MKT430 RapaNui Global Mkt Plan

California Pistachios 1
Marketing Plan for Sapindale Growers
Exporting California Pistachios to Rapa Nui
Kelly Unruh
MKT 430: Introduction to Global Marketing

The Marketing Plan
Sapindale Growers, a Southern California pistachio orchard, is expanding
globally. The first global market to enter will be the tiny island of Rapa Nui, a providence
of Chile, in Polynesia. Introducing the California Pistachio to Rapa Nui will prove to be a
much worthwhile endeavor. The island of Rapa Nui is the most isolate inhabited island in
the world. Being “more than 2,000 miles off the coast of South America,” almost all of
their food and supplies are imported (Trachtman, 2002, par 4). A majority of the food
will come from Chilean farms. Agriculture is one of Chile’s main industries, however
exporting to other Latin American countries makes up 18% of their total share (Brooks,
Cervantes, & Migotto, 2008). This is important to Sapindale Growers in that Chile does
not produce pistachios and it leaves Rapa Nui open to trade with other countries. These
reasons will help build the marketing plan for marketing and exporting California
Pistachios in Rapa Nui.
Marketing Objectives Pistachios are not currently grown in either Rapa Nui or
Chile, making this a new market to learn about and consume a new product. When
introducing pistachios to Rapa Nui, the health benefits should be stressed as well as
addressing the issue of the shells and how to properly dispose of them. The target market
will include local Rapa Nui who are prone to cardio vascular disease and diabetes, two
diseases high among the islanders (“Easter Island (Rapa Nui),” 2007).
Within the first 5 years of marketing pistachios in Rapa Nui, the sales and profit
forecast should see a steady increase year over year. The profit forecast would also need
to take into have a budget that accounts for flexibility in the overhead costs, such as
personnel and transportation costs. Because this is a new market for Sapindale Growers,

seeking out an expert opinion in the importing trade to Rapa Nui as well as that of the
American Pistachio Growers will help to provide historical data to forecast upon. Rapa
Nui has around over 4,000 inhabitants with an annual total of 50,000 tourists, the goal of
the market penetration will be to reach a large majority of the locals and about half of the
visitors (Ross, n.d.). The coverage will be focused on the island’s main village and
outlying areas.
SWOT Analysis The SWOT Analysis sets out to capture all the key elements
needed to achieve the marketing objective. The strengths for marketing pistachios in
Rapa Nui are the health benefits of the product and knowledge of the product by the
incoming tourists. Weakness in marketing pistachios is the by product of the used shells
and how to dispose of them on an island. Another weakness would be the slow rate of
acceptance by the islanders. Areas of opportunity include messaging on additional usages
and benefits of the pistachio, such as using them as an ingredient in cooking and baking.
Lastly, possible threats include spoilage during shipping and unknown allergic reactions
to the pistachio by the islanders.
Product Adaptation or Modification The pistachio itself will not be modified too
much from current domestic varieties. Possible different flavor blends that are
complement local islander tastes, like a sweet and savory version using coconut oil, can
be added to the product portfolio. Current varieties and flavors will also be exported into
Rapa Nui. The packaging of the pistachios will follow the labeling guidelines of Chile.
Knowing that Spanish is the predominate language spoken on Rapa Nui, all packaging
will be bilingual in Spanish and English. The creative elements of the packaging will
follow that of the US versions, with slight variations to reflect the culture of Rapa Nui.

Research of the Chilean trademark and patent laws will be done to be sure that Sapindale
Growers is not infringing on any current marks. The actual packaging will be adapted to
be more eco-friendly by usage of biodegradable materials to minimize on the amount of
waste. Sapindale Growers aims to reduce its carbon footprint wherever it can. Initially,
Sapindale Growers will continue to support the Rapa Nui export of pistachios out of the
Southern California headquarters, with one sales representative located on the island. As
sales increase, there will be a need to expand the local presence.
Promotion Mix The key to the promotion mix is that it “is all about
communication” (Riley, 2012, par 2). Sapindale Growers will need to find the balance of
awareness and persuasiveness within their communication to this new market. Tactics in
each of the core areas of the promotion mix will be utilized and modified as continued
growth in Rapa Nui is seen.
Advertising Sapindale Growers will look to utilize a mixture of in-home,
in-store and out-of-home advertising vehicles. Print ads in the local papers and magazines
will be purchased. Geo targeted digital banners will be also help drive the Rapa Nui back
to the Sapindale Growers website for more information and a local store directory. In-
store, Sapindale Growers will leverage shelf signage and shipper displays, where
applicable. Shipper displays will include tear pads with helpful information and recipes.
Specially designed racks will also be placed at point-of-sale for that last minute impulse
buys. Bus and car wraps will include eye-catching graphics to garner awareness for the
brand. TV will not be considered in the first few years due to cost and effectiveness.
Radio will be explored as Sapindale Growers gains a better understanding of the
everyday life in Rapa Nui. There will be two distinct advertising messages. One message

