ESCUELA SUPERIOR POLITECNICA DEL LITORAL FACULTAD DE ECONOMIA Y NEGOCIOS DON DIEGO’S INTRODUCTION INTO THE CHILDREN’S MARKET (MORTADELLA, HAM AND HOT DOGS) MARKETING RESEARCH PROJECT Antonio Alvarez Mayra Cedeño Daniela Loor Josué Preciado Introduction Don Diego is a company of sausages which since 1982 has worked in Ecuador’s market. It owns a considerable part of the market share, and is known as a company that has always maintained its quality standards so they could assure they have the best products to offer. In order to do that Don Diego has made several agreements and developments to assure the company has the best meat involved in the process. And nowadays Don Diego has grown enough to sell in more than 28 cities over the country, but also to Colombia and maybe soon to Peru. (Don Diego official page). But as a company it hasn’t been introduced in some markets as it should, for example the children’s market. Which not only is big enough to be profitable but it is also a market where not all the competence has gone into. Background Nowadays we can see that some of the biggest consumers of: Mortadella, ham and Hot dogs are children. They eat them since lunch sandwiches to just midafternoon snacks, and even when there have been opinions that say a highly consume of sausages can be harmful for the health (H. Huret - Nutricion y doctissimo.es). Some have also said that a diet including them once or twice a week wouldn’t cause any problem and even could be healthy (Dra. Isabel Zamarrón, del Hospital Ramón y Cajal de Madrid.). As we said before no many competence has gone into the children market. But this rule doesn’t apply for all them. As an example we have Plumrose, which in its publicity, especially on the ham ones, they present a kid eating a sandwich made with Plumrose ham. Here we see that it is selling the customers the idea that a healthy kid eats this ham in their daily lunch. But not only that but also it highlight the benefits that the product has. Hypothesis of the research The hypothesis we are proposing is that Don Diego can successfully enter the children´s sausages market, obtaining a good percentage of the market share in spite of that companies such as Plumrose have got almost all of it. The problem statement The problem we are seeing with Don Diego, is that the company even when it has been in the market since a while, has its own share of the market and produce quality products; hasn´t grown enough in the children’s market. Description of the problem The amount of sells we think it deserves there isn’t what the reality shows. Mostly because customers doesn’t know the company as they should. Or it could be that the parents don´t trust the quality or healthiness of the products. Statement of research objectives Primary objectives o Achieve an increase in the sells by successfully entering the children’s food market Secondary objectives o When the costumers think about Don Diego they come up with their kids lunch options. o Get more participation in schools’ food centers where children buy sandwiches, toasts or hotdogs, which can be made with Don Diego’s products. o Get to know more the public opinion of the people respect Don Diego’s products. o Make the consumer note that the line of sausages for children Don Diego is not only beneficial for their health but also tasty. Description of the company Don Diego Don Diego is a company that since 1982 offers different products in the Ecuadorian market. Don Diego’s products are distinguished for their taste and healthiness, and for their recipes with Spanish origins. Also it is known for maintaining high quality standards, since the beginning it made several agreements with the independent producers to assure that only the best meat is involved in the process. And nowadays it owns its own pig farm in Cotopaxi. Moreover to have even more control of the quality standards: it owns its own factory of pig’s food, imports periodically pigs from other countries, and continuously improves the processing of the meat. The quality of Don Diego’s products is internationally known. Now selling in countries like Colombia where it is present in more than 28 cities. Research methods Type of research we are going to do in our project Primary data What we understand by Primary Data is that: “is data that has been collected from first-hand-experience is known as primary data. Primary data has not been published yet and is more reliable, authentic and objective. Primary data has not been changed or altered by human beings; therefore its validity is greater than secondary data”7 (QuestionsChacha) For the primary data we will need in our research we are planning to do both explorative and descriptive research. Exploratory research We think we need to begin with the explorative research