MARKETING AND INTERNATIONAL BUSINESS DEPARTMENT

INTERNATIONAL MARKETING
NRC 4074

LAUNCHING A PRODUCT IN A FOREIGN MARKET

KARIME ARGUMEDO SEJIN

MELISSA M. BLANCO GARCIA

MARIA J. FERNANDEZ CABRERA

YULEIDY VILLAR RODRIGUEZ

DORIAN EUSSE BOVEA

BARRANQUILLA – COLOMBIA

25th MARCH/ 2018

 1. The Company

Grupo Bimbo, S.A.B. Known as Bimbo, is a Mexican company recognized

mainly in the area of baking for its taste that distinguishes by their quality
and freshness. It started in 1945 with a product line of white bread, toast and
Panques. It currently has a presence in more than 24 countries. The name bimbo resulted from
the combination of Bingo and the Disney film Bambi. Later, the founders discovered that
children in Italian are called bimbo, while in Hungarian, the word means bud and the phoneme
used in China to name it sounds very similar to bread.

Currently Grupo Bimbo, S.A.B. competes with companies that had already established
recognition in the industry, such as Flowers Foods, Inc. , Gruma, S.A.B. de C.V and Grupo
Corvi, S.A. de C.V that offers a wide range of similar product. In order to offer the best quality
Bimbo develops innovative products and healthy through the constant search for new
technologies that allow them to be at the forefront and offer new and better options to their
consumers.

The products we are going to present in this project make part of the line Bimbo® Bread and
Bimbo® sweet baked goods. We are going to manufacture this product, but will be sold under
the Belle, Chapela, Rosco and Roscao brand names. We plan to commercialize the product in
Morocco that is a traditional country, for this reason we are going to take advantage of
positioning and recognition of group Adghal. This company operates three plants, has more than
200 employees and generates annual sales of about $11 million. In this way we will learn about
the culture and business, and share best practices with the different
operation of the group.

The first product we’ll present is known as Bimbo® Soft Honey Wheat
has a touch of honey, making it full of flavor and fluffiness. Ideal for
accompaniment at breakfast. There are 22 slices that you can find in this
20oz bag.
 In addition, we decided to also include is a Soft and sweet vanilla flavored
traditional mexican pastry. Fill your taste buds with the exquisite taste of
Mexico. Accompany them with a delicious cup of hot chocolate. This is
known as Conchas Fine Pastry.

The main reason why we chose these products was because it’s has characteristics that resemble
to the products that usually accompany the meals of the culture to which we wish to enter.
 3. The Political Environment
When launch a product in a new market, all the factors must be taken into consideration,
including the political environment. It´s important to analyze with deep care the current political
situation in the country since the government regulates almost all the factors that affect a
company.
Morocco it´s a constitutional monarchy, the current King is Mohamed VI since 1999. The
country is politically stable, and it’s formed by two legislative bodies: The Lower house and the
Upper house. The general elections took place in 2016, and the next ones will be in 2021. With
the Arab Spring in 2011, some small protests were placed in the country, with in result ended in
the adoption of a more progressive constitution and the election of a new government. Aware of
the fact that investment is a key factor to ensure sustainable and sustained economic growth,
Morocco has liberalized its economy by:

The national privatization

program
The conversion of foreign
debt into investments
The operations of public
services concessions

Consistent flow of foreign

capital

Other sectors have taken

over, including banking,
tourism, energy and
industry
 This new Legal framework is in full accordance with international human rights standards,
including labor code, copyrights, industrial property, freedom of pricing and competition,
arbitration and mediation, and personal data protection.

The labor code matches the basic principles set by the Constitution and international standards as
defined in the UN conventions and specialized organizations that operates within the field. It
includes:

 Prohibition of all forms of cork coercion.

 Effective abolition of child labor.

 Prohibition of discrimination in terms of employment and professions and equal wages.

For international treaties and agreements, the copyrights measures harmonize national
legislation. Also, the law is against of unlawful agreement, abuse use of a dominant position and
abuse of a position of economic dependency. To harmonize the Moroccan trade law with the
international principles there is the arbitration legal arsenal.

In which concern to the Moroccan tax system, this has been codified under the General Tax
Code. The government adopted the Investment Charter that provides company exemptions for
Value-added Tax (VAT) and corporate tax for 5 years. Also, there are industrial parks and free
zones.

The main taxes in the Moroccan system are: The Income Tax (IT), The Corporate tax that
applies mandatorily to income and profits of capital companies, public institutions and other
corporations that carry out lucrative transactions. And, the Value added Tax (VAT) applies to
industrial, craft, commercial and liberal activities as well as import operations.
 The Association Agreement between Morocco and the European Union:
stablishment of an industrial free zone, liberalization of agricultural trade.

FTA with the United States covers all sectors of economic activity, ranging
from the trade goods and services, to TRIPS, social and environmental
issues

Morocco´s FTA with Turkey provides for the gradual establishment of an industrial
free trade zone.
International
Agreements
The Arab Free Trade Zone establish a free trade zone among
several member countries of the Arab League.

Quadrilateral FTA with Tunisia, Egipt and Jordan. free trade zone, It
stablish a free trade zone, total exemption of customs duties.

The National Committee of Business Environment was created to ensure a transparent

scenario for investments, for both national and international companies. This body is chaired by
the Prime Minister. It is composed of representatives of public and private sectors and aims to
identify and implement measures that would benefit Morocco.