will focus on the awareness of pistachios and building the Sapindale Growers brand.
These messages will be found in more general areas. The other message will focus more
on the health benefits and will be a little more targeted to specific segments of the
market. Sapindale Growers will work with local media agencies to find the most cost
effective media mix.
Sales promotions In the early stages of promotion of Sapindale Growers
pistachios, sales promotions will be consumer and trade facing. A recent Nielson report
states that only 25 percent of Latin American shoppers will use coupons (“Global
consumers go sale searching and coupon clipping,” 2011, par 6). Understanding this fact
will help determine the types of sales promotions used. Product sampling through store
demos and within the community will contribute to a large part of the sales promotions.
Trade allowances and other one time discounts will be offered to the retailers to bring in
the pistachios and promote and sell them. As an added value to entice the customer to try
and purchase the pistachios, a premium of some sort, like a recipe book, will be offered at
time of purchase.
Other promotional methods Personal and direct selling may also be used.
The local Sapindale Growers sales rep will meet with the retailers to educate them on the
history and benefits of pistachios as well as the comprehensive marketing and advertising
program being offered. Street teams will canvas the island distributing free samples of the
pistachios to the locals and tourists alike. These street teams will be made up of young
Rapa Nui, outfitted in Sapindale Growers apparel and trained in how to market the
message.

Distribution: from origin to destination Rapa Nui is roughly 4,245 miles south of
Southern California. All of this distance is over open ocean (“Distance from Easter Island
to Los Angeles,” 2013). A distribution channel will most likely need to cover air, land
and sea. Rapa Nui is in the Central Time Zone, only two hours head of Sapindale
Growers, making real time conversations fairly manageable.
Port Selection All shipments to Rapa Nui will leave the Port of San Diego
and will arrive in the Hanga Roa port on Easter Island. Hanga Roa is an anchorage port,
meaning that all ships much anchor about a mile and half off the coast and take water
taxis to shore.
Mode selection A combination of air and motor carriers will be the best
modes of distribution for pistachios. There are no railroads in Rapa Nui. Ocean carriers
will take too long and risk possible infestation or spoilage of the pistachios. Air, although
probably most expensive due to the weight of the pistachios, will deliver the product to
Rapa Nui in a timely matter. Once landed, the pistachios will be distributed by local car
to the various retailers. Large 18-wheelers are limited on the island, so a large car or
service truck or van will suffice. A partnership will be created between both the air and
motor carries and Sapindale Growers. Companies like FedEx may prove to be more
expensive than a private airfreight carrier.
Packing Sapindale Growers pistachios will be packaged in both single
serve and multi-serve varieties. The outer case will be constructed so that it meets OSHA
standards in weight and size. Most cases will hold 24-28 containers of pistachios. Outer
cases will be clearly marked with manufacturer information, product and variety,
scannable UPC bar code, expiration date and lot code for tracking purposes. The

expiration date and lot code will match the cartons inside. Because the pistachios will be
air freighted to Rapa Nui, containerization is not needed. Shipping costs will be factored
into the total retail price of the pistachios.
Documentation required Various documents will be used and closely
monitored. All documents will follow both Chilean and the US policies for exporting.
The bill of lading will be generated by Sapindale Growers outlining the contents of the
shipment and serve as the documentation needed by customs. Dock receipts will not be
needed as they are for ocean freight, however an air bill will be needed, especially if
using FedEx. Commercial and pro forma invoices will help move the pistachios through
customs and keep the accounting books tidy. Other forms of declaration and origin will
be used as needed. Insurance claims will be managed closely for pistachios that arrive
damaged, spoiled or not arrive at all. As the quantities increase in the export of the
pistachios, a freight forwarder will be considered to help with the logistics of shipping
and paperwork.
Channels of distribution The distribution of the California pistachios will follow
the standard methods of Chile. Sapindale Growers will initially test the market by going
direct to the retailers and will adjust the plan accordingly.
Retailers Sapindale Growers will sell their pistachios to the two
supermarkets on the island as well as have a booth at the daily public market (“Hanga
Roa – Shore Services,” n.d.). Secondarily, the pistachios will also be sold in the sundry
shops of the local resorts. These retailers will reach out to the locals as well as the
tourists, both markets that Sapindale Growers is looking to reach out to. Sapindale
Growers will recommend that the retailers sell the pistachios based on the manufacturer