because we don’t know enough about the market to get directly to the descriptive stage, and in order to do it we plan to do these things: - Experience and general opinion surveys: We are going to do a small survey of just one question: “What comes to your mind when you hear Don Diego?” With this information we will know the general opinion people have about the brand. Here we will also try to reach the people who have tasted or bought any Don Diego’s product before in order to know specific opinions about the brand. - Observation: We plan to regard in some supermarkets in the area that the sausages are, to see which brands are bought the most and how often Don Diego’s products are chosen. - Focus group to mothers: In order to get to know better the products we are promoting here, we are going to make a group of mothers to taste them and then write down their personal opinion about it. This will include taste, availability, price and whichever important detail. - A Blind test: To finish this stage of the research we want to do a blind test with children to see if they like Don Diego’s products or not. In this blind test will let the children to taste “without knowing the brand” some of the products and pick which one they like the most. Descriptive research Once we finish the exploratory research we will start doing the descriptive research in which we are going to get more specific information. In this step the surveys will be the most used method of research. And when surveying people we will try to focus to the specific group grown adults, especially those who have children. This is mostly because it is parents who buy kids these kind of products and it is important to know their opinion about them and whether they are willing to buy them or not for their children. The questionnaire will consist in approximately 10 to 15 questions, from which some will be quantitative and some will be qualitative. The forms could be either printed or by internet. The main information will try to collect with them is: - The consumer preferences - How often do children eat sausages - The parents opinion about the product - Various concerns people may have - Which brands have the majority of the market We think this information will give us a strong idea about the current position of Don Diego in the market and how we’ll have to do for introduce our children’s line of products. Secondary data “Secondary Data is Data collected from a source that has already been published in any form is called as secondary data.” In this part of the research the data is easier to gather. But not less important because here we can get big amounts of information already collected by other students, colleges or even also huge organizations which have a lot of more resources and knowledge to do bigger researches and gather tons of useful information for our purpose. The main sources we will focus on are: - Newspapers articles about the sausages market, or anything related - Webpages - Already made researches about the sausage market here in Ecuador. (by other students) - Previous studies about Don Diego products on internet. - Big researches made by organizations such as the INEC, which provide several data freely in their websites. The disadvantages with this data is than some of this data may not be congruent with our research in process or could even be outdated, so we will have to have caution about this To quote some of the already made researches by other colleges’ students we have: - Jamón Americano Don Diego – Pamela Herrera O. – Universidad tecnológica equinoccial http://repositorio.ute.edu.ec/bitstream/123456789/7340/1/33133_1.pdf - Empresa de embutidos Don Diego – Alexis Guayta, Carlos Topa – Universidad técnica de Cotopaxi http://prezi.com/ya7vkwrtadcf/empresas-caracterizadas-por-su-personal/ - Propuesta comunicacional de salchichas de pollo Don Diego – Julio Pazmiño Viniachi http://repositorio.ute.edu.ec/bitstream/123456789/7412/1/33145_1.pdf - Perfil de Mercado embutidos - Ecuador http://www.prochile.cl/documentos/pdf/ecuador_embutidos_2007.pdf Primary Research Development: exploratory research Observation part Observation Report Place: Mi Comisariato – Urdesa Central Day: Thursday, November 22, 2012 Time: 11:00 – 13:30 Researcher: Josué Preciado Experience: During my visit to Mi Comisariato I could notice that not very people buy during the morning, especially on weekdays. People looked busy so they didn’t take time to look at the products, some just picked the first one they saw and others looked for the lowest price and took that product. There was a total of 11 people that bought sausages during my visit, 4 of them took Don Diego and the other 7 took other brands. Figure 1: Logo de Mi Comisariato, Marca registrada Observation Report Place: Supermaxi – Mall