Pttys Dots Export import group project

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Pöttyös Dots- Export - import group project -

• Developped by Nicolas
  Barrale
• István Nagy
• Jeremy Vanderwaeren

2
Table of contents

• Why?
• What? Product description
• Where? Belgium
• To whom? Consumer profile
• How? Marketing strategy
• Legal requirements
• Risks
• Return on investment

3
Executive summary

• Export to Belgium 3638 selling points
• The product chocolate bar Dots
• Target 12-24 years old
• Price 0,65 EURO
• Profit first year 70K EURO
• Profit after 5 years 2.6 million EURO

4
Decision drivers

• Great success in Hungary for 40 years
• Recent impressive international development
• Slovakia
• Romania
• Gateway to enter other Western markets
• Infrastructure and powerful partners in the
  market
• Growing demand for healthy snacks

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PRODUCT
- History -

• The idea
• Comes from Moscow
• Sweet chocolate bar filled with lemony cottage
• The name (by Sándor Klein)
• túró curd cheese
• rudi (rúd)bar
• Launching
• Original Pöttyös Túró Rudi Classic from 1968

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PRODUCT

• - History -

• 3-day expiration time
• Sales skyrocket consumers cant get
• enough of it
• Few competitors appear in the market
• Pöttyös is the real thing
• Producer
• Szabolcstej Rt.
• - Budapest (1968), Nyíregyháza (1969)
• - Mátészalka (1970-)
• - Nagybánhegyes (1979-1991)
• Friesland Foods
• - Mátészalka (1999-)
• - Internationalization of Pöttyös DOTS

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PRODUCT
- Ingredients -

• Low fatty curd cheese (42)
• Toping made of cacao (36)
• sugar, hidrogenised vegetable butter
• cocoa powder
• E322 partially hydrolysed lecithin
• natural-equivalent vanilla aroma
• Sugar
• Butter
• Modified corn strach (E1412)
• Natural lemon aroma,
• Preservative potassium sorbate (E202)
• filling cream depending on the flavour
• Expiration time 18 days.

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PRODUCT
- Range -

• Dots
• Classic (30g)
• Hazelnut
• Milky
• Strawberry
• Apricot (ROM)

• Pöttyös
• Classic (30g)
• Apricot
• Coconut
• Hazelnut
• Milky
• Raisin
• Raspberry
• Strawberry
• Double
• Giant (51g)
• Bonbon, Exactly 2

Lot sizes 1, 5, 51, 62, 71, 10
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PRODUCT
- Production costs -

• Estimation
• Lowest end user price in Hungary 59 HUF (0,22
  )
• VAT 25
• Retailer margin 25
• Transportation 4 HUF/unit
• Production costs(promotion included)27 HUF /unit
  (0,10 )

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Belgium demographics
Source CIA Factbook
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Belgium 3638 distribution channels

• Besides those big players that account for 1 888
  selling points we will focus on 500 newspaper
  shops 50 vending machines, 200 24/7 shops, 1000
  gas stations
• Delhaize largest chain 738 stores

Arms length strategy
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The cooled vending machine of Pöttyös

• Will be adapted for the Belgian market

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Consumer profile

• Between 12-65 years old
• Majority 14-24 years old
• Consumption between meals
• 22 consumption after 8pm
• University students 81 (fascinatedAddicted)
• All categories of society
• Emotional fulfillment women

Source Data from Institute of Cocoa and
Chocolate (ICC), 2006
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MARKETING STRATEGY
- Objectives and information sources -

• Objectives
• Efficient penetration!
• Attract customers
• Profit first mover advantage
• Information sources
• Frieslands business experience (HUN, ROM, SVK,
  ITA, SPA, GER)
• Market analysis
• Market research

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MARKETING STRATEGY
- Investment decision drivers -

• Feasibility
• Costs of penetration
• Return on investment forecast
• Profit forecasts

