Through an International Marketing course, I worked with a team to discover the best plan on how to introduce an American product, SPAM, to Peru.

1. PERU
MARKETING
PLAN
Alex Blom
Marina Guimaraes
Jacob Hehn
Summer Levinson
September 26, 2019
Jasin Nordheim
Dalian Petrov
Sander Sondral
Maren Steinmo

2. What is SPAM?
6 Simple Ingredients:
● Pork with Ham
● Salt
● Water
● Potato Starch
● Sugar
● Sodium Nitrate
Reasons to Buy:
● Source of protein
● Long shelf life
● Refrigeration not required
● Inexpensive
● Can be used in a variety of
ways to make different
meals
(Hormel, 2019)

4. Why SPAM?
★ Southeast Asia: SPAM is a luxury product
good enough to be wedding gifts
★ Philippines: Brand is popular enough to
inspire a whole restaurant being built around
the theme
★ Hawaii: Sold both in delis and fancy
restaurants
(Hormel, 2019)

5. Bringing SPAM to Peru
Government Challenges:
● Inefficient process with government not wanting to
make final decisions on allowing imports
● Enforcement of intellectual property is weak
Positives:
● Peru is ranked 58 out of 190 by World Bank in ease of
doing business
● Peruvians are becoming more open to imported
goods and price is what is most important -
promotions and discounts matter
(Export.gov, 2018)

6. S
W
O
T
TRENGTH = Hormel’s multinational establishment
EAKNESS = Foreign-based commodity
PPORTUNITY = Cross-cultural Compatibility
HREAT = Developing Infrastructure

7. Strategy and
Alternatives
Begin in Lima because it has the largest percentage
of Peru’s population
LOCATION
Start by selling original SPAM; once we gain a
foothold in market we expand by selling Jalapeno and
Teriyaki to fit Peru’s culture
DIVERSIFYING
Once SPAM is successful in Lima, we can expand to
other cities
LONG TERM

8. Sales
Expectations More than 122 million cans are sold each year
Sold in 44 countries
WORLDWIDE
In our first year: We expect to sell about 9.7 million
cans
OUR EXPECTATIONS
Hawaii sells ~4.9 cans per person each year, we
expect to sell ~1 can per person and population in
Lima is ~9.7 million
REASONING
(Hormel, 2019)
(Bloomberg, 2011)

9. Distribution
Channels
DISTRIBUTOR
● Existing relationships with every
supermarket chain
● Can penetrate additional
channels
RETAILER
● Supermarkets buy directly from
manufacturers to increase
margins
● Usually request exclusivity
Source: USDA Foreign
Agricultural Service
RECOMMENDATION:
DISTRIBUTOR

10. Pricing Decisions -
Penetration Pricing
● No market for canned meat in Peru
Capturing market shares quickly
Higher price -> risk of competitor
undercutting our price
● Peru scores high on Uncertainty
avoidance (87)
(Hofstede, 2019)

11. (Numbeo, 2019)
Costs of Living in Lima
● Cost of living index in Lima is 57.08% lower than of New York
● Cost of living rank 231st out of 376 cities in the world
● Calculations of price:
100%-57.08% = 42.92%
A box of SPAM costs $3 in the U.S., so same price in Lima:
3*0.4292 = 1.2876
Retailer usually takes a 25% markup:
1.2876*0.75 = 0.9657
Distributors usually takes a 17% markup:
0.9657*0.83 = 0.8015

12. Potential Competitors
No local competitors
• No local competitors: no direct
competition
• There are global competitors:
possible future competition
• “Devil Ham” is a popular brand in
Venezuela: Possible future main
competitor.

