Goya foods Essay

Started in 1936, Goya food is more famous in the American market where it has targeted the diverse Hispanic market the in the new markets it is targeting. With its headquarters in Secaucus, New Jersey the company deals in canned foods and other food products such as juice and cooking oil. Some of the major brand names in the market are extra virgin oil, Paela, Adobo and an assortment of designed recipes and mixes for the market. These products are spread out in four major industries †¢ Bakeries †¢ Beverage manufacture and bottling †¢ Coffee and tea manufacturing Fruit and vegetable processing †¢ Meat and food products processing †¢ Cereals and other foods processing Conrad Colon, the group’s marketing director says that the idea behind their vesting into different food products such as beans and rice is to transform ordinary products to Goya specials (Luther, 2008, pp 69). Ranked number 366 in the Forbes magazine largest private companies the company has shown that it is on its way from climbing form the small enterprises category to one of the top 20 multinationals. The firma has grown over time in size and form. At the moment the company is using its success in the American and South American market as a motivation to launch its products in the Asian market such as Singapore and Taiwan, Malaysia and Hong Kong otherwise known as the Asian tiger economies. These economies are currently experiencing very high economic growth. Consumer spending is on the rise as the welfare of the society improves (Thang, 2008, pp 28). Competitive analysis Goya Foods is to enter the market at the height of its success as a brand offering something more than the common. Its brand is synonymous with creativity in recipes (Luther, 2008, pp 67). In addition to this, Luther (2008 says that the company has transformed canned beans to more than canned beans to Goya beans. He notes that this is the notion that the company is riding high on: brand identification with quality and customer loyalty. Goya Foods, which had revenues of $713 million last year, has become synonymous with Hispanic packaged products of every persuasion. He cites the case where retail outlets and supermarkets have transformed form labeling Hispanic food aisles as so to Goya foods. This is against the traditional labeling systems where aisles are labeled as â€Å"Asian foods†. Of this, Conrad says â€Å"We have been selling our products for 60 years, so that some of our products, like our black beans, fruit nectars and olives, have become part of the culture†. The company has reciprocated this embrace with recognition of Hispanic culture such as celebrating the Puerto Rican Day Parade in New York. Advertising and promotion is done both in English and Spanish even in their websites (Telvin, 2006 pp110) Moving on to the culturally rich market could then be a turning point for the company and the market if the entry to the market is well strategized and the timing is correct. This gives the company a competitive advantage in that the markets in Asia have traditionally been shaped by the Asian culture. Making a move into the market would appear to critics as â€Å"banging your head on a wall. † This is more so because China has dominated the processed foods market in China and has manage to penetrate the US and European market. The strength of this growth in the market for Chinese products is pegged on low pricing other than brand name and quality. However, Colon sees this as a marvelous opportunity to challenge the status quo and introduce another culture in the market. He believes that the same cultural experimentation that has taken place in the US can be replicated in Asia using the right marketing strategies. He says their strength lies in the identification of the company’s brand name with Hispanic culture which is very important in targeting the culturally adventurous market in that region. Therefore, Goya’s entry into the Asian market can be viewed as a cultural export form the Hispanic world. Telvin (2006, pp112) sees that the 2005 donation by Goya foods to tsunami victims in South East Asia as courting strategy in the region before the marketer makes a lurk into the market. Goya Foods recognizes their major competitors in the American market are Del Monte, Can Agra and Kraft foods as shown in the company’s website. Del Monte is one of the largest competitors with a global presence well represented in Asia by its Del Monte Pacific branch. The growth of this Pacific branch serving the Asian and American market has been experiencing double digits growth since the turn of the millennium. Former Chairman of Del Monte Pacific, Tony Chew says that the company’s 100 plus years presence in the industry has created strong brand name for the company whose regional head marketer attributes to â€Å"leveraging our strengths in production, marketing, and distribution, and expanding our business through synergistic alliances or strategic acquisitions† One of the integration alliances are with the Cadbury Schweppes in US, Nabisco in Canada and Seven-up. Such alliances combined with an experienced management, strong financial base from shareholders and a long history has contributed to the company’s labeling as