Chile
PUR Water Filter Products
Chris Russo, Kristen Lagasse, Shawn Bolder, and Corey Reeves
Population
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Total Population is: 16,888,760
Growth Rate is 0.836%
Birth Rate is 14.33 births/1,000
population
Infant Mortality Rate is 7.34 deaths
per 1,000
Death rate is 5.97 births/1,000
population
Distribution of Population
0-14: 22.3% (M-1.92 mil/ F-1.84
mil)
15-64: 68.1% (M-5.751 mil/ F-1.84
mil)
Average Age:
Males: 31.1 years old
Females: 33.1 years old
• 89% of the Total Population Lives in Urban
Areas
• This rate is increasing by 1.1% annually
• The Migration rate is near nothing
•There are 3 Main Ethnic Groups
•White & American Indian makes up
95.4% of the population
• Mapuche 4 % of the population
• Other Indigenous .6% of the
population
Chile’s Economic Information
• GDP
• $260 Billion
• Real growth rate: 5.3%
• Average Salary: $15,500
• out of 7.58 million person work
force
• 11.5% of population is below the
poverty line
• Unemployment rate is at 8.5%
• was 9.6% in 2009 and currently
ranks 100th in the world
• Sectors:
• Agriculture: 13.2%
• Industry: 23%
• Services: 63.8%
• Distribution of Wealth
• 40% of Wealth is controlled by 10% of
the population
• According to the UNDP Chile ranked
14 out of 15 worst wealth distributions
• 47% of Chile’s Stock Exchange
Controlled by 4 families
•(in 08’ 12.49% GDP)
Minerals and Resources
• Minerals:
• Copper (1/3 Government
revenue)
• Molybdenum (used in steel
alloys)
• Gold
• Iron Ore
• Lithium
• Nitrates
• Resources:
• Wood
• Fish, Beef, Chicken
• Agriculture
• Grapes, Apples, Pears, Onions,
Wheat, Corn, Oats, Peaches,
Garlic, Asparagus, Beans, wool,
etc.
Transportation & Communication
• Roads: primary means to get around Chile are by
Bus, Car, or taxi
• Within cities people walk or use the subway
• Railways
▫ 5,483 km; 3,406 miles
• Mobile Phones are the primary means
▫ approx. 16.45 million cell phones
• TV/ Land Line Phone/ Internet
• The majority of people in Chile have a means of
communication
Working Conditions
• “Pesticide poisoning, lack of employment contracts, child labor and denigrating treatment
are the daily reality of hundreds of thousands of agricultural workers in Chile, according to a
local and international campaign for health and labor rights.”
• Mine Collapse in San Jose has shown the world the poor working conditions of mining
• Laws are rarely enforced by the government. No child under the age of 15 is supposed to
work, but poverty makes families rely on child labor
• Global awareness has forced the government to take action.
• Monthly- Minimum Wage = 165,000 CLP ($349)
Average= 332,600 CLP ($702)
• Approximately 12% - 15% of workers are Unionized with benefits. Some private workers also
receive benefits
Family Culture
• Family culture is extremely important when targeting
certain markets in Chile
• Families tend to be very close knit
• It is not uncommon to see extended families living in
the same apartment, house, building, or even
neighborhoods
• Because of this structure “word of mouth” among
these groups can be vital for a product’s success
• Brand use and purchasing patterns are influenced by
prior generations use of products
R&D
• Developments In Science and Technology
• Chile has the most advanced telecommunications infrastructure in
Latin America
• Boasts the highest personal computer and Internet usage rates in the
region
• Technological skills of the labor force
• Chile’s strategy of attracting skilled immigrants makes a lot of sense
when you consider that it costs practically nothing compared
with the billions that regions invest in creating industry clusters
• Chile enjoys unequalled economic and political stability
• Consumer buying habits
• Towns grew offering entertainment to the hard working man and
home appliances for the domesticated woman. Banks offering loans
to small businesses encouraged a new era of retail and wholesale
expansion.
Percentage of GNP in R&D
• “doubling Chile’s production of technology until it reaches a percentage of the
GDP equivalent to that of wine and salmon”, 2 of Chile’s greatest exports
Water Contaminants in Chile
• Total Trihalomethanes(TTHM)
• Total Trihalomethanes are chlorination by-products that can
emerge in chlorinated water. This type of water contaminant can
cause anemia in infants, young children and fetuses, nervous
system effects and even cancer
• Mercury
• Exposure to excessive amounts of mercury maypotentially cause
kidney damage when exposed to levels above the EPA maximum
contaminant for level for extended periods of time
• Taste and Odor of Chlorine in Tap Water
• If excess amounts are used, or if high concentrations of chlorine
are in your pipes and plumbing, it can cause bad taste and odor
in your drinking water.