The Green Morocco Plan is a national development plan which is aim to the agricultural sector in
the economy of the country. Its main objective is focused on the increase of the productivity,
recovery of production and sustainability of farm incomes. All this through the support for
smallholders with 545 projects in farms in rural areas where the access is difficult. In this plan
one of the pillars is aim to the conversion of cereal crop, this will be an advantage for our
product which its major component is the cereal.
 Source: foodfrommorocco.ma

4. Cultural Variables:
In order to answer the questions regarding the culture of our destiny, a brief analysis on
Morocco’s cultural variables was developed in order to identify what elements could
facilitate the operation of the company. The model used to conduct the study was the five
Cultural Dimensions by Geert Hofstede and the information was retrieved from Hofstede
Insights website. According to this model, a country’s culture can be assessed based on six
different dimensions and each one describes a certain aspect of the human behavior. But in
this paper we will just take into account five of them. Below, we can see a chart with the
gathers Morocco’s scores on each dimension:

Source: The Heritage Foundation, 2017

Power distance: People in cultures demonstrating a high power distance are very deferential to
figures of authority and generally accept an unequal distribution of power. That is why the
greatest overarching barriers to trade in Morocco are lack of transparency in government
procedures and corruption. Although the government is diligently working to improve the
business environment, foreign corporations often complain about these challenges. (Grimsley)
Individualism: the rate of individualism is not very high but as a matter of fact is not very low,
that shows the historical influence that the European culture left in the country, and also the
maintenance of Muslim culture. In this country is expect absolute loyalty to group (nuclear
family, extended family, caste, organization), they take their decisions based on what is best for
the group.
Masculinity: Morocco has been known from its progressive culture although the rate is high,
comparing to other Africans countries they have a low rate of masculinity, women have an
important role in this country and they can aspire to some executive position especially while
talking of family business. (Tidwell, s.f.)
Uncertainty Avoidance: for the European influence in Morocco usually things are clear in
contracts. International and domestic arbitration is accepted and are often used in business
contracts. In order to avoid misunderstanding while doing business
Long term orientation: in Morocco they are focused on the present or past and consider them
more important than the future. They value a lot their tradition, the current social hierarchy and
fulfilling of social obligations. They care more about immediate gratification than long-term
fulfillment.
These five dimensions give us a little view of the strategy that Bimbo used in order to avoid
many difficulties that could present on entering to this country from cero. They were very
cleverer and acquire a local company that represents to them an advantage.

o Strategies used to approach a new market:

The strategy that Bimbo’s used to penetrate the Moroccan market was by the acquisition of the
Group Adghal, a company that was dedicate into the elaboration and distribution of products
(such as sweat bread and cupcakes) in Morocco. For Bimbo’s it was important the goodwill that
GA could give them. Along in the history Bimbo’s could be known for using this kind of
strategy to take the advantage that the companies could offer them. (Staff, 2017).
Morocco is usually placed on the trade map as a part of the Middle East. However, Morocco is
part of the Maghreb, North Africa, which has a different culture and history than the rest of the
Middle East countries and even the other countries on the African continent. Among the main
differences:

1. The position of women in the society and the economy is such that women aspire to
occupy executive positions and are usually active in the management of family
businesses.
2. French is the official business language. In spite of the growing number of Moroccan
professionals that speak English, local distributors and agents often expect U.S. exporters
interested in the Moroccan market to provide product brochures and documentation in
French - this makes it easier to determine if the product complies with local regulations
and standards.
3. Companies should not engage in discussions about policies that some countries had taken
in the Middle East, unless it is initiated by the locals. Avoid commenting on religious
issues or issues concerning to the Royal Family which might offend the local business
person.
4. Learning a few Arabic words and phrases is extremely effective to help develop business
relationships. “Inchallah” is a local expression that literally means God willing but can be
a polite way of saying “hopefully.”
5. While Morocco is considered among the most liberal and tolerant countries of the region,
some business leaders, in spite of their very westernized appearances, may be religiously
conservative, so, when meeting Moroccans, company representatives should avoid
ordering alcohol over a business meal unless the local representative orders first or offers
it.
6. Business representatives are also expected to show up in business attire. Women should
try to dress in a relatively conservative manner.
7. Companies should avoid visiting during the summer vacations ( July through September),
the month of Ramadan and the Eid Al Fitr and Eid Al Adha holidays, which change
every year depending on the lunar calendar.
 8. Companies have to face a strong and active competition from European trading partners,
particularly Spain and France, due to strong historical ties. French occupation of Morocco
from 1911 through independence in 1956 left a strong cultural imprint on the people and
the culture. European firms are familiar with all aspects of Moroccan business culture,
financing, regulations and standards. Almost all business negotiations, written and
spoken, are conducted in French and bids for government tenders must be submitted in
French. (Staff L. A., s.f.).

Bimbo is well known from their main product ‘bread’, and bread takes an important role in
Moroccan diet. It is always on the table an eaten with almost every meal. Bread is fitting with the
traditional cuisine of Morocco that consists of tajines, stews and soups. What’s staggering about
“bread” in Morocco is primarily made by all women at home and often twice daily. This results
in fresh and delicious breads of all kinds from flatbreads to pancakes.
Bread in Morocco is a key component of any Moroccan diet. There is an ancient proverb,
“manage with bread and butter until God sends honey”. This ancient saying affirms that there is
availability of bread to all groups in Morocco.
For Bimbo the audience is very wide, because bread is