Gallo rice
...Meta'Tempo. Consumers perceived Meta'Tempo to be superior to simple parboiled rice. Some thought that the product could be the base of a whole new dehydrated product line. Therefore, Gallo anticipated that launching a new product will help Gallo to smooth transition from existing or diminishing increase returns to scale of Gallo's rice product to a new product lines, and thus expanded its market share. Argentina Sales of Gallo branded rice in Argentine was $30 million between April 1991 to March 1992. In 1991, Gallo held a 17.5% volume share and a 23.7% value share of the total retail rice market. Also, Gallo held a 48% share in Greater Buenos Aires, which consisted of 30% of Argentina's population. In Argentina's rice market, Gallo was the market share and product innovation leader. Four major types of rice sold in Argentina are: 'Gallo Grano Largo Fino and Gallo doble', 'Gallo Oro', 'Gallo Integral', and 'Gallo Risotto'. 'Gallo Grano Largo Fino and Gallo Doble' accounted for 28% of Gallo's sale by volume in 1991. 'Gallo Oro' accounted for 59% of Gallo's sales volume. 'Gallo Integral' accounted for 5% of Gallo's sales volume. 'Gallo Risotto' accounted for 87% of Gallo's sales volume. Distribution Most of Gallo's retail sales were through supermarkets. Gallo was weaker in the medium and smaller stores. 90% of sales were made through a company sales force, and 10% was sold through agents. Opportunities Gallo needs a special strategy due to the downturn of Argentina's economy. Gallo might want to introduce new products with low prices to price sensitive customers and do more advertising to make consumers more aware of Gallo products. One of the products which might be beneficial to introduce is the Meta'Tempo quick cooking rice since this product is easy to prepare, and time-saving. To boost consumer awareness of Gallo's new product and to match Maximo's level of advertising, Gallo might want to spend more of their resources on TV, radio, and print advertising. To successfully advertise Meta'Tempo, Gallo should stress ease of preparation and low price. This will help Gallo to expand their market share in Argentina, and also increase the awareness of Gallo's new product. As the economy stabilizes and consumers' awareness of Gallo's product increases, Gallo can raise up the price to increase profit margin, and eventually introduce more varieties of parboiled and white rice. Poland Gallo rice was sold in 200 Pewex shops in packages. "In 1991, with Pewex in decline, Arrocera's agent established a private distribution company, Argentyna Ltd., to import and distribute the products he had previously handled for Pewex. Between March 1990 and January 1991, 59 tons of Gallo Oro and 9 tons of Gallo risottos, both imported from Argentina, were sold through Pewex. From February 1991 to February 1992, 70.5 tons of Gallo Oro parboiled white rice were imported exclusively through Argentyna Ltd." In 1992, Argentyna Ltd. distributed 65% of Gallo's product volume directly to retailers in the Warsaw area, and the remaining 35% of sales were made through four secondary distributors that served Krakow, Sczeczin, Poznan, and Lodz. The Gallo brand, which accounted 30% of all grocery sales volume in Warsaw and in 5% in Poland, was available in 200 supermarkets and upscale grocery stores. Opportunities After political changes in Poland, the Polish market seems to have strong potential for rice market. Consumers started to recognize its branded rice products. In Poland's case, Gallo should make aware to the consumers that Gallo's product is superior to other cheaper brands, especially the German, Belgian, and other unbranded rice of which 95% of market consists. Since Polish consumers do not have an understanding of the different types of rice recipes and use rice as a substitute for potatoes, Gallo might want to spend a lot of money to introduce different types of rice recipes as a promotion for buying Gallo products. This would grow the market and increase awareness of Gallo rice. Gallo might also want to introduce more sophisticated rice products such as long-grain Patna, long-grain brown, and dehydrated long-grain. 3. What similarities and differences do you see in the three markets and in Gallo's approach to them? Italy Unlike the Polish market, Italian rice markets mainly consisted of big players like the Flora, Cuti-Buitoni, and Scotti national brands. Flora held 41% volume share of Italian parboiled market, Curti-Buoni held 10.2% and 5.6%, respectively, of volume share of white rice and parboiled rice, and Scotti held 7.5% of white rice. Gallo's Approach Gallo's Naturitis company produced dehydrated quick-cooking rice and supplied both BSN's Flora rapido and Gallo's Blond Meta'Tempo. "Gallo's Meta'Tempo was launched as a free standing product in 1990, but had to be withdrawn due to poor sales and the high cost of promotional support. It was quickly repositioned within the Blond line and, by 1992, sales of Meta'Tempo equal those of Rapido." Here, Gallo's approach to compe...