Published on February 26, 2014
BOP Marketing Plan for “Latea Peru” Marianna Pardi Juliana Cabal Sugita Yoshitaka Raul Manrique Pablo Narvaez Joao Rendon Marketing at theBOP final project
Agenda The opportunity Our proposal Expected outcomes
BOP at Perú PERU 30,4 MM people NO BOP 22,6 MM BOP “consumer” 5,9 MM Extreme Poverty 1,9 MM BOP 7,8 MM By province…. Lima Piura Cajamarca La Libertad Puno Loreto Ayacucho Ancash Lambayeque Junin Cusco Huánuco San Martin Huancavelica Apurimac Amazonas Arequipa Pasco Ica Ucayali 24,1% 8,6% 8,2% 7,4% 5,4% 4,9% 4,4% 4,1% 4,1% 4,0% 3,6% 3,4% 3,3% 3,0% 2,6% 2,2% 2,2% 1,5% 1,0% 1,0%
BOP at Lima (1,4MM people) Average household size: 4,6 people Most common jobs * Street vendor * Maid Average monthly household income: S/. 960 $ 343 € 255 Aprox: € 1.85 m/day Most common jobs * Constr worker * Watchman * Janitor * Messenger -----------------------* Electrician * Mechanic * Plumber -----------------------* Taxi / bus driver % of food in monthly expenditure: 67% Average $ contributors: 1,6 members Average years of education: 8,4 (High School)
BOP house Roof material: Calamine – corrugated iron (70%) Wall material: Triplay – wood (48%) Brick and cement (34%) Carton – rush mat (6%) Pavement – side walk NONE (77%) Track NONE (72%) Floor material: SOIL (55%)
BOP at Lima (1,4MM people) LIMA NORTH (23,9%) •Carabayllo •Comas •Independencia •Puente Piedra •San Martín de Porres CALLAO (9,5%) Callao Ventanilla LIMA DOWNTOWN (2,9%) Rímac LIMA EAST (25,9%) •Ate – Vitarte •El Agustino •San Juan de Lurigancho •Santa Anita Lima SOUTH (27,5%) •Pachacamac •San Juan de Miraflores •Santa María del Mar •Villa El Salvador •Villa María del Triunfo
BOP at Lima (1,4MM people) LIMA NORTH (23,9%) •Carabayllo •Comas •Independencia •Puente Piedra •San Martín de Porres Most of them live at the periphery / outskirts; in sand or hill /mountain environments. CALLAO (9,5%) Callao Ventanilla LIMA DOWNTOWN (2,9%) Rímac LIMA EAST (25,9%) •Ate – Vitarte •El Agustino •San Juan de Lurigancho •Santa Anita Lima SOUTH (27,5%) •Pachacamac •San Juan de Miraflores •Santa María del Mar •Villa El Salvador •Villa María del Triunfo
Unmet Need Household Average Monthly Spending in shoes…. Segment Total (a+b+c) Adult Shoes (a) Kids Shoes (b) Repairing (c) BOP € 8,2 € 6,1 € 1,9 € 0,2 No BOP € 10,5 € 8,5 € 1,6 € 0,4 Average Monthly Household income BOP: € 255 NO BOP: € 606 % of shoes in monthly expenditure BOP: 3,23 % !!! (8,2/255) NO BOP: 1,55% (10,5/606)
Unmet Need Household Average Monthly Spending in shoes…. Segment Total (a+b+c) Adult Shoes (a) Kids Shoes (b) Repairing The reason: (c) BOP € 8,24 € 6,11 € 1,86 € 0,27 No BOP € 10,52 Average Monthly Household income BOP: € 255 NO BOP: € 606 € 8,50 Intensive € 1,59 € 0,43 use + % of shoes in Tougher monthly ground expenditure conditions BOP: 3,23 % !!! NO BOP: 1,55%
* Manrique Shoes Group * Milk Glass & Popular Dining Room Associations * Local majors * Product * Sales * Marketing * Shoe design * Sales Force Training * D2D sales * Sales force (B2C) * Storage * Distribution * Administrative Assembled, sole resistant, confortable and affordable shoes adapted to ground characteristics * Though sales force. and promo activities Consumers I. Men - Adult - Kid /School II. Women - Adult - Kid / School * Local Partners -D2D * Deportive centers / Zonal Park * Shoes selling
Product Two Component Assembled Shoes PRODUCT CHARACTERISTICS SOLE + INSOLE * Material: Expanded virgin pvc with nitrile dust + 2mm polyurethane foam * Footprint without cavities * Density: 0,5 – 0,65 gr / cm3 * With eyelets for shoelace attachement • • • • Lightweight Anti fatigue propierties Good cushioning, resistance and grip. Enhanced blood circulation & knee – kidney protection. BENEFITS (FROM BOP PoV) UPPER * Material: Plastified canvas * Assembling shoelaces: # 18 nylon * Different designs & colors for future replacement • More resistance • Impermeability
Product Proxy Reference: Armo Shoes (Chile) “Inclusivo” fair trade project http://ralonso.com/?portfolio=armo
Product Resistant sole + different upper colors / designs Association with key partner “Manrique Group” Specialized in security shoes now looking x diversification opportunities http://www.grupomanrique.com/
Place Local Partners D2D Sales Zonal Parks Sports Camps * Products on consignment + catalog * Only for main campaigns: School - Christmas * Mostly women * Sponsored by majors * High capilarity * BOPs in “buying mood” * Most personal channel. / high level of persuasion. * Opportunity to develop “experience” with BTL activations.
