Rumchata in Colombia BY: ANDREA NEJAD (Promotional Activity and Communication

Objectives), JACKIE DELUCA, FERNANDO GARCIA, AMANDA GHATTAS, MATHIEU JAEGLI, AND PAOLA SIERRA

Introduction COUNTRY JUSTIFICATION (COLOMBIA)

• 40.9 million people are of legal drinking

age

• Tourism is becoming more popular

• 4.3% economic growth, rising middle

class

PRODUCT JUSTIFICATION (RUMCHATA)

• Spirit market is expected to grow 13% within

the next 5 years

• White Spirits (rum) has increased by 24%

since 2013

• Rum is the #2 preferred drink for

Colombians

Foreign Entry Method• Rumchata will be exported from the U.S. to Colombia

• U.S. and Colombia have a free trade agreement • Trade Promotion Agreement (TPA)

• Main suppliers (market share):• United States (28 %)

http://www.statista.com/statistics/369047/most-important-import-partners-of-colombia/

Importation in Colombia in 2014

Targeting

GOAL: Diffuse the

Colombian luxury cocktail market

with an international brand

by introducing a new, “cool” drink

Ages: 24-40

Middle to upper class

BogotaMedellin

CaliCartagena

Barranquilla

VALS: Experiencers

Adaptation and Branding • Availabilities:

◦ Aguardiente

◦ Coconut rum

•Sales representatives

Colombians first engage in friendship before business.

•Design

Problems and Resistance to Product Acceptance

• Fierce competition for importation of premium drinks

• Horchata is not known in Colombia

• Small number of potential customers

• Traditional drink preferences

Price Escalation

Pricing Strategy •Competitors’ Pricing in Colombia:•Bailey’s ($42)•Ron Antioqueno from Medellin ($36)•Ron de Caldas from Manizales ($38)•Aguardiente ($34)

Recommended price for bar:

$45-55 for a 0.75 ml bottle

Pricing Strategy

• Premium

• Increasing consumer purchasing power

• Emphasis on premium brands

Positioning High Quality

Low Quality

High PriceLow Price

Rumchata

Bailey’s

• Ron

• Caldas

Distribution Strategy

Home MarketLarge-scale Distribution

Out-of-home

Market

Two Possibilities of Distribution in the Spirit

Market

Distribution Strategy (Short-Term) Start by out-of-home market Distribute product to bars/restaurants/hotels

• Touch our targets in the heart of our consumption place

Major brands like Ricard, Havana, Spritz started this way

Distribution Strategy (Long-Term)• Supermarkets

• 60% of the distribution in the country

• Two large companies: • Casino: Carulla & Exito

• Jumbo

• Tiendas • Typical shop in Colombia

Promotional Activity Short-Term

Promotion Objective

Provide a unique personal experience that will allow potential

customers to always think fondly of Rum Chata when making

future purchase decisions

Promotional Strategy

-Push

-Direct Sales - Same representative visits Bars and Restaurants

-Point-of-purchase - Displayed at bars and restaurants.

-Experiential Marketing - “Alive Lounge”

City Population Festival

Medellin 1,999,979 Feria De Las Flores

Bogota 7,674,366 Alimentarte Bogotá Gourmet Food Festival

Cali 2,392,877 Feria

Barranquilla 1,380,425 Carnaval De Barranquilla

Cartagena 805,801 Miss Colombia and Independence Day

Promotional Activity Long-Term Promotional Strategy

Push and Pull Recognize and reward distributors

Above-the-LineBillboardsOnline MagazinesTV advertisements

Control Mechanism “Friendship”Positive and Responsive PR

Communication Objectives & Key Message

•Communication Objective: To successfully penetrate the Colombian cream liquor market by generating awareness and brand building preference by 30%

How? High levels of experiential exposure, position the brand as a high-quality product and encourage retailers to stock the product

•Key Message : RumChata is a high-value imported liquor that provides consumers with a thrilling experience and creates an “alive” lifestyle.

•How? Aim at showcasing brand’s identity and providing the target group with brand experiences so to achieve competitive advantage to other brands by differentiation.

Conclusion• Introduce Rumchata as a premium, “fun & cool” drink

• Introduce and expand Colombian’s interest to the foreign liquor market

• Goal: • Adapt to the culture

• Expand Colombian’s premium liquor market

• Overall, grow as a company

Thank You!Questions?

References https://ustr.gov/uscolombiatpa/facts http://www.tradingeconomics.com/colombia/inflation-cpi http://www.euromonitor.com/alcoholic-drinks-in-colombia/report http://colombiareports.com/colombias-religious-minorities-muslim-community/ http://www.arabnews.com/islam-colombia?quicktabs_stat2=1 http://thesovereigninvestor.com/investment-opportunities/invest-in-colombia-

developing-economy-rising-middle-class/http://www.emarketer.com/Article/Colombia-Set-Reach-286-Million-Internet-Users-2015/1011864

http://data.worldbank.org/indicator/NY.GDP.DEFL.KD.ZG/countries/CO?display=graph