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MARKETING STRATEGY
- Organisational strategy -

• Ensure a special attention on the Belgian market!
• Outsourcing field account activities such as
  sales promotion (Hamilton Bright BVBA )
• Hiring new sales manager

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MARKETING STRATEGY
- Product strategy -

• Limited range!
• 4 flavours
• Classic
• Milky
• Hazelnut
• Strawberry
• other flavours from the second year
• 3 lot sizes
• 1
• 6 (51)
• 10 (91)
• special 4 mix and other lot sizes from the
  second year

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MARKETING STRATEGY
- Price strategy -

• Lower price than the competing products!
• Expected end user prices price
• supermarkets 65 eurocents
• smaller shops 75 eurocents
• 24x7 shops 80 eurocents
• vending machines 80 eurocents
• cinemas 0,95
• gas stations 0,95
• Lot size price policy
• single product 0,65 /unit
• 51 0,62 /unit
• 91 0,59 /unit

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MARKETING STRATEGY

• - Price strategy -

Marketing and Belgian labor costs are excluded.
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MARKETING STRATEGY
- Placement strategy -

• Arms length availablity!
• Supermarkets
• Smaller shops
• 24X7 shops
• Petrol stations
• Cinemas
• Vending machines
• Distributors must provide the capability to keep
  the products cold.

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MARKETING STRATEGY
- Promotion strategy -

• Attract customers!
• Defining the message
• Magic dots symbolize vitality
• Special experience of consumption
• Healthy due to high milk and vitamin content
• Appetizing delicious speciality
• Special and exceptional sweet dessert
• Dots name covers high quality products consist
  of high quality ingredients
• Dots is available in 4 different flavours

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MARKETING STRATEGY
- Promotion strategy -

• Posters in 9 cities
• P-O-S demonstrations and displays in 628 stores
• Discounted prices according to the purchased lot
  size
• Advertising on television (JIM TV, VT4)
• Public relations
• Scientific articles in family magazines
• Develop Dots official web page
• Sziget Festival in Budapest
• Belgian music festivals
• Eye catching vending machines
• Promotion in universities

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Competition product

• Kinder Bueno
• Made by Italian company Ferrero
• Since 1990
• Kinder children in German
• Bueno good in Spanish
• Much less content of milk less healthy
• Only in package of 2 and 6 bars

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Export-Import legal requirements

• Transportation within EU is not officially
  regarded as export-import.
• The CE mark is necessary to assure that the
  product meets the requirements.
• Guarantees free circulation in the European
  Market.
• Essential to comply with labeling and packaging
  regulations

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Labeling and Packaging

• Printed in Dutch and French language
• Clear and easy to read
• Essential information should be given in a font
  size of at least 10 points
• Name of the product, lists of
  ingredients, expiration date, storage conditions,
  etc
• Information for moving the goods safely and
  hygienically
• Authorized material for packaging

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Export riskassuming elasticity of -1,5

• Depreciation of forint July HUF 234
• October
  HUF 280
• Price Pottyos 16,4
• Kinder 19,7
• Sales
• Belgium/Hungary 9.835.000 bars
• 
  HUF 1.494.920.000
• Belgium 2.460.000 bars
• HUF 373.920.000

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Exchange rate history of the Hungarian forint
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Economic forecast

• Belgium
• strong local currency
• predictable future
• inflation at beginning 2008 global
  crisis
• Hungary
• weak local currency in 2010
• declining inflation rates
• falling interest rate

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Financial analysis
Break-even Units per store / day 7 - 8
Break-even points 9,8 - 10,5 9,7 10 10,8
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Evolution turnover and cost of goods sold
Less marketing costs in Y3 , parallel evolution
for 5 years, tendency for COGS to decrease ?
economies of scale (production cost)
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Evolution TO and OI
Evolution of the profit margin 1,6 - 12,2 -
30,6 - 33,1 - 36,1
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Conclusions