Del Sol Day: Friday, November 23, 2012 Time: 19:30 – 20:30 Researcher: Antonio Alvarez Experience: For my observation task I went to Supermaxi, more specifically to the one that is in the Mall del Sol. Here there is a section, separated from the others (sort of an island), especially dedicated to sausages, with hot dogs at one side and ham and mortadella in the other. During the hour i stood there observing, I could notice that most people doesn’t have a preselected product or brand, instead most of them stopped by for some time to think which to buy. From the many people that stopped by, some of them compared prices, other ones started looking at the properties at the back of the products, others took many products but ended returning them to the stands, and others just watched and leaved. The most important thing I noticed was that Don Diego’s products aren’t sold as much as other brands. During the hour I was there from 33 people that bought sausages, 6 bought Don Diego and 27 the other brands. Observation Report Place: Supermaxi – Mall Del Sol Day: Saturday, November 24, 2012 Time: 14:30 – 15:30 Researcher: Antonio Alvarez Experience: In order to get more information I went to the Supermaxi again. This day I got help from girlfriend so we will have more precise information, and because on Friday some of the employees were looking at me for being there alone for so much time. Each one of us stood on one side of the sausages area and counted the amount of people that stopped by and took a sausage. Most of the information about this store was written in the last report. The only thing different is that this day less people picked Don Diego. From 37 persons that bought sausages, 2 bought Don Diego and 35 the other brands. Observation Report Place: Supermaxi – Mall Del Sur Day: Thursday, November 22, 2012 Time: 14:00 – 16:00 Researcher: Antonio Alvarez Experience: This day I went with a friend to the Supermaxi located in Mall del Sur and observed there for about two hours. We didn’t see so many people, because it appears that most people do their shopping on week-ends. The sausages area was a big cooler with all the products separated by type. From 10 persons, 2 picked Don Diego and 8 other brands. Note: This observation was made by my girlfriend and I’m translating what she told me. Observation Report Place: Supermaxi – Mall Del Sur Day: Friday, November 23, 2012 Time: 17:30 – 19:00 Researcher: Mayra Cedeño Experience: When I arrived to Supermaxi I looked for the sausages section, in the back of the local there was a special spot with all the different types located. What I could notice was that the sausages were not separated by brands but by type; for example all of the sausages made of chicken were at the back, all the mortadella packing were at the left side of the stand, next to them were hams, etc. I stood there hanging around by an hour and a half and I watched how people stopped to see the section. Some people seemed like they were looking for a specific product, some people took their time to choose what to buy, others simply took what they got first and finally there were some that just stood to see and compare prices. At the end, from 54 people that bought sausages during the observation, 7 took Don Diego and 41 the other brands. Observation Report Place: Hipper Market – Rio Centro Norte Day: Friday, November 23, 2012 Time: 17:30 -18:30 Researcher: Daniela Loor In my observation it was obvious there was a promotion in order to improve Don Diego’s sells, so that´s why most of people bought it. Apparently the first thing the clients see is the price, and then the quality of the product even when the sausages were separated by types not by brands. I stood there watching the sellers and there were clients who always buy the same, there were others that compare the prices and finally those who tried the samples and changed their mind. Old people rather buy don Diego than the other brands because of flavor and health (I know this because I asked them and also the brand give them confidence) Must of Young parents who tried the free-samples of don Diego changed their choice (53%) As a conclusion from 21 persons that bought sausage during the observation, 13 took Don Diego and 8 the other brands. Conclusions of observation part What we concluded here is that Don Diego products are not as sold as other brands. In most stores these products have good spots designed where customers can easily see them, and in spite of that people still end not choosing them. We did most of the observation at Supermaxi where the percentage of people that buys Don Diego resulted to be very low. But in stores like Hypermarket and Mi Comisariato where by this time there is a promotion of Don Diego’s products, the percentage increases. Tables Table 1 