suggested retail prices (MSRP) or use their own standard markup, as they feel necessary.
Understanding that credit cards are not widely used on Rapa Nui may pose a problem
with doing business with these retailers, however, through the utilization of online
payment processing and working with the local bank, this should not pose an issue.
Wholesale middlemen In testing the various channels of distribution,
Sapindale Growers will not utilize a wholesale middleman in the beginning. As sales
grow and demand is greater than supply, the distribution plan will be revisited. However,
Chilean export agents may be utilized for their expert opinion on relevant topics of
markup, payment and scale of operation.
Warehousing Sapindale Growers will ship direct to the retailers, thus not
needing an abundance of additional warehousing space. For the product going to the
public market, the pistachios will be shipped directly to the local sales rep, who will also
be managing the presence at the market. As supply and demand increases, Sapindale
Growers will consider looking at warehousing at a port in Chile. Pistachios, however, are
not a commodity that warehouses well and should be delivered in a timely manner to the
end consumer.
Price determination Because pistachios are a commodity, the wholesale market
price will fluctuate with the growing season. The product that Sapindale Growers will be
exporting to Rapa Nui will be in a pre-packaged finished form, which will incur some
additional costs from the purchase of the raw ingredients. Careful consideration will be
made to make sure that the retail price is fair to the consumer yet is able to cover all the
costs to product and ship the product.

Cost of the shipment of goods The logistics carrier of Sapindale Growers
will calculate all the costs associated with the shipping of pistachios to Rapa Nui. The
carrier will create and issue pallet configuration drawings outlining the most optimal way
to pack and ship with minimal damage.
Handling expenses The handling expenses include all the additional costs
to ship the pistachios to Rapa Nui. The additional packaging, transit and labor hours will
be factored into these costs. Because Sapindale Growers will be shipping via FedEx to
Rapa Nui, pier charges and wharfage fees will not apply. These are charges added to
shipments when goods are shipped by boat and the boat comes in to dock. However,
standard loading and unloading charges will apply at the airport in Hanga Roa.
Insurance costs Following good business practices, Sapindale Growers
will carry an insurance policy for shipping. This will help cover the liability for any
unforeseen incidents during the transport and delivery of the pistachios to Rapa Nui.
Crossing such a large body of water at one time could prove to be risky at times,
especially during inclement weather. Insurance can also prove beneficial if the delivery is
blocked from moving the pistachios from the airport to the retailers due to some sort of
political or social unrest.
Customs duties Chile has various added costs, import duties and taxes, on
imported items. The amount paid is “calculated on the complete shipping value, which
includes the cost of the imported goods, the cost of freight and the cost of insurance”
(“Import duty & taxes when importing into Chile,” 2013, par 1). All products are coming
into Chile are subject to these taxes.

Wholesale and retail markups and discounts Sapindale Growers will not
have any wholesale markups or discounts, but will encounter retail markups and
discounts. Typically when working with a wholesaler, Sapindale Growers will sell the
pistachios at a price higher than what it cost to produce the product. The wholesaler will
then add a markup and charge the retailer a slightly higher price. To cover their needs, the
retailer then sets the selling price at a percentage higher than what they paid for. By not
having a wholesaler in this model, the final price to the consumer will be lower.
Company’s gross margins Sapindale Growers’ gross margin is the profits
after all the other costs are accounted for. This is the formula that all sound businesses
plan for – total sales revenue minus cost of goods sold, divided by total sales revenue.
The result is a percentage of the total sales revenue. In other words, the portion of the
dollar that stays with Sapindale Growers.
Retail price Sapindale Growers will offer the retailers of Rapa Nui a
MSRP, having already taken in account of all the costs associated with the pistachios
from growing to shipping, including any marking costs. The retailers can follow the
MSRP or opt to charge their own retail price.
Terms of sale The terms of sale used by Sapindale Growers will be drafted by the
staff legal counsel and will outline the company’s standard delivery and payment terms.
Since this will also be an international partnership, specifics guidelines regarding the
transportation will be included.
EX works, FOB, FAS, C&F, CIF The International Chamber of
Commerce has created a standard set of terms of sale, in which Sapindale Growers will
adhered to the ones most applicable. EXW (ex works) puts the responsibilities of the sale