Water Contaminants Cont.
• Industrial Pollution
• Depending on the exact pollutant, health concerns include
intestinal polyps, increase risk of cancer, liver problems,
kidney problems, damage to the central nervous system,
and many other issues with body functions
• Nitrates
• Fecal Pollutants
• Though the water is regulated by the Superintendencia
de Servicios Sanitarios (SISS), since each region’s water is
overseen by different agencies the water doesn’t always
meet the standards set for tap water
PUR Filter Technology
Mineralclear Filter
Stage 1
Added layer to trap sediment
Stage 2
Activated carbon microfilter for
contaminant reduction, also removes
99.9% of the microbial cysts,
Cryptosporidium and Giardia
Stage 3
Filtered over natural minerals for a crisp,
refreshing taste
PUR Products
• PUR Mineralclear Horizontal Faucet Water Filter
(9803 CLP/ $21)
• PUR 7 Cup Water Pitcher (7002 CLP/ $15)
• PUR Purification Packets (500 CLP/ $1.07)
• PUR Filter Replacements (4668 CLP/ $10)
Adaptations
• Faucet attachments must be adjusted to fit the
differences in Chile
• Smaller Pur water pitchers in order to fit the smaller
refrigerators
• Sales of water packets for rural, poverty stricken
towns
• Language on packaging and instructions needs to be
changed
Competitors
• Philips and Vigaflow
• Phillips
• European based company
• Focuses on healthcare, lifestyle, and lighting
• Has strong brand awareness in Chile
• Vigaflow
• Local Chilean Company
• Perception of product is perceived as cheap
• Competitor product & support techniques
• In-store returns
• Help call centers
• Needed little adaptation
• Packaging remained the same except
language modification
Competitor’s Pricing
•Vigaflow:
• 9,900 – 12,600 CLP ($21-$27)
• Sold in Vigaflow stores, appliance shops, local home
improvement shops (mainly plumbing stores)
• Ex: Orbe, Aguamarket y CIA LTDA, Prochem LTDA.
•Philips:
• 11,000 - 20,798.15 CLP ($23 - $45)
• Sold in upscale department stores
• Falabella, Ripley’s, Paris
• No Store sites have the filters on their web pages
Competitor Product &
Packaging
SWOT Analysis
Strengths
Weaknesses
• Still an emerging market
• Not a pioneer in region
• Chilean belief's that their water is
clean enough to drink
Opportunities
Threats
• No real dominant product in
the market yet
• Lack of knowledge and poor
distribution of wealth
Advertising
• Commercial advertisements 2 weeks prior to
entering the market, then continuing after
• Online advertisement on Ripley’s and Falabella’s
websites
• Online advertisement on the PUR website with
locations where the products can be purchased
• Demonstrations on how to use PUR products in
stores they can be purchased at
Commercial Advertisements
• YouTube - PUR Water Filter Commercial
• This type of commercial can demonstrate how much frequently
water is used and how the PUR technology can filter your water
better
• YouTube - SUMMIT ON THE SUMMIT / PUR Water TV ad
:60
• Translate into Spanish- Decentering
• Since we are introducing these products for sale for the first
time, we would like to make sure there are no errors
• Believe this will spark interest in the product due to PUR’s
involvement after the Chilean earthquake in 2010
Sales Promotions
• Free trials with PUR Packets during the first week of
introduction
• Buy 5 PUR packets and get a gallon container for free for
first time users
• First 50 in the store get a free PUR pitcher on opening
day as a gift in selected stores
• Since coupon use is rare, put PUR products on sale for
20% off when introduced
• With the benefits of in home trial use and discounts, mixed
with Chilean family culture, we believe the benefits will
outweigh the costs of sales promotions in the country
Distribution
• Types of distribution:
– Railroads
• Almost impossible to reach
from Maine to Chile
– Air Carriers
• Second best alternative
• Santiago is the main airport
– Motor Carriers
• Very difficult, gas prices,
too many terrain issues
– Ocean Carriers
• Best option
• Chile has many
harbors/ports located
throughout the country
• Proctor and Gamble (P&G) has
many manufacturing plants
across the world that
manufacture PUR
• Main manufacturing sites: Maine,
Singapore, the UK, and Pakistan
• Origin shipping port: Portland,
Maine
• Chilean shipping ports: Coronel,
Huasco, Lirquen, Puerto
Ventanas, San Antonio, San
Vicente, Valparaiso
Distribution cont.