13. Target Customer Segments
Age: 18-50
Income level: Medium/High
Characteristics: Home after
working overtime. Looking
for food that is quick and
tasty.
Single Working
Men/Women
Age: 18-25
Income level: Low
Characteristics: Looking
for the perfect meal after
school or a day with
friends that is easy to cook
and cheap.
Young Individuals
/Students
Age: 18-50
Income: Low
Characteristics: Looking for
a cheap meal that is filling.
Low Income
Individuals
Age: 30-50
Income: Medium
Characteristics: Family with
kids. Always in a hurry.
Looking for food that is fast
and nutritious.
Upper to Middle
Class Families
- Convenient
- Nutritious
- Not price
sensitive
- Convenient
- Nutritious
- Price
sensitive
- Price sensitive
- Convenient
- Price sensitive
- Cheap meal
(Oxfam, 2015)

14. Promotion Objectives
● Short term: 1.5 million people to try
SPAM at least once within first year
of selling
○ High hope for repeat purchase
to meet sales expectations
● Long term: Make Spam a comfort
food or staple household item

15. Types of Promotion
● 14.4% of all
advertising
expenditures in
2017
○ $96 million
● Social Media: FB
● Emails
Internet Advertising
● Buy one get one free
promotion at
supermarkets
○ Peru soccer team
wins
● Sponsor a soccer event
or soccer team
Sales Promotion for
Retailers - Soccer
● Largest advertising
expenditure in 2017
○ $320 million
● Product placement on
telenovelas
● Cooking shows
● Celebrity endorsement
Television Advertising
(Export, 2018)

16. ● Sizzle, Pork and Mmm Campaign:
○ Same campaign used globally but change
name
○ Telenovela stars
■ Dramatic
○ Educational
■ Recipe ideas
● Salchipapas
● Arroz Chaufa
● Aspirational
○ Kid goes from eating SPAM in kitchen after
soccer practice to leading team during a
national game
Advertising
Message

17. • Falling unemployment rate (6%)
○ Healthy economy = 4-5%
• GDP around 2.6%
○ Healthy economy = 2-4%
• Hormel has reported highest cash-flows
within the past decade
○ Efficiency
• Revenue Stream:
○ Grocery products = 26.42%
○ International products = 6.54%
• Factors allow Hormel to expand more
• Proposed budget: 20 million Sol
Proposed
Promotion
Expenditures
(Bloomberg, 2019)

18. In Conclusion
● SPAM: global product
○ Versatile, high quality and cheap
● Hormel Foods
○ Mature multinational establishment
● Distribution channel: distributor
● Penetration pricing
● No current competitors
● Target Market
○ Middle/high: SPAM
○ Low: Private label
● Promotion
○ TV, internet, BOGO

19. Thank you! / Gracias!
Any Questions?

20. Appendix
Source: USDA Foreign
Agricultural Service

21. References ● https://peru.oxfam.org/sites/peru.oxfam.org/files/file_
attachments/Inequality%20in%20Peru.%20Reality%20a
nd%20Risks.pdf
● https://www.export.gov/article?id=Peru-Trade-Promotio
n-and-Advertising
● https://www.spam.com/about
● https://www.export.gov/article?id=Peru-Market-Challen
ges
● http://documents.worldbank.org/curated/en/225281510
213114423/pdf/WP-PUBLIC-DB18-PER.pdf
● https://import-export.societegenerale.fr/en/country/peru
/market-consumer
● https://www.americasquarterly.org/content/peruvian-su
ccess-story
● https://www.numbeo.com/cost-of-living/in/Lima?display
Currency=USD
● https://www.cracked.com/blog/8-canned-meats-eaten-r
eviewed-because-god-lie21/
● http://www.perutravelerblog.com/food/5-supermarkets-to-buy-g
roceries-lima-peru/
● https://www.limaeasy.com/shopping-in-lima/supermarkets
● http://www.perutravelerblog.com/food/30-plus-grocery-items-pri
ces-in-lima-peru-january-2010/
● https://www.statista.com/statistics/873206/peru-cities-major-su
permarket-chains-number-of-stores/
● https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Ret
ail%20Foods_Lima_Peru_12-20-2017.pdf.
● https://investor.hormelfoods.com/interactive/newlookandfeel/40
68867/2018_Annual_Report.pdf
● http://www.tom-gray.com/2012/04/26/reasonable-markup-to-dis
tributors
● https://www.hofstede-insights.com/country-comparison/p
eru,the-usa/