Country Market
Analysis
MEXICO
Lipton Iced Tea
LIPTON ICED TEA IN U.S.
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Positioning:
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Target Market:
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Healthy alternative
On-the-go refreshment
Variety of flavors
 sweet, un-sweet, lemon, raspberry, peach, green tea
Adults who seek a healthy lifestyle
Distribution:
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Pepsi-Lipton tea partnership is the leading ready-to-drink
tea producer in U.S. & Canada
TRANSITIONING INTO MEXICO
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Issues to Consider:
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How much will consumers be willing to pay in Mexico?
Will the current product line in the U.S work in Mexico?
Where do consumers in Mexico purchase iced tea, and
how do we make it available to them?
Is the consumer base large enough for Lipton Iced Tea to
enter the Mexican market?
How will the population become aware of our product?
AGENDA
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Price:
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Product:
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Cultural differences and how competition influences
product decisions
Place:
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Factors that affect price
Distribution options and advantages
Promotion:
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Ways to reach consumers
PRICE
Considerations for a pricing strategy:
 Disposable Income:
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Mexico is a relatively poor country
Per capita: $9,000*
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*This is about ¼ of the U.S. average
40% live below poverty line
Competitive Pricing:
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McKormick, Nestea, and domestic brands
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Consumers in Mexico are willing to pay a lower price for
domestic brands
PRICE
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Distribution Costs’ Effects on Pricing:
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Partnership with Pepsi – reduces distribution and
production costs
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Economies of scale
Advertising Effects on Pricing:
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TV and radio are the most effective forms of media,
but are most expensive
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Increased advertising may fluctuate prices
PRODUCT
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Languages and Dialects:
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95% of people speak Spanish
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Different interpretation for marketing strategies with the
different dialects in the Mexican culture
According to Mexican laws, you must translate your
marketing literature, product manuals, labels, and
warranties into Spanish
High literacy rate of 92%
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Consumers will be better educated about product
Less likely to misinterpret labeling or packaging
PRODUCT
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Religion:
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Catholicism plays a major role in society and
Government
Mexicans value the meanings of symbols in a
religious sense
 Research logos to be used by Lipton for product
PRODUCT
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Mexico’s unsafe drinking water
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Water source? Purified?
Competition – other successful iced tea brands
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Closely observe their strengths and weaknesses
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Flavors
Colors
Ingredients
Obtain consumer feedback on already established
brands of iced tea
PLACE
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Free market economy, very
similar to U.S.
Retail outlets in Mexico for new
age beverages:
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Standard Grocers - 51.6% (of the
market’s value)
Traditional grocers - 32.2%
Convenience stores - 5.2%
Kiosks - 3.7%
Discount grocers - 3.4%
Petrol Station stores - .5%
Vending - .2%
PLACE
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Additional Availability:
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Movie Theaters
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Cinemex - Mexico’s largest cinema chain
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Pepsi is the supplier of cinemex’s drinks
Street Vending
Distribution Options:
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Unilever Plant
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Local Mexican Distributor
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Currently present in Mexico
Needs to be adapted to produce tea
Finding well respected Mexican distributors is difficult
50-50 joint-venture with Pepsico
PLACE
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Existing Presence in Mexico:
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Unilever
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Several successful brands and production plants within
Mexico
Pepsi
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The Pepsi Bottling Group Mexico reaches 65% of the Mexican
market place
A well established, strong brand in the Mexican market
Existing business relationships
Strong brand loyalty
PLACE
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Pepsi-Lipton International:
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A 50-50 joint venture between Pepsi and Unilever
Uses Pepsico’s extensive bottling and distribution
network
Pepsi-Lipton International joint venture has proven to
be extremely successful among other international
markets
PLACE
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Pepsi Bottling Group Mexico
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5 different territories
22 production facilities with water
purification
180 distribution centers
5,200 trucks on the road making
deliveries each day
26,000 employees
4 other Pepsi franchise bottlers
serve the remaining regions
PLACE
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Surface Transportation
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Railways: 12,120 miles
Highways: Total: 204,800 miles
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137,600 miles unpaved
Problems:
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Getting product to retail outlets
Consumers getting to retail outlets and getting product home
PROMOTION
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Population - 104,959,594
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Segmented market due to social classes
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Growing 3 times as fast as U.S.
Ever-expanding group of potential customers
Mexicans are very status conscious
To be considered when positioning product
Television
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Reaches 19,284,881 of 22,268,916 households in Mexico,
or 84% of households have television
PROMOTION
Commercial Television
Channel
Technical
Penetration (%)
Cost of 30 Second
Spot on Network
(in U.S. Dollars)
2
99%
$22,314
4
33%
$2,168
5
90%
$11,232
7
94%
$8,272
9
73%
$2,886
13
97%
$10,013
Basic
channels reach large number of people
Strong
opportunity to market to the masses
Peak times are between 7pm-midnight
PROMOTION
TV
Advertiser
TV
Expenditure
(in U.S. Dollar)
Televisa
$781,000
TV Azteca
$285,400
Procter & Gamble
$109,012
Bimbo
$105,529
Coca~Cola
$103,178
Colgate
$67,044
Pepsi Cola
$56,508
Unilever
$54,680
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Unilever – 8th highest
spending on Mexican TV
advertising
Established presence and
relationships with
advertisers and TV
companies
Know how to reach
customers
Sensitive and aware of
Mexican customs
 Business and personal
PROMOTION
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Other Media Outlets:
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Radio
Newspapers
Magazines
Cinema
Internet
Radio is 2nd strongest,
while internet is only
able to reach a small
fraction of consumers
PROMOTION
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Competition
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“New Age Beverages”
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iced teas, sports drinks and bottled waters
Iced Tea Products
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Particularly are popular in Northern Mexico
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Consumers are more influenced by consumption trends of the
United States
McKormick – leading brand of iced tea
Coca-Cola – Nestea brand of iced tea
PROMOTION
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Iced Tea Targets:
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Towards 25-40 year old age group
Those concerned with living a healthy lifestyle
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Nestea’s motto: “Cuando te sientes bien, se nota” (one can tell
when you’re feeling good)
Other Competition:
 Gatorade
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Powdered drinks
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Low price creates high demand
Liquid concentrates
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Dominant force in sports drinks market.
Ease of handling and generally lower prices.
Carbonated beverages
PROMOTION
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Lipton must decide how to position itself in the
existing market
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Similarities with competition
Differences between competition
Coupons, Sales Promotions, Sampling
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Standard groceries enable us to consider these types
of promotion as an option
KEY CONSIDERATIONS
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Pepsi-Lipton Joint Venture
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Production
Distribution
Unilever’s Existing Presence in Mexico
Mexico = Free Market Economy
High Television Penetration
Existing Iced Tea Brands
40% of People Live Below Poverty Line
GRACIAS!
ANY QUESTIONS?