Supermaxi & Megamaxi Place Time (hours) Weight Don Diego Other Total Supermaxi Mall Del Sol 1 18.2% 6 27 33 Supermaxi Mall Del Sol 1 18.2% 2 35 37 Supermaxi Mall Del Sur 1.5 27.3% 7 41 48 Supermaxi Mall Del Sur 2 36.4% 2 8 10 5.5 100% 4.09 25.36 29.45 Total Weighted mean (per observation) Percentage 13.89% 86.11% Table 2 Hipermarket & Mi Comisariato Place Mi Comisariato Urdesa Hipermarket Norte Total Weighted mean (per observation) Percentage Time (hours) Weight Don Diego Other Total 2.5 71.4% 4 3 7 1 28.6% 13 8 21 3.5 100% 6.57 4.43 11.00 59.74% 40.26% Final Table Total (Between all places) Place Time (hours) Weight Don Diego Other Total Supermaxi Mall Del Sol 1 11.1% 6 27 33 Supermaxi Mall Del Sol 1 11.1% 2 35 37 Supermaxi Mall Del Sur 1.5 16.7% 7 41 48 Supermaxi Mall Del Sur 2 22.2% 2 8 10 Mi Comisariato Urdesa 2.5 27.8% 4 3 7 Hypermarket Norte 1 11.1% 13 8 21 Total 9 100% 5.06 17.2 22.28 Weighted mean (per observation) Percentage 22.69% 77.31% Graphs Supermaxi 14% Don Diego Other 86% Hipermarket & Mi Comisariato 40% Don Diego Other 60% Total 23% Don Diego Other 77% Here in the final graph we see an increase in the percentage of people that buy Don Diego; this could be misleading because most this increase is due high percentages of sells in places like the Hipermarket & Mi Comisariato, where there is in these days a promotion for Don Diego’s products. So as general reference we think it would be better to use the Supermaxi percentages we got. Opinion Survey We did a little opinion survey, to get an idea of how common people see Don Diego’s brand. We didn’t ask too many questions, just one: What do you think about the brand of sausages “Don Diego”? We think that with this question we will get a brief introduction about what customers think. We asked the question to 14 persons, here is a summary: Researchers: Daniela Loor, Mayra Cedeño, Antonio Alvarez What do you think about the brand of sausages “Don Diego”? 1. Well, if talking about hams, I think it’s a good brand with a good product ( David Bustillos) 46 years, teacher 2. I haven’t tried them (Paula lecaro, 18 years old student) 3. I have tried once or twice but I usually eat Plumrose (Alejandro Salazar, 29 years old, engineer) 4. It’s very good, I like their sausages. (Lady Velastegui, 20 years old, student of medicine) 5. It is good. (Katty Lascano, 25 years old, teacher) 6. I think it is good, but I prefer Plumrose (Paola Vargas, 20 years old, student) 7. I haven’t heard about it (Paulo Avila, 21 years old, student) 8. I hate it, when I eat it I get sick (Camilo Gavilanes, 19 years old, student) 9. I think it’s an excellent brand; it has a lot of good quality products, but it is a little expensive. (Maria Elena Sanchez, 43 years old, pastry) 10. I like it, but I prefer Plumrose (Gaby Sarmiento Ordoñez, 21 years old, student) 11. If you say Don Diego I think it is a sausages brand, but I actually relate sausages with Plumrose (Maria Fernanda Paredes, 21 years old, student) 12. It is a sausage brand right? I’ve never tasted it but I buy Plumrose 13. What is Don Diego, never tasted it (Ximena Isabel Mendez, 19 years old, student) 14. I´ve only tasted it a couple of times, I think is good but I prefer to buy Plumrose because it’s a little bit cheaper. (Sugey Andulo Cacao, 25 years old, housekeeper) Conclusions What we concluded from this brief opinion interviews is that most of the people know and like the Brand, but they recognize that they prefer Plumrose most the time. Also we saw that there is still a little part of the population that it’s unaware of the brand. Graphs From the total of persons this is the percentage that knew about the brand People that know the brand 29% Yes No 71% And these are the percentages of people that knowing the brand, said that they like it or dislike it. People that like it 20% Yes 10% No 70% Didn’t say Focus Group Researcher: Mayra Cedeño Number of testers: 3 Group: Mothers and grandmothers Product tasted: Don Diego’s Ham: Jamón sanduchero Results After tasting and handling the product these is what they say: About the flavor: They all said that they liked it, but also they said that probably there’re no big differences between it with the other brands ones Packaging: 2 of them liked it because they said that it is attractive and stylized. The other one said that she would prefer a more transparent package for being able to see the product from both sides. Also they all said that it will be good that the package would be reclosable. About the managing and size: All of them said that it is easy to handle, because as they said, there are some brands that are difficult to take out of the package without damaging the product. Finally they said that they size is perfect for making sandwiches for their children. Blind Test Part Our blind tests are