• P&G ACE provides a high quality service
tailored to meet unique international
logistics and shipping needs
• P&G ACE air and ocean service
capabilities ensure that the cargo reaches
its destination on time and intact
• Their attention to detail and innovative
approach has earned a reputation of
being one of the most dependable and
customer-focused forwarder
• U.S.-Chile Free Trade Agreement
• Under the FTA it requires equivalence
of technical regulations and standards,
alignment with international
standards, reliance on a supplier’s
declaration of conformity, and use of
accreditation to qualify conformity
assessment bodies, as well as
cooperation through mutual
recognition
• Some of the benefits of using them are:
• Full Container Loads (FCL)
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Containerization: Exterior Dimension: 20' x
8' x 8'6"
• Customs Clearance
• Import/Export Quarantine Service
• Express inspection and clearance, Express
release
• Restrictive goods clearance (Food, Wine,
Tobacco, Biological Products, etc.)
• Customs Consulting (Tariff classification,
Valuation, Customs Duties Solution, etc.)
• Cargo Insurance
• P&G ACE also makes sure transportation
and shipping needs are met and
surpassed once arrived in the harbors
Distribution cont.
• Warehousing:
• P & G ACE also takes care of
warehousing
• Bonded & General Warehousing
• Long & Short Term Storage
• Distribution and Inventory
Management
• P & G already has a warehouse in
Santiago, Chile
• Address:
Proctor and Gamble Chile Limitada
Presidente Riesco 5335
Piso 17, Las Condes
Santiago, Chile
Phone: (562) 816-5000
• Terms of Sale:
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CIF (cost, insurance, freight)
CFR (cost and freight)
EXW (ex works)
FAS (free alongside ship)
FOB (free on board)
Channels of Distribution
• Potential Retailer Locations:
• Lower end: Local Stores, Supermarkets, home improvement shops, online
• High end: Upscale Department Stores, Home Improvement Stores, Online
•Ripleys:
• Founded in 1956 as the famous 'Royal' store, it changed its name to Ripley in
1964
• They are large department stores that have accommodated shoppers young
and old
• Each store contains four separate floors of children’s wear, women’s wear, men’s
wear and home furnishings
• They have 35 stores in Chile that take cash and credit
•Ten locations can be found in Santiago
• As they say, “It's one-stop-shopping for the whole family”
•In short, Ripley offers its clientele quality merchandise of every conceivable
style, size and price range
Channels of Distribution cont.
• Falabella:
• Has 36 stores located throughout Chile that take cash and credit
• Layout is almost identical to Ripleys
• The two are major competitors in Chile
• Falabella's core business is the retail of apparel, accessories and home
products
• Through department stores, malls and specialty shops
• Retailers: Ripleys and Falabella
• P & G already has products distributed and sold in Ripleys and
Falabella
• We will not be using wholesale middlemen
• Since Ripleys and Falabella are already established P & G retailers
they will pay for PUR products based on letters of credit
• Our price sold to these retailers will include: tariffs, customs fees,
currency fluctuation, transaction costs, and value-added taxes (VATs)
• This
is an example of
our contract that we
will have with our
retailers
•Our hope is that with
the success of our
product we will be able
to do business with
more retailers in similar
areas
www.amchamchile.cl/UserFiles/File/Mining%20Industry.pdf
www.britannica.com/EBchecked/topic/111326/Chile/24687/Mineral-resources-noncarboniferous
news.bbc.co.uk/2/hi/americas/country_profiles/1222764.stm
www.ehow.com/about_5243686_labor-employment-laws-chile.html
www.emporikitrade.com/uk/countries-trading-profiles/chile/labour-market
www.mapsofworld.com/south-america/economy/chile.html
en.mercopress.com/2004/09/30/chile-s-wealth-distribution-among-the-world-s-worst
www.nationsencyclopedia.com/economies/Americas/Chile-WORKING-CONDITIONS.html
www.philips.cl/c/purificador-de-agua/16389/cat/
www.studentsoftheworld.info/infopays/rank/PNBH2.html
www.vigaflow.com/residencial/fichas/Manual%20Jarra%20Digital.pdf
www.tierramerica.net/2005/0212/iacentos2.shtml
www.wsws.org/articles/2010/oct2010/chil-o18.shtml