Local Partner Model 1 Our BOP company Training, Promotion incentive Shoes Supply 4. Customer feedback LP 2. Products Shoes Promotion/ Selling CL 3. Purchase CL CL CL Our warehouses 1) Our BOP Company - Trains Local Partners (LP) (mainly unemployed females) 2) Local Partners (LP) - Acquire products from our warehouses - Promote our products to their neighbors - Explain the benefits of the shoes with catalog 3) Clients (CL) - Buy shoes 4) Our BOP Company - Analyze local needs and develop new products by collaborating with LPs (in the future)
Promotion Feeling represented by promotor. One2One promotion Events at Sports Camps / Zonal Parks POP Advertisement Where? BOP highest frequency channel
(**) To make it simple we just use variable costs and not fully allocated ones (+ administrative, marketing, sales training, distribution) Price UPPER SOLE VARIABLE COSTS (x pair of shoes) (**) = + Adult: Kid: € 2.65 € 2.20 COGS x BOP company Adult: Kid: € 2.26 € 1.88 Adult: € 4.91 Kid: € 4.08 Adult: Kid: +14% +14% YTD Benchs Price x BOPs Adult: € 10.58 - € 13.23 Kid: € 7.41 - € 10.05 Adult: € 9.26 Kid: € 7.94 Price x distributor Adult: Kid: +39% +39% Adult: € 5.69 Kid: € 4.76 Margins were set based on learnings pointed in “Mrktg Innovative Devices x BOP” Hystra, March 2013
Marketing & Financials To have green numbers we would need… * Awareness >= 40% of HH. * Break even point: 48,2M pairs * Penetration (Trial) >= 17% of HH. (40,5M kids & 7,8M adults or other combinations) * Market share >= 1,37%. It´s a real Challenge. To get scale we rely on our local partners, and that´s why we need to ensure attractive margins x them.
OUR SOCIAL IMPACT… ASPIRATIONAL FUNCTIONAL EMPLOYMENT (Quality) (Social Integration)
Thanks a lot!!
Back up information
LIMA BOP shoes market size X PERU 291M households € = € 28.7MM € 99 yearly spending in shoes x HH € 122.7MM
YTD Habit: Channels were BOP interact the most 47% 39% 5% 3% 3% 3% YTD Habit: Channels were BOP buy shoes 46% 31%
Distribution model trade - offs PROS * No shoes at YTD * Highest interaction * High bond channel * Opportunity x trade mrktg – POS activation CONS Franchise D2D * Added complexity * Added complexity (28.2M POS / 2.8M x district) (22.8M POS / 2.3M x district) * Not fit with current habit * POS willingness to buy * 2nd channel in current habit. * High interaction * High bond channel * Opportunity x trade mrktg – POS activation * 1st channel in current habit. * Easier to serve POS number (50 x district) * Margin orientation * Conflict vs own retailer brands * Most personal channel. * High level of persuasion. * Added complexity (291M households) * Sales force training and management. * Security / fraud issues
YTD Habit: Means of transportation (most used) 50% 32% Daily time spent at public transportation: > 1,5h 13% YTD Alternative Channels Impact (% bought what they´ve seen at…) 58% 57% 51% 2%
Information Sources i) BOP at Perú * Informe Técnico Pobreza en Perú 2012. INEI * Encuesta Nacional de Hogares 2012 - Modulo Vestido y Calzado. INEI * Niveles Socioeconómicos de la Gran Lima 2012, Ipsos. * Perfiles Zonales de la Gran Lima 2009, Ipsos * Hábitos y Actitudes hacia Canales Alternativos 2012, Ipsos. http://www.youtube.com/watch?v=VjFuiKeoJAI http://www.youtube.com/watch?v=v7mkLORH3RY ii) Propuesta de Marketing * Producto armable Proyecto Inclusivo de Comercio Justo en Chile desarrollado por Rodrigo Alonso. http://ralonso.com/?portfolio=armo * Márgenes para el distribuidor -The base of pyramid distribution challenge. XIFMR Research, 2011. Centre for Development Finance. - Marketing Innovative Devices for the BOP. Hystra, March 2013.
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