on the buyer and not on the seller in that the buyer is responsible for the transportation
and associated costs. FOB (free on board) is the designation that the seller ships the
product via the specified carrier as determined by the buyer. FAS (free alongside ship)
deals when shipping by sea and the seller has already cleared the goods. C&F (cost and
freight) is also for sea shipment and is when the seller pays for all costs and freight for
the buyer. CIF (cost, insurance and freight) is the same as C&F with the additional costs
of purchasing insurance by the seller.
Advantages/disadvantages of each The above-mentioned terms of sale all
keep the risk of the sale on the seller and not on the buyer. The buyer is able to define the
sale of goods on their grounds. In relation to the pistachios by Sapindale Growers, since
shipping by sea will not be used, many of these terms of sale will not come into play.
Sapindale Growers was already going to assume the responsible of the shipping costs as
calculated into the product price. If the retailers of Rapa Nui have a logistics partner other
than FedEx that they would prefer to use, then Sapindale Growers would be open to that
option.
Methods of payment As negotiated early on in the partnership, Sapindale
Growers will work with the retailers of Rapa Nui on the best possible payment options
that fit their unique needs. Cash in advance payments will only be used if a trend of late
or missed payments is had by the retailer. COD payments may also be applied in these
situations. Since this is a new business adventure and there is limited cash flow with the
retailers of Rapa Nui, open accounts will not be utilized. This method could be
detrimental to the growth of Sapindale Growers. Selling of pistachios on consignment
may not be a good practice. Buying on consignment puts no risk on the retailer and they

only have to pay for what they sold and return the rest. With a perishable item like
pistachios, it is not in Sapindale Growers’ best interest to sell on consignment. Sight, time
or date drafts are needed for letters of credit. If Sapindale Growers were uneasy about the
retailers not paying, then a sight draft should be used, yet not as enforceable with air
shipments. The time draft may be utilized by Sapindale Growers if they find that a
retailer needs a bit more time to pay. The date draft simply outlines when payment is due.
Letters of credit can prove to be beneficial for the Rapa Nui retailers in which their credit
risk is assumed by a US bank. If the retailer fails to remit payment for the pistachios, the
US bank will reimburse Sapindale Growers for the cost. With one bank on Rapa Nui, this
could pose a possible issue.
Pro forma financial statements and budgets
Annual budget forecasting by a company is done through pro forma financial
statements. These statements reflect future assumptions unlike the hard facts of a
historical financial statement. Pro forma statements are fluid and fluctuate during the
planning process. Pro formas include “the income statement, the balance sheet and the
statement of changes in financial position” (Rollins, 2012, par 1).
Annual pro formas will review and use the previous year’s financial statements as
a basis for creating the upcoming year. Changes in industry, logistics and economy will
adjust the amount of budget increase needed. Changes in inventory, accounts receivable
and the fixed assets are circulated and compared. Once the pro forma is completed, an
analysis will show if there are any potential red flags that may pop up in the coming year.
Having a completed pro forma will be a guide to see where budgets can shift along the
way, especially for any unforeseen issues.

Marketing budget A marketing budget will help build the Sapindale Growers
brand and pistachio product in Rapa Nui. Having an understanding of the current budget
and how much has been allocated to the marketing budget will help guide towards which
marketing tactics can be executed and which ones will need to wait. It will take some
upfront legwork to get all the estimated fees. Once the right budget is identified, then the
brainstorm of where to put those dollars happens. The skies the limit at this point, as the
marketing team is looking for all possible avenues for marketing, traditional and non-
traditional. After a few drafts and the marketing plan is complete, a review of the tactics
and their budgets is done. Each tactic is looked at based on ROI and the involvement to
execute. If something doesn’t fit overall, then it is either modified or replaced with
another marketing tactic.
Selling expense The selling expenses make up half of the operating
expenses. These include all the components of a sales force, including commissions and
salaries, office space and utilities and the creation and distribution of promotional
materials. Sapindale Growers will employ one local sales rep on Rapa Nui as well as an
internal sales team in the Southern California headquarters.
Advertising and promotion expense The advertising expense outlines all
the fees associated with the advertisements ran for that specific period. Advertising
expenses fall under the selling expense section in a budget. The promotion expense will
outline all the giveaways, like branded water bottles or t-shirts, given to consumers for
the campaign. Some types of promotional expenses can be tax-deductible, but will need
to be carefully reviewed to see it was truly not an advertising expense. As mentioned

