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Caram, Carol
Della Martera, Matteo
Luque, Mara Victoria
Mathieu, Joaqun
Montanari, Simone Pgina 1


1. Executive summary.2
2. Country analysis...2
Economical environment.2
Cultural environment.3
Political environment.4
3. Legal restrictions..6
4. Industry Analysis.....8
Dairy and cheese sectors.8
Snack sector..9
5. SWOT Analysis....10
6. Strategic Marketing Decisions....10
Market Segmentation.10
Marketing Mix..11
7. Recommendations and conclusions...16
8. Appendix...........................................................................................................................17
9. Literature and references...18

GCPyMEs. 2013
Caram, Carol
Della Martera, Matteo
Luque, Mara Victoria
Mathieu, Joaqun
Montanari, Simone Pgina 2


Milkaut S.A. is one of the major dairy companies in Argentina. Established in Franck (Santa Fe)
with its headquarters, it owns other five production plants in the country.
The company produces many dairy products like milk, whey, butter, yogurt, dulce de leche, milk
cream and cheese. In the 2011, Soparind Bongrain, a multinational leader in the agri-food
sector, takes full control of Milkauts share capital.
Milkaut hold an important presence on international markets that comes from his historical
export-orientation. The company holds local sales for a 75% of their production and an
interesting 25% to foreing markets. Other brands of the Milkaut Group are Bavaria, Fransafe,
Santa Rosa and Adler. This last one is focused on processed flavoured cheese.
Milkaut wants to enter in Colombia with two products: the ADLER cheese that they already
produced in Argentina and another product that is a little variation of it like a snack, that we
called ADLER Time. Both the products will have the same brand ADLER.
The aim of this report is to analyze the Colombian market and evaluate the possibility, to enter
into the snack and cheese market with economic convenience and in this case suggest the best
alternative for a successful entry.
Firstly we have analyzed the Country to understand the main economical, political and cultural
features; then we have investigated the market and finally we have proposed the best
marketing mix strategy.

GCPyMEs. 2013
Caram, Carol
Della Martera, Matteo
Luque, Mara Victoria
Mathieu, Joaqun
Montanari, Simone Pgina 3

In this section you can find a broad analysis of macro factors of the Colombian market that can
have a relevant impact upon the cheese and snack markets. We use this section to describe the
tools we use to make a clear comprehension of these data.
We analyze the country from three different point of view to evaluate the attractiveness of a market:

The following parameters, divided by functional areas, have been take into consideration
because of the products are made for the population thus is important to know the size and the
structure of the market (DEMOGRAPHICAL DATA). National income plays a big role in how big
the sale of product are, above all for our products generally addressed to an high and middle
class, so we decide to investigate on social grade classification and Gini distribution of income.

o Population: 48.374.000
o Population Growth rate: 1.3%
o Major Cities population: BOGOTA (capital) 8,63 mln; Medellin 3,52 mln; Cali 2,61 mln

o GDP (Total at current prices in millions): 369813 US$
o GDP Per capita (PPP): 11000 US$
o Unemployment rate (2012): 11.3%
o Structure of total urban employed population, by category (2011): Employers 5.0% ;
Employees 45.5 %; Self employed 42.4%; Domestic service 3.9%
o Inflation rate (consumer prices 2012) : 3.2%
o ABC1/High Class: 11,30%
o C2C3/Medium Class: 45,70%
o Poverty Rate: 34,2% (2011)
o Distribution of family income - Gini index: 0.5

GCPyMEs. 2013
Caram, Carol
Della Martera, Matteo
Luque, Mara Victoria
Mathieu, Joaqun
Montanari, Simone Pgina 4

In the lasts years Colombia pursued aggressive economic policies to promote free trade
agreements. Real GDP has grown more than 4% per year for the past three years, continuing
almost a decade of strong economic performance. Moreover, the unemployment rate of 11.3%
in 2012 is still one of Latin Americas highest.

The behaviour of the consumers is getting more and more important, in particular for the
nutritional habits that can be influenced by cultural and tradition factors.

Colombian culture has a lot of differences than the other South American Nations, and it is
influenced by U.S. habits. This situation is taken into account by us, due to the fact that the
snack market in USA is one of the biggest worldwide, and they have different kind of cheese
Also, it is important to notice that Colombia, in recent years, carried out a number of high
impact economic policy in market linked to the promotion of free trade agreements, which has
strengthened its capacity to deal with the international economic situation. So, the Colombian
government, has encouraged the development of trade ties with other countries. In this
direction, In 1991 Colombia began a process of economic liberalization, increasing to 98% of the
tariff free import regime, lowered tariffs and implemented a series of rules and regulations in
order to place Colombia, from the Economically, legal and technical level with developed

We analyze the political situation because to have a stable market is important to know also
how much the government of a country is stable.

The political process in the country is disfigured by conflict and by armed, violent groups,
making the possibility of democratic participation extremely difficult.
The cause must be sought in its history, and in the great social and economic inequality. While a
few Colombian families are very rich, more than 60% of its population lived below the poverty
However, since 2002 the government has managed a string of spectacular successes against the
left-wing rebels, regaining control of much of the rebel-held territory and raising hopes that the
conflict may be drawing to a close.
GCPyMEs. 2013
Caram, Carol
Della Martera, Matteo
Luque, Mara Victoria
Mathieu, Joaqun
Montanari, Simone Pgina 5

The actual president, Juan Manuel Santos, insisted that he would continue the policies of
president Uribe, with a strong emphasis on combating the drugs trade and Farc. He has also
promised to develop the countrys infrastructure and to create more jobs, swearing to make
Colombians less dependent on the informal economy.
Even if the situation in the complex isnt good, Colombia is growing on and becomes a really
attractive Country.

GCPyMEs. 2013
Caram, Carol
Della Martera, Matteo
Luque, Mara Victoria
Mathieu, Joaqun
Montanari, Simone Pgina 6

In this section, we decide to analyze all the legal framework of Colombian market, first to avoid
any structural obstacle to our entry strategy in the market, but also to find some opportunities,
facilities or incentives that make easier the company activities in the market.

1) Nature of host /country political system: Accordance to Article 333 of the Federal
Constitution of Colombia: The economic activity of private enterprise is free, within the
limits of the common good. For your exercise, it might require authorization or requirements
before that are allowed by law
2) An assessment of political risk/ stability as it affects business prospects: The difficulties
found during the analysis of the competitiveness indicator, in previous years, demonstrates
devaluation and / or stagnation in infrastructure, market goods and institutions, the latter
two being the latest with low perception of local competition, effectiveness of law antitrust
and negative growth of health and basic education
3) Nature of judicial system: Colombia rules permit investment in the country to be more
viable because it has a National Competitiveness (SIC) solid (Lei 1253 of November 27, 2008).
However, the agricultural sector has excessive protections manifesting with high tariffs, such
as Sanitary and Phytosanitary Measures and Technical Barriers to Trade. Should highlight the
presence of the Board of Arbitration in the country, which is unofficial possibility for foreign
investors, that facilitates the resolution of litigious issues
4) Home country/ host relations: The Foreign Investment in Colombia showed a growing trend
thanks to macroeconomic stability, a successful policy of democratic security and a regime
favorable to foreign investment. Colombia offers the possibility of signing contracts legal
stability for investors, which gives them that against adverse changes of the rules that have
been supported in the contracts as "determinants of investment." It also gives them
continuity in the application of the same for a period 3-20 years. Proexport is the
organization responsible for commercial promotion of non-traditional exports, international
tourism and foreign investment in Colombia. Incomex is a Institute of Foreign Trade in
5) Summary of relevant legal restrictions: Food companies interested in starting business in
Colombia will come across some legal restrictions (Decree 3803/31 October 2006). They
needed to require authorities to approve some records, such as: Sanitary control aimed at
GCPyMEs. 2013
Caram, Carol
Della Martera, Matteo
Luque, Mara Victoria
Mathieu, Joaqun
Montanari, Simone Pgina 7

preserving human health, plant and animal. Agriculture and Livestock Colombian Institute
(ICA - CIRCULAR 49/2006 MCIT); National Institute of Food and Drug Monitoring (INVIMA -
CIRCULAR 75/2006 MCI); Compliance with technical regulations. Superintendent of Industry
and Trade (SIC - DECREE 300 1995)
6) Participation in international agreements: market agreements, patent & trademark
protection, political alliances: Colombia is a member of the Andean Community with the
objective of intensifying trade integration. The Colombia has a Free Trade Agreement with
the European Union and Peru (European Parliament resolution of 13 June 2012 on the Trade
Agreement between the European Union and Colombia and Peru). Regional Agreement
Concerning the Regional Tariff Preference - PTR (Agreement Regional No. 4), is a multilateral
agreement with the Latin American Integration Association (ALADI). Colombia belongs to the
World Trade Organization WTO, Madrid Agreement (Marks), and also to the World
Intellectual Property Organization WIPO
7) Other considerations as apparent and appropriate: Special rules about product label;
sanitary registration; Authorization Phytosanitary/ Zoosanitary; Registration of Brand;
Record of the importer are information that are in Appendix
It can be concluded that Colombia has been shown as a place of investment prospects because
of its geographical location and its economic growth. However, its legal system obliges
invested abroad to obtain various permits and implement no less tax and customs barriers to
be able to settle. However the Constitution of Colombia, almost at its end, Article 333, shows
that the path indicated the country is the free economic competition , causing the first to
settle have advantages over others

GCPyMEs. 2013
Caram, Carol
Della Martera, Matteo
Luque, Mara Victoria
Mathieu, Joaqun
Montanari, Simone Pgina 8


A relevant feature of Colombia is the third position in Latin America statistics of milk
consumption with sales around 3 billons dollars (Appendix N. 1).
The cheese market was valued in U$S 651 M in 2011. It has been growing since 1999 year,
when it valuated in U$S 250 M. The growth average is 7% by year. Each Colombian person has
1,2 kg per in average per year, but this trend is growing. Fresh cheese has a growth in the 343%
in order that the trend shows a progressive grown, increasing the interest of the market.
Innovations in the cheese process are very important for the sector. Every year, companys sent
to Germany, Italy and Denmark its engineers and specialized employees to update about
process, new technologies and knowledge. It requires investments and machinery. Colombia is
one of the technological leaders in South America.
Main companies
Alpina is a multinational food producer founded in Colombia in 1945 and it is based in Bogot,
Colombia. Now the company operates in Colombia, Venezuela, Equador and Estados Unidos.
Nestl SA was founded in Vevey (Switzerland) in 1866. In 1944 the company reached
Colombia. Today, the company headquarter is located in Bogota, and there are two other
factories in Bugalagrande (Valle del Cauca) and in Dos Quebradas (Risaralda). The company is a
leader in the production of healthy food. And operates in more than 150 countries with 468
industries distributed.
Colanta was founded in 1964 in Antioquia, Colombia. Today covers the line dairy, meat, fruit
juices, butter, cheese and others. The most important thing is that they are excellent
distribution channel. Its products can be found in various points of sale such as supermarkets,
convenience stores and others.

GCPyMEs. 2013
Caram, Carol
Della Martera, Matteo
Luque, Mara Victoria
Mathieu, Joaqun
Montanari, Simone Pgina 9

The savory snacks market consists of the retail sale of processed snacks, potato chips, nuts &
seeds, popcorn and other savory snacks.

The global savory snacks market has been growing at a stable, moderate rate in recent years.
This trend, is expected to continue towards the end of the forecast period.
The global savory snacks market had total revenues of $77.3 billion in 2011.
The market's volume is expected to rise to 10.9 billion kg by the end of 2016, representing a
CAGR of 3.3% for the 2011-2016 period. (Appendix N. 2)

The annual snack consumption in Colombia is of 1,9kg for person. Most snack consumed are
potato chips, assorted products are followed, then the extruded corn tortillas , peanuts ,
products manufactured with wheat flour and bananas. The 80 % of sales takes place in stores
and 20 % is in large stores and supermarkets.
Snack market in Colombia is represented by a variety of brands, domestic and foreign, and
amounts at 530 million dollars. The product differentiation is managing across the brand, the
packaging and the flavors.

These are the main competitors in the snack market:

Fritolay (Pepsi Cola Group Subsidiary). This Group has acquired other smaller companies like
Chunch, Great Colombia (Savoy group) and Pasabocas Margarita, who was his main competitor.
Following this strategy, Fritolay owns more than 60% market share , which represented in 2012
more than 318 million dollar 10.5% more than in 2011. Finally another important thing is that
Fritolay has a national coverage.

Comestibles Ricos (Super Rica) is the second most important brand, and in 2012 mades sales
totaling 56 million dollar, 12.5 % more than in the previous year. The strategy of this company
was through advertising and product innovation. This brand has a great position in the capital
(Bogot). It is relevant to note that in recent years have added new players such as La Victoria
which is Carrefour 's own brand , which has a modern processing plant in Bucaramanga.

Yuppi is another competitor in the market, which was sold to a California company Cloro that
makes household products.
GCPyMEs. 2013
Caram, Carol
Della Martera, Matteo
Luque, Mara Victoria
Mathieu, Joaqun
Montanari, Simone Pgina 10

In this section, we decide to use the tool of SWOT analysis for selecting only the most important
informations and strategical plan our decision making process.
This matrix is a support for strategic choices that permits to analyze a context or a problem by
four different and conflicting point of view, to avoid optimistic or pessimistic points of view


o 6 different cheese flavours and 7 different
cheese snack flavours
o Innovative and different packaging than
competitive products

o No brand recognition in Colombia
o Inexperience in Colombian market



o Very concentrated sales areas (Bogot,
Medelln and Cali)
o Progressive increase in dairy and cheese
consumption in Colombia.
o Adler cheese is according to consume
o Low taxes to exports to Colombia

o Many cheese competitors products
o Intense competition in snack market

GCPyMEs. 2013
Caram, Carol
Della Martera, Matteo
Luque, Mara Victoria
Mathieu, Joaqun
Montanari, Simone Pgina 11

In this section, we define the objective that the Company have to reach to obtain a good impact
on the Colombian market, then we define the segment or target that they want to achieve with
this strategy and finally we outline a Marketing Mix Strategy for explaining the steps

Objectives and strategy

Since Colombia represents a whole new market for Milkaut, the objectives to accomplish are:
o Obtain a competitive advantage: Based in differentiation features to create a high
perception level of the brand.
o Market development strategy: Introduce a leader Argentinean product in the new
Colombian market.
o Product development strategy: Introduce a product which substitute the established

Milkaut generic strategy is based on the differentiation. The keys of it are:

o Higher price than competitors, to create a high image perception of the brand
o Innovative and different packaging than competitors
o Many flavours.

Growth strategy it is define like a market development strategy, introducing a whole new line
of products in a new market. Milkaut is a new competitor for cheese market and also snack
market, so it is a main priority to create a high perception of the brand and of the company.

Market Segmentation

The segmentation is undifferentiated in both markets. This means that the target consumer will
be any person who belongs from ABC1 to C2C3 social class and wants to satisfy their food
needs. Cheese consume is very extended in Colombia and, also snack consume have been
growing a couple years ago.

GCPyMEs. 2013
Caram, Carol
Della Martera, Matteo
Luque, Mara Victoria
Mathieu, Joaqun
Montanari, Simone Pgina 12

Colombia population is about 48.374.000 people. ABC1 social class represents the 11,7% of the
total population, around 5.466.262 belongs to this one. Plus, C2C3 class is conformed by
around 22.106.900 people.

Marketing Mix

The products are the ADLER Time and the ADLER cheese. There are no substantial changes in
the package, except for the legal requirements. According to the Colombian Technical Norms
NTC 512-1(ICONTEC), the labels of the food must contain: product name, list of ingredients, net
contents and wrung weight, name and address, country of origin, identify the lot, date
marketing and storage instructions, number of sanity registration, nutrition facts table shall
include only the nutrients required and optional.

The Adler Cheese line is actually packaged in a triangle box composed by two portions of 50 gr.
The new Adler Time line will be packaged in a circle box which contains eight portions of 15

The flavours are:
o Adler Cheese Fontina flavor
o Adler Cheese Jamon flavor
o Adler Cheese Gruyere flavor
o Adler Cheese Salame flavor
o Adler Cheese Azul flavor
o Adler Cheese Fontina Light flavor
o Adler Cheese Clasico flavor (Only for the snack product)

GCPyMEs. 2013
Caram, Carol
Della Martera, Matteo
Luque, Mara Victoria
Mathieu, Joaqun
Montanari, Simone Pgina 13

The majority of the products in Colombian market are packaged in bags. Adler package their
cheeses in little boxes. This solution bring more protection and a distinctive characteristic. Plus,
it is helpful for flavour differentiation, the Triangle package shape for the two portion product
and the circle package shape for the eight portions product (ADLER cheese).

After conducting several studies in the Colombian market prices, regarding to the snack, the
gathered data says that the average price of the snack is USD $ 1,584 (100 gr) and, on the other
hand, the average price of the cheese to snack segment is USD $ 1,65 (100 gr).
So according with these data, the best price for the ADLER Time is USD $ 2, instead the USD $
2.19 that Milkaut has proposed.
Is important to enter in the market with a value slightly higher than the competition, in order to
impose the brand and the product as a quality product and differential.
About the traditional ADLER cheese, after conducting several studies in the Colombian market
prices, the gathered data says that the average price of the cheese is USD $1,02 (100 gr).
Considering that the company wants to sell the product at $ 1.76, would be suitable as market
entry strategy by imposing a quality product and differentiating from competitors.

Adler strategy are focused to enter in the 3 most populated Colombian cities: Bogot (8,63
million people), Medellin (3,52 million people) and Cali (2,61 million people).
GCPyMEs. 2013
Caram, Carol
Della Martera, Matteo
Luque, Mara Victoria
Mathieu, Joaqun
Montanari, Simone Pgina 14

According with the data analysis, the best way to purpose both products are
supermarkets/hypermarkets (44% of the sale stores) and independent retailers (43% of total
sale stores). Moreover for the ADLER Time, the vending machines localized in offices, streets,
clubs, Faculties, hospitals, are another important distribution channel.

The supermarkets and hypermarkets are:
o Carrefour
o Almacen La 14
o Macro
o Almacenes Exito
o Super Almacen La Olimpica

Inside the store, the product will be exposed in snack area, away from refrigerated products,
for giving a good image in which is not necessary keep refrigerated the product.
In Colombia, there are three main vending machines companies: Vending Colombia, Autosnack
and Mquinas Dispensadoras.


Since Milkaut has no presence in Colombian market, this is an important opportunity to enter
into the market with a carefully strategy. We suggest to the company that the first objective to
pursue is the awareness of the brand ADLER, like new option, new solution for daily break. We
think to avoid to invest in an expensive Promotion by television and oriented our promotional
activities to the point of sales, near to the impulsive buying decision moment, just for create
the idea of an innovative and NEW snack arrived in Colombia to satisfy consumers. "ADLER
Time" is new because propose 7 new flavoured cheese for Colombian market and because it
offer to consumer a large variety of choice, also in the same pack.
Also according to strong market tendence of "eat less, eat better", Less calories focus is
perfect for the adults that want pleasant snack without a lot of calories, for teenagers and adult
that want a less calories source of energy for their daily activities.

Point of sales promotion: About the position in the point of sales, we propose to exploit the
advantage that don't need to be refrigerated, to place the snack with the other salty snacks
position, and if possible near crackers or complement snacks. We suggest a flashy display (POS)
GCPyMEs. 2013
Caram, Carol
Della Martera, Matteo
Luque, Mara Victoria
Mathieu, Joaqun
Montanari, Simone Pgina 15

with a big clock of "ADLER Time" with a red/white dispenser and in the big supermarket also a
testing product point.
Billboards and posters from the parking of the supermarket to the displays and curious
floorgraphics (clock without white-red triangle) that drive the consumers into the shop.
The company can organize also innovative method of promotion like "guerrilla marketing" in
the point of sales with 3-4 guys that at "snack time" signed in the big "ADLER Time" clock and
begin watch our watch, hear an alarm in the store and run to the "ADLER Time" displays for eat
the snack.

Special Offers/Deals: this is one of the most effective ways to attract the attention of consumer
with different launch offers promotions like "Special Package Promotion", when you buy six
different pack you have the 7th savor pack for free, Sampling to offer a little portion of new
flavours and Gadget, like funny clock "ADLER Time".
These forms of communication have their own logic if they are integrated with a promotional
offer. They are useful for a new product to promote his knowledge and thus to stimulate the
habit purchase.

Packaging: Our proposal is to shift to a round/circularly package more practical for the 8 units
use (considered that one portion is 2 triangle at least) and for "on the go lifestyle". In adopting
this new package (element of innovation), anyway we mantain the traditional element of the
brand like the triangle second package (Fig. 1).

GCPyMEs. 2013
Caram, Carol
Della Martera, Matteo
Luque, Mara Victoria
Mathieu, Joaqun
Montanari, Simone Pgina 16

In front of the package on a red round the name of the new snack product "ADLER Time" like
the center of temptation and dashed the four package of the traditional product "ADLER
cheese" to maintain this link with principal product. For the claim same reflection, not a total
change of "El triangulito de sabor!" but according to the "new" focus, we suggest "El nuevo
triangulito de tentacin".

GCPyMEs. 2013
Caram, Carol
Della Martera, Matteo
Luque, Mara Victoria
Mathieu, Joaqun
Montanari, Simone Pgina 17

In the back side, we propose to insert in all the side a particular "ADLER Time" clock, a clock
that remember you to take a break, to allow you a sin, a temptation without more calories and
also some images of the use of "ADLER Time" snack to reinforce the concept.


After reviewing the best choice of the marketing mix, we can conclude that Milkaut can enter
both the snack market for cheese as in Colombia.
The best way to do it, is to implement a differentiation strategy, in order to recognize Milkaut
products by the others in the market, especially for the different flavors, innovative packaging
and a 20% expensive than the competition.
Both products are going to be sold in the three main cities of Colombia: Bogot, Medelln and
Cali. Their actually group the 30% of the Colombian population.
Relative to the snack price we recommend that its cost will be around 2 dollars, and no more.
As for the traditional cheese although the price is a little higher than the competition, are in
relation to the recommended strategy.
Considering the best and cheaper distribution strategy, our proposal is to use an importer
located in Colombia. For us it is the best option because Bongrain Group are actually working
with a local importer and it is capable to supply all the sales stores.

Another option could be the direct importation but we believe that it is not appropriate at least
in the first three years because we dont know how much impact both products will produce.
Moreover, Milkaut and Bonraing Group havent any kind or agreements with the retailers.
GCPyMEs. 2013
Caram, Carol
Della Martera, Matteo
Luque, Mara Victoria
Mathieu, Joaqun
Montanari, Simone Pgina 18

Finally in relation to the promotion of the products is important to perform it at the points of
sale. The promotion strategy, especially for the snack, should be focused on the presence of
low calories, various flavors and a different package than competitors.


GCPyMEs. 2013
Caram, Carol
Della Martera, Matteo
Luque, Mara Victoria
Mathieu, Joaqun
Montanari, Simone Pgina 19

Central Intelligence Agency The World Factbook section: Colombia
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El mercado de Alimentacin en Colombia ICEX, July 2013
Informe Econmico y Comercial: Colombia. Oficina Econmica y Comercial de Espaa
en Bogot, March 2012
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Della Martera, Matteo
Luque, Mara Victoria
Mathieu, Joaqun
Montanari, Simone Pgina 20

Estudio de Inteligencia Competitiva de la cadena lctea colombiana en dos productos
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Magda Sonia, Universidad Nacional de Colombia, Bogot, 2010
Maps of World: Colombia Culture. http://www.mapsofworld.com/south-
Econcifras http://www.econcifras.com/
Datamonitor 200911. http://www.proexport.com.co / proexport@proexport.com.co
Portal Lechero Magazine, 26/08/2013
TradeMap. International Trade Centre. http://www.trademap.org/
Revista IAlimentos, Edicin 8
Datamonitor 200911 http://www.proexport.com.co / proexport@proexport.com.co
TradeMap, International Trade Centre http://www.trademap.org/
IAlimentos Magazine, Informes Snacks: El mercado de losSnacks, Edicin 11 (2013)
El mercado internacional en Colombia Polo Bastards, Fernando, Oficina Econmica y
Comercial, Embajada de Espaa, Colombia, ICEX 2013
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