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Export policy plan for Tchibo : exploring the Mexican market

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Export policy plan for Tchibo : exploring the Mexican market

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Samenvatting

Tchibo is an international retail, coffee and consumer good company. Throughout the company´s history a unique business concept combining coffee expertise with a weekly changing range of consumer goods was created.
This paper aims to analyse and outline the market characteristics of the Mexican market and to evaluate the opportunities and threats Tchibo faces when entering the Mexican market. Therefore, the main purpose of this plan was to answer the following question:
Is the Mexican market interesting for Tchibo products and what does Tchibo need to consider if they want to enter the Mexican market?
In order to answer this question adequately, several important aspects, which are of major importance in the decision-making process had to be looked at. The following outcomes are presented in this report:
The Internal Analysis of Tchibo displays its strengths and weaknesses; from this chapter the conclusion is that Tchibo is ready to enter new markets, even though the brand image is not known internationally and Tchibo only has little experience on the international market. However Tchibo offers a worldwide unique three-in-one-store model with its distinctive 'Every week a new Experience' marketing concept. Tchibo has great know-how in the coffee and consumer goods business and established over the years good business relations to cooperation partners and suppliers, therefore Tchibo can offer high quality products at a low price.
The External Analysis of the Mexican Market investigates its accessibility. The findings in this chapter are that Mexico has an accessible market and that Tchibo concept could be successfully introduced in the Mexican market. One of the main reasons is that Mexico has the best economic performance in Latin America and a stable political situation. Besides, the Mexican household income and demand for consumer goods will rise in the future and e-commerce and the franchise industry have growth potential. Furthermore, there are no direct competitors in the Mexican market and future coffee consumption may increase. However, companies often underestimate the size and diversity of the country and the Mexican market. More challenges for exporting companies include a currency risk and a possible loss of profit due to high corruption. Besides, the Mexican coffee consumption is rather low and there is fierce competition in the coffee and consumer good market. Nevertheless, the opportunities prevail.
The SWOT Analysis has linked together all the findings of the internal and external analysis and has lead to several strategic options, which can help Tchibo to succeed in the Mexican market. However to compensate the company's weaknesses, a good option would be to enter the Mexican market via joint venture or franchise. The internet can be used as a distribution and marketing channel. Furthermore a marketing campaign is essential. In addition to keep the risk low a first launch in a test market could be an alternative. The core business should be the three-in-one-store model. Nevertheless Tchibo needs to be aware of the risks and monitor them close.

The strategic options have formed the basis for the elaboration of the Marketing Mix. The eight P's in the marketing mix led to the following advices:
Product: Use the same consumer goods assortment as in Europe but test suitability in advance by contracting an external local research firm. The coffee range offered should be distinctive from local products; an option would be the exclusive coffee range.
Promotion: Television and radio advertisement should be used to create a brand awareness, to communicate the core benefits and to create the special 'Tchibo niche'. Store promotions and internet marketing are other promotion tools which could be used.
Place: Mexico City would be a good geographical area for a test market and the perfect location for Tchibo stores is in shopping malls. The target could be to open eight franchised Tchibo stores within one year and if these stores are successful, Tchibo could launch its concept nationwide.
Price: Use the penetration pricing strategy and make sure that in all distribution channels the products are offered for the same price.
Physical Distribution: Tchibo can operate from its basis in Germany; a representative who travels on a regular basis to Mexico and an external operated warehouse in Mexico is could provide the distribution structure needed.
Presentation: The presentation of the products should be according to the worldwide standardized Tchibo store concept.
People: An internal employed representative could who create good business relations with the Mexican business partners, such as the franchisee, joint venture partner, external warehouse or external marketing research institute.
Politics: It should be ensured that all products are labelled according to the packaging regulations.
In the last part Personal Opinion and Findings my own view is stated (after living for 5 month in Mexico). I am confident that the strategies and advices presented in this report will contribute to the success of Tchibo entering the Mexican market.

Toon meer
OrganisatieDe Haagse Hogeschool
AfdelingESC Hogere Europeses Beroepen Opleiding
PartnersTchibo (koffie en gebruiksartikelen)
Jaar2008
TypeBachelor
TaalEngels

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