focused in children; they are our main target, because despite that parents are the ones that buy the food for their children, more than often they have an important influence in this. So if they don’t like a product, they would convince their parents to not buy it, and if they do like it they would do the opposite. We did our blind tests separately with the children that each could get. From our three main products, in some of the tests we used them all, but in others just two The procedure we followed is this: We made mini sandwiches with the products (mini hot dogs, in the case of hot dog) and let them to taste (without knowing the brand, and that it was different from the one they usually eat), and then we asked a couple of questions. The questions were: 1. Do you like it? 2. Would you like to get this for lunch? Figure 2: Logo Don Diego, marca registrada Blind Test Date: Saturday, November 24, 2012 Time: 10:00 Researcher: Antonio Alvarez Number of testers: 2 Products tasted: Don Diego’s Mortadella: Mortadela especial Don Diego’s Ham: Jamón sanduchero Profile of the testers: girls between 9 to 11 years attending to school. Girl 1. Amelia Gomez Girl 2. Maria Emilia Alvarez Results 1. Do you like it? Girl one liked both products, which she ate in little sandwiches. Although in the mortadella sandwich, she took the mortadella out of it, ate it, and leaved the bread. Girl two liked the ham, but said that the mortadella wasn’t like the one she usually eats (Plumrose) and didn’t like it. 2. Would you like to get this for lunch? Both of them said that they will like to have some sandwiches with Don Diego’s products for lunch, even though Girl 2 didn’t like the mortadella, and that they also say that sometimes they would prefer to eat snacks. Blind test Date: Friday, November 23, 2012 Time: 19:45 Researcher: Mayra Cedeño Number of testers: 4 Products tasted: Don Diego’s Mortadella: Mortadela de pollo Don Diego’s Ham: Jamón sanduche Don Diego’s Sausage: Salchicha Vianesa Profile of the testers: girls between 9 to 11 years attending to school. Girl 1. Angeles Díaz Girl 2. Lissette Velez Girl 3. Gabriela Morán Girl 4. Shirley Guzmán Results 1. Do you like it? They tasted the products one by one, and then they all agreed that they were good and tasty, though only the girl # 2 distinguished the ham from the one she usually eats. Also girl 1 and 3 preferred the ham over the mortadella and the hot dog, while girl 2 preferred the hot dog and girl 4 preferred ham. 2. Would you like to get this for lunch? They all answer affirmatively; even though girl 4 said that her mother didn’t allow her to buy hotdogs. Bind Test Date: Saturday, November 24, 2012 Time: 10:30 Researcher: Josué Preciado Number of testers: 2 Products tasted: Don Diego’s Mortadella: Mortadela especial Don Diego’s Ham: Jamón sanduche Don Diego’s Sausage: Salchicha Super Hotdog Profile of the testers: Kid #1. - Boy: José Saltos, 11 years old. Attends to 5th grade Kid #2. - Girl: Camila Malla: 10 years old. Attends to 4th grade Results 1. Do you like it? Both kid 1 and 2 agreed and say that they liked the products; the boy had preference for the mortadella and could recognize that he tasted a different brand from the one her mom usually buys, while the girl preferred the ham. 2. Would you like to get this for lunch? The boy said that he would like to get this for lunch but that her mom usually buys another brand for mortadella, also he said that he would like to buy hotdogs for lunch. The girl said she liked the products and that she could recognize the ham because her mom buys that brand. Blind test Date: Saturday, November 24, 2012 Time: 20:15 Researcher: Daniela Loor Number of testers: 2 Products tasted: Don Diego’s Mortadella: Mortadela sin grasa Don Diego’s Ham: Jamón de espalda Profile of the testers: Two girls between 9 and 10 years old attending to school Girl 1. Valentina Rivas Girl 2. Maria del Carmen Quiroga Results 1. Do you like it? Both of them agree with the flavor, they do like the ham and the mortadella, maybe because they usually eat Don Diego´s mortadella 2. Would you like to get this for lunch? They would love taking ham sandwiches for their lunch, but their mothers thought that they can eat them, but not every day! because they’re not so healthful. General Conclusions for Blind Tests After doing our blind tests we realized that most of the children like Don Diego products, and would like to have them for lunch, but still now there is the presence of our bigger competitor “Plumrose” which is even positioned in the children’s minds. To finish we will emphasize that even though children like the products, parents are the ones that buy it. So the conclusions in this part are important but do not give complete information Secondary Data Development Focus Groups First