Samuel Adams' market entry and promotional strategy for Argentina

Marketing

Preliminary Marketing Plan:

Introducing Samuel Adams to Argentina (CIA World Fact Book, 2004)

Preliminary Marketing Plan:

Introducing Samuel Adams to Argentina

The Marketing Plant:

Marketing Objectives

Our marketing strategy will be based on studies of the market segments with possible joint ventures.

The market segment is highly literate and the GDP per capita purchasing power is approximately $11,000 U.S.. Argentina benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector, and a diversified industrial base."

We will use the fact that Boston Beer has won over 500 international awards for its better-tasting beers such as Samuel Adams Boston Lager® and our target markets will consist of urban and rural bars, liquor stores and all levels of liquor licensed restaurants.

We aim to sell to the male and female beer and current wine drinking population in both urban and rural markets. l see where marketing efforts and word of mouth are working and thus we will be able to observe the benefits of the product

The objective it first establish urban market shares and work outward to the rural community through marketing and word of mouth campaigns.

We aim to provide sufficient quality to maintain our products reputation.

Product adaptation or modification

The beer will be condensed for shipping and rehydrated once in country at local bottling plants.

The beer will continue to be the same high caliber product sold in all of our markets.

The bottling process will be the point of quality control.

Promotion Mix

The nation has 42 Television broadcast systems as of 1997 and internet use is nearly a million strong. The nation's radio stations are mostly unlicensed: "AM 260 (including 10 inactive stations), FM NA (probably more than 1,000, mostly unlicensed), shortwave 6 (1998)." (CIA World Fact Book, 2004)

Advertising - Argentina has a modern telecommunications and media market systems. There is a great deal of foreign investment incorporated into the systems.

A objectives - to start a successful program of television, newspaper, magazine and word of mouth advertising to build product support media mix

Video-clips and commercials on major TV-channels for all major Argentinean cities placing advertising blocks in stylish magazines and newspapers

Place a colored and stylish advertising sheet in the centers of major city's bars and department stores of our target markets.

A message - We will use the fact that Boston Beer has won over 500 international awards for its better-tasting beers such as Samuel Adams Boston Lager®

Costs will be established upon a thorough marketing assessment and pre-negotiations. The objective is to saturate the market at minimal cost.

Sales Promotion

Objectives to advertise our traditional beer product for segment customers according to questionnaire,

Coupons - Tasting contests and bar and store give away's

Premiums - in addition to promotional bonuses for bar keeps and bar owners for meeting sales objectives established per market.

Costs will be established upon a thorough marketing assessment and pre-negotiations. The objective is to saturate the market at minimal cost.

Provide incentives for word of mouth promotion for all bar keeps and bar owner.

Distribution: from origin and destination

Port selection

Origin port - we have a well established export process in place out of the Boston location and it will serve as the point of origin.

Destination port - the largest target market and the most reliable in country transportation process originates in our destination port of Buenos Aires.

Mode selection:

Ocean carrier - the product will be shipped by the most advantageous method which is currently via ocean carrier.

However, the process and route tables will continually be evaluated to ensure we receive the most cost effective process for shipment

Flying the product is faster but our shipping methods allow for slower modes of transportation.

Railroad - once in country, the barrels or other shipping containers will be shipped between dock and originating warehouse by rail.

The nation has a very reliable transportation system in the urban extremities. From the ware house locations the product will be moved by rail to the city's warehouse locations and by ground via motor carrier to mountain and rural areas.

Freight forwarders

We will utilize an external team to assist us in preparing price quotations and advising us on reasonable freight costs, port charges, consular fees, costs of special documentation, insurance costs, and their handling fees.

A warehousing

We will use only bonded warehouses so as to maintain control over use of money until the duty is paid upon withdrawal of merchandise from the bonded warehouse. If no domestic buyer is found for the imported articles, the importer can sell merchandise for exportation, thereby canceling his obligation to pay duty.

Foreign Sales Corporation - to take full advantage of the federal income tax on our export-related income, we will establish a FSC.

The sole purpose of this venture will be foreign tax incentive for replaced domestic international sales

The tax exemption can be as great as 15 to 30% on gross income from exporting, and the expenses can be kept low through the use of intermediaries who are familiar with and able to carry out the formal requirements.

A price determination:

We will utilize the export price with the cost-plus method. The calculation starts with the domestic manufacturing cost and adds administration, research and development, overhead, freight forwarding, distributor margins, customs charges, and profit.

Price will be determined by:

Our projected sales

Actual cost of the export.

Market demand and competition which will also include "nonmarket" costs like tariffs and customs fees

We will exclude cost elements that provide no benefit to the export function such as domestic advertising.

The trip from Boston to Buenos Aires we will incur CIF (cost, insurance, freight) to a named overseas port where the we the seller will quote the price for our goods (including insurance)

This will include all transportation and miscellaneous charges to the point of debarkation from the vessel.

For intermodal exports such as bottling factory equipment we will utilize CPT (carriage paid to) and CIP (carriage and insurance paid to) in place of CIF for all modes of transportation including intermodal.

A in some negotiations we will use FOB (free on board) for bottling plants that purchase from us directly at a buyer named port of export where we quote the buyer a price that will cover all costs up to and including the loading of goods aboard a vessel.

Pro Forma Invoice - During the initial export transaction, we will utilize the pro forma invoice.

Pro forma financial statements and budgets marketing budget selling expense

Actual selling expense 6/30/2004 $0

Projected selling expense 6/30/2005 $450,000 advertisement promotion expense

Actual advertisement expense 6/30/2004 $0

Projected selling expense 6/30/2005 $150,000 distribution expense

Actual distribution expense 6/30/2004 $0

Projected distribution expense 6/30/2005 $104,000 product cost

Actual product cost 6/30/2004 $0

Projected product cost 6/30/2005 $4.50

Pro forma annual profit and loss statement (first year and fifth year)

Projected profit and loss statement 6/30/2009 $235,000

Projected profit and loss statement 6/30/2009 $340,000

PERIOD ENDING 27-Dec-03 28-Dec-02 29-Dec-01

Total Revenue 207,945 215,355 186,783

Cost of Revenue 85,606 88,367 81,693

Gross Profit 122,339 126,988 105,090

Operating Expenses

Research Development

Selling General and Administrative 106,469 115,320 93,653

Non-Recurring

Others

Total Operating Expenses

Operating Income or Loss 15,870 11,668 11,437

Income from Continuing Operations

Total Other Income/Expenses Net 1,104 2,423 1,791

Earnings Before Interest and Taxes 16,974 14,091 13,228

Interest Expense -- 11

Income Before Tax 16,974 14,091 13,217

Income Tax Expense 6,416 5,538 5,384

Minority Interest

Net Income From Continuing Ops 10,558 8,553 7,833

Non-recurring Events

Discontinued Operations

Extraordinary Items

Effect of Accounting Changes

Other Items

Net Income 10,558 8,553 7,833

Preferred Stock and Other Adjustments

Net Income Applicable to Common Shares $10,558 $8,553 $7,833 (Yahoo Finance, 2004)