It aims at participating in the market place of Mexico and taking advantage of about 75% of the consumer base of Mexico. It also aims at showing a profit within three to five years of the export initiative.

2. SITUATION ANALYSIS

2.1. Description of the Firm

Annie's, Inc. is a rapidly growing organization. It offers natural and organic food products to a wide variety of consumers. The organization sells a wide range of commendable products, which are manufactured from high-quality ingredients. The organization offers all the products at affordable prices. These products strongly attract the consumers who are health-conscious in nature and aim to avoid artificial flavors, synthetic colors and preservatives, which are generally deployed in the manufacturing of conventional food products. The loyal and growing consumer base of the organization has enabled it to sell its products through mass merchandisers and massive retail chains. (Annie's Homegrown, Inc., 2014)

2.2. Description of the Product

The company aims at exporting cheddar bunnies. These bunnies are consist of organic wheat flour and real aged cheddar. The Cheddar Bunnies are tasty, nutritious and healthy. This product is ideal for hand size of a toddler, but due to their crispy crunch and appetizing cheesy flavor it has the ability to attract consumers of all ages, who will be tempted to have handfuls of this product. (Annie's Homegrown, Inc., 2014)

2.3. Competitive Situation in the Industry

The company has a commendable history of growth and profitability. According to the annual report of the organization, the total assets held by the organization grew from 72,429 thousand dollars to 90212 thousand dollars. The liabilities, on the other hand, declined from 25,492 thousand dollars to 24,283 thousand dollars. The current share price of the organization is $41.57 and the volume of shares traded is 363,473. (Annual Report: Annie's Inc., 2013) The graph below indicates the sales, gross profit, operating expenses and net income (in thousands) of the organization from the year 2011 to the year 2013:

(Annual Report: Annie's Inc., 2013)

The table below compares the important financial ratios and other growth variables of Annie's Inc. with its competitors.

Variable

Annie's Inc.

Hain Celestial

Mondelez

Market Share

4.08B

56.28B

Employees

3,665

110,000

Revenue

1.85B

35.31B

Quarterly Revenue Growth

0.26

0.33

0.02

Gross Margin

0.38

0.27

0.37

EPS

0.75

2.63

1.53

Resources to be used
The company will deploy an annual financial budget of $200,000 on this project. It will have a minimum commitment of 3-5 years with this project. The non-financial resources will include the inquiry of products in the potential market, recruitment of Spanish speaking staff members with extensive travelling experience, recruitment of a consultant to support the staff and agreement with the distributors and retailers in the target market.

3. EXPORT MARKETING PLAN

3.1. Long-term and Short-term Goals

The company will operate at a break even position in the beginning of the project but with the passage of time the organization aims at selling 200,000 (4 oz.) units of cheddar bunnies per year in the target market and as a result it would generate a revenue of $12,00,000. The organization has a greater probability of profit as compared to loss. This is because the selected market would be chosen on the basis that it provides potential opportunities for growth to the organization.

3.2. Characteristics of Ideal Markets

The table below indicates the characteristics of the ideal markets that could be targeted for the purpose of this project:

Country

Population

GDP

GDP per Capita

Canada

34,300,083

$1,335,000,000,000.00

41,100

Mexico

114,975,406

$1,560,000,000,000.00

14,800

Saudi Arabia

26,534,504

$622,500,000,000.00

24500

France

65,630,692

$2,160,000,000,000.00

35600

Columbia

45,239,079

$431,900,000,000.00

10,400

(Nationmaster.com, 2014)

3.3. Characteristics of the target market

3.3.1. Economic Overview

On the basis of the above data, the potential target for the export of the product under consideration is Mexico. This is because, the economy has tackled the current financial crisis in an efficient manner. The economy is witnessing a constant increase in the purchasing power. In addition to that, the economy also has a preference for American goods and the consumers prefer to have American style food. The economy has a promising consumer base and it has the ability to provide the organization with productive opportunities for growth. (The Heritage Foundation, 2014)

3.3.2. Demographic and Socio Cultural Trends

The economy's population can be divided into upper class, upper middle class, lower class and rural group. The upper middle class constitutes two percent of the country's population and enjoy luxury housing, multiple vehicles and international business holdings. The upper class, on the other hand, composes 20% of the total population. They are professionals and have their own homes and vehicles. The lower class constitutes 49% of the population of the country. The have low incomes, and spend most of their income on the basic necessities. The remaining population of the company is rural, these people are uneducated and generally remain unemployed. (The Heritage Foundation, 2014)

3.3.3. Market Position of USA

The United States of America is the major supplier of food and agricultural products in the economy of Mexico. It holds approximately 90% of the share of the import market of Mexico. A number of the brand names of U.S. are recognized by the consumers in Mexico and they associate these brands with high quality and performance. Despite the downfall in the economy of Mexico, the market share of U.S. In the imports of consumer products of Mexico continued to be ninety percent of the total share, even though the overall market size and growth of this industrial sector declined by 40%. (The Heritage Foundation, 2014)

One of the greatest constraint that the exporters of U.S. face in the consumer ready market of Mexico is the low spending power of most of the consumers. However, as the economy of Mexico is growing constantly, it is estimated that there would be an evident increase in the purchasing and spending power of the middle and the upper middle class. This, as a result, would lead towards an increase in the purchase of the U.S. based products. This is because, these products are generally associated with high quality and health and the middle and the upper middle class prefer to by these products, especially the younger consumers who belong to this class. (The Heritage Foundation, 2014)

3.3.4. Competitive Analysis

The import market of Mexico is mainly driven by extensive price competition. The U.S. products, therefore, have to compete with both the domestic and the international products. The third world and the domestic products act as a completion because of their low prices. On an international level, U.S. faces major competition from Brazilian and Canadian product. This is because these countries hold a share 29.6% and 18.74% in the imports of cookies and crackers of Mexico. The organization, therefore, would deploy strategies that would tackle all the completion effectively. (The Heritage Foundation, 2014)

4. EXPORT STRATEGIES

4.1. Product

The organization will export 4 0z. packets of cheddar bunnies. The product is provided with a competitive edge over other products because of NAFTA. This is because, due to NAFTA the organization would be required to pay a few tariffs over the export of the…