Group: House keepers Location: Eloy Alfaro y el Inca The house keepers said that they do eat sausages, approximately 3 or 4 times a week especially ham and mortadella. The brands they consume the most are Juris, Plumrose, Supermaxi, Santa Maria, because of the price. They think that “Don Diego’s” Sausages are tasty, well sized (especially for sandwiches), Some of them didn’t like the products presentation, they say that it is too Spanish. But also some of them did like it because they said that with just one color, as they have now, it would be easier to see the product itself. They said that they would buy the product if it has a good quality and the price is in their possibilities. (PAMELA HERRERA, 2007) Second Group: Men (18-50 años) Location: The Airport Some of them consume sausages periodically, other said that they consume it rarely. The consume frequency varies from every day to once a week. The products they like the most are sausages and ham, and for the brand they prefer Supermaxi and Juris because of the quality and price. They have a good opinion about Don Diego, mostly because they say that it is the only company that exports its products. Also some of them said that they would like another package design. Finally they said that the price influences in the purchasing, they prefer to buy by weight. Others said that what matters is quality no price. (PAMELA HERRERA, 2007) Third Group: Students Location: Universidad Catolica, Politecnica Nacional Both groups responded that they consume sausages approximately 2 times a week, although some of them could rise up to 4. They all have heard about Don Diego, and have a good impression about the brand. Concerning about the packages some of them would prefer it to be resealable, or to have colors like red, blue, yellow, black. Some of the interviewed said that it would be good to mention that the products are made in Ecuador. They eat them mostly with fries, popcorn, eggs, barbecues, etc (PAMELA HERRERA, 2007) Conclusions In these focus groups done by Pamela Herrera, we found some valuable information, even though the targets are not the same as ours, with this data we would conclude two things, the first is that people regularly consume sausages, and the second is that most of the people have a good impression about Don Diego’s products, but when buying they have to balance quality against price. And although Don Diego isn’t that expensive, there are several cheaper brands in the market that influence customers. Surveys What types of sausages do you prefer to buy? Here we see that preferences of men and women are similar. (JULIO ANDRÉS PAZMIÑO VINIACHI, 2007) Which type of sausages do you consume? Most of the people said that they eat more chicken sausages than normal ones, even though this conclusion appears to be rare. Women seem to be the ones that consume more chicken products. Also we see that people relate chicken with health. (JULIO ANDRÉS PAZMIÑO VINIACHI, 2007) What influences you when deciding what to buy? In this graphic we see that the taste is the most important determinant of the decision having more than one third of the total percentage, also the price and packages are very relevant because it is what the customers firstly see when buying. They get attracted by the packaging and compare prices, continuing the exhibition has an important role to because if the customer can’t see the product won’t buy it. Finally the promotion has a very low percentage, even though most people would think that it’s one of the most relevant. (JULIO ANDRÉS PAZMIÑO VINIACHI, 2007) Works Cited Don Diego official page. (s.f.). Don Diego historia. Obtenido de http://www.dondiego.com.ec/web_2/historia.html Dra. Isabel Zamarrón, del Hospital Ramón y Cajal de Madrid. (s.f.). Cuánto embutido se puede comer. Obtenido de http://www.serpadres.es/alimentacion/info-alimentos/cuantoembutido-se-puede-comer.html H. Huret - Nutricion y doctissimo.es. (s.f.). Nutricion y doctissimo. Obtenido de http://nutricion.doctissimo.es/comida-sana/errores-alimentacion/la-verdad-sobre-losembutidos.html JULIO ANDRÉS PAZMIÑO VINIACHI. (2007). PROPUESTA COMUNICACIONAL DEL PRODUCTO:. Recuperado el 5 de 11 de 2012, de Repositorio UTE: http://repositorio.ute.edu.ec/bitstream/123456789/7412/1/33145_1.pdf PAMELA HERRERA. (2007). JAMÓN AMERICANO “DON DIEGO”. Recuperado el 05 de 11 de 2012, de Repositorio UTE: http://repositorio.ute.edu.ec/bitstream/123456789/7340/1/33133_1.pdf Primary and Secondary Data. (s.f.). Obtenido de http://gulnazahmad.hubpages.com/hub/Primary-and-Secondary-Data QuestionsChacha. (s.f.). Primary data is always appropriate and more useful than secondary data true or false. Obtenido de http://www.chacha.com/question/primary-data-isalways-appropriate-and-more-useful-than-secondary-data-true-or-false