â€Å"one of Asia’s highest value creators† This has created a kind of market entry barrier in the market with a lot of customer loyalty and strategic alliances forming the base of the barriers. Industry forecast The bakeries industry as on of the very competitive market is expected to grow by 5% in 2009. This is a significant rise after the decrease in consumer spending hurt the market with estimated growth for 2008 only expected to be 2% in the American market. The growth will steady up to around 4% in the next four years as per market predictions. Colon attributes their continued growth and dominance in the Hispanic American market to â€Å"knowing the Hispanic market better than any competitor† through market research. Given that there exist many of opportunities in a country like Malaysia, good market research in the country should be expected to yield good results. According to an industry report on the status of the processed food industry in Malaysia the industry has a lot of opportunities short listed as flour based products such as pasta, biscuits, pre-mixes, frozen pastries and chocolate confectionery †¢ cereal-based products such as breakfast cereals, muesli and rolled oats †¢ pure fruit juices, orange juice concentrates, frozen vegetables, edible nuts and canned fruit †¢ condiments, seasoning and sauces †¢ nutritional snacks such as fruit rolls and yoghurt bars †¢ health foods and bars †¢ halal-processed meat such as corned beef CanAgra as a competitor to Goya deals in brands such as Rosarita, Blue bonnet and Gilroys foods is already making a gradual exit from the Asian market after years of disappointing sales by cutting operations. With an extra room created by CanAgra, Goya can enter the making to have a share of the profits. Canned, frozen food processing industry is experiencing good growth despite the fall in this year’s consumer spending which has hurt sales across all industries. This industry is expected to register a increment of 1% to 5% from last year’s and maintain the same in 2009. Subsequent years are estimated to see the industry fall back to 4%. This increase in growth is largely tied to increase in population. In addition, India’s processed food industry is growing at an average of 12% per year. Such opportunities exist for companies such as Goya to make full use of by venturing into the market. Goya’s product strategy Recognition of culture as the main selling pint by the company has been put into full utilization through market segmentation by culture. Goya recognizes that eating habits from one cultural grouping to the other changes a lot. Therefore the company has realized the need to satisfy all markets by segmenting the niche markets and developing specific products for that market. According to a link in the company’s website http://www. goya. com/english/recipes/recipe_category. html? id=6 the markets are divided into four major categories. These are Mexico, Central and South America, Spanish and the Caribbean. In each market there are various products in form of recipes that are unique to that market only. However, the aspect of cultural exchanges does allow variety in that cultural experimentation through Goya products is facilitated. The company has strategically made use of promotional and marketing campaigns that are well publicized. Alliances with traditional supermarkets and large retail outlets have helped in product placement as a form of advertising. In addition, the fact that Hispanic foods are all being labeled Goya is working well for the company’s policy. However, the same labeling can lead to loss of market. Poor quality products meant for the Hispanic market can be viewed by the market as belonging to Goya which is not the case and hence the company loses customer loyalty on the basis of poor quality products. This would d be against the company’s slogan: If it’s Goya, it has to be good. Profitability and budget analysis Increased commodity prices and decreased consumer sending has for the better of this year proved problematic to marketers. In a bid to remain afloat, Goya and her other industry competitors were forced to increase their prices. Therefore, as Kraft foods admitted their increase in profits this year was partly due to a 7% increase in the prices of their products. Again, going by the same argument, the target of Goya hitting the $1 billion mark this year in sales is definitely going to be a reality (Thang, 2008, pg 27). Del Monte as the other competitor has also reported profits at 11. 1%. Given that all the industries in which Goya operates are estimated to be on the rise ceteris paribus, then the market share for Goya in particular and to all the players in the industry is going to increase in the near future. Marked by such an increase in sales and profits, Goya is increasing her expenditure on marketing and promotional activities. Last year the company reportedly tripled its marketing budget to counter market encroachment by competitors. Again, there have been increased sponsorship and philanthoppy activities by the company. As a result more Americans in addition to the Latinos are turning to Goya foods for an alternative to the traditional American food to more stylized processed food.