earlier in this plan, Sapindale Growers will leverage in-home, in-store and out-of-home
advertising methods as well as promotional tactics through street teams.
Distribution expense The distribution expenses are all the costs associated
with the distribution of the pistachios from production in the orchards to the delivery to
the retailer on Rapa Nui. Upon review of possible distribution and transportation methods
to Rapa Nui, utilizing FedEx will be the best option. As pistachio orders for Sapindale
Growers increase, other methods of transportation will be explored.
Product cost The product cost of pistachios includes all the costs
associated with making them. This includes all the costs associated with the growing and
harvesting of the pistachios at the orchard. Then the transportation to the processing plant
for packaging is factored in. In terms of the balance sheet, these costs fall under the
inventory account. Once sold, the balance sheet converts the costs to expenses to be
matched to the sales revenue.
Pro forma annual profit and loss statement The pro forma annual profit and loss
statement is an important document and tool for every company to forecast the ability a
company has to generate profit. P&L statements are looked at monthly as well as
quarterly to make sure the business is staying on track. They are created annually,
typically 4-6 months before the new fiscal year. Identifying the annual revenue, the P&L
then subtracts the costs of running a business. The total of this equitation is the net
income profit.
Resource requirement
Sapindale Growers is a family owned company, who will build their company
with the most talented individuals in their respective disciplines. Sapindale Growers owns

a pistachio orchard in Southern California, complete with processing plant. A master
grower will oversee the day-to-day operations and sit on the executive committee. There
will also be a plant manager who oversees the scheduling and running of the processing
plant. This person will also sit on the executive committee. Both the farmer and plant
manager will have a staff of direct reports. Onsite at the orchards will also house the HR,
Finance, Sales and Marketing teams. The directors of each of these teams will make up
the rest of the executive committee along with the Sapindale Growers owners. Each team
will consist of individuals who exemplify the passion and dedication of the founders of
Sapindale Growers and work together to become a global brand.
Production capabilities of the orchard will be enough to keep Sapindale Growers
in the medium size range, being able to fulfill sales domestically and beginning to branch
out to international sales.
Executive summary
Sapindale Growers has put forth a sound marketing plan to pave entry into the
international market. By spending time early on in the research and budging phase,
Sapindale Growers will be able to make a successful launch into the Rapa Nui market,
offering a product that is new to the locals. Through advertising tactics, Sapindale
Growers will convey the message of the health benefits of the pistachio. As the locals
become more family and accepting of the pistachio, subsequent campaigns will focus on
other benefits. The channels of distribution will prove to be somewhat of a hurdle to
overcome as well as costs associated with tariffs and additional charges by the Chilean
government. Overall, entry into a global environment will prove to be beneficial and
profitable.

References
Brooks, J., Cervantes, D., & Migotto, M. (2008, March). Agricultural policy reform in
Chile. Organistion for Economic Co-operation and Development. Retrieved from
http://www.oecd.org/chile/40268283.pdf
Distance from Easter Island to Los Angeles. (2013). Time and Date. Retrieved from
(http://www.timeanddate.com/worldclock/distanceresult.html?p1=914&p2=137
Easter Island (Rapa Nui). (2007). Pacificislandtravel.com. Retrieved from
http://www.pacificislandtravel.com/easter_island/about_destin/people.asp
Global consumers go sale searching and coupon clipping. (2011, October 12). Nielsen.
Retrieved from http://www.nielsen.com/us/en/newswire/2011/global-consumers-
go-sale-searching-and-coupon-clipping.html
Trachtman, P. (2002, March). The Secrets of Easter Island. Smithsonian. Retrieved from
http://www.smithsonianmag.com/arts-culture/Mysterious-Island.html
Hanga Roa – Shore Services. (n.d.). Noonsite. Retrieved from
http://www.noonsite.com/Countries/EasterIsland/HangaRoa?rc=ShoreServices
Import duty & taxes when importing into Chile. (2013). Duty Calculator. Retrieved from
http://www.dutycalculator.com/help_center/Import-duty-taxes-when-importing-
into-Chile/
Riley, J. (2012, September 23). Promotional Mix – Introduction. Tutor2u.net. Retrieved
from http://www.tutor2u.net/business/marketing/promotion_mix.asp

Rollins, J. (2012, August 24). Proforma financial statements. AAUP Business Handbook.
Retrieved from
http://aaupwiki.princeton.edu/index.php/Proforma_Financial_Statements
Ross, J. (n.d.). Easter Island still attracts more tourists than it can handle. Canada.
Retrieved from
http://www.canada.com/travel/Easter+Island+still+attracts+more+tourists+than+h
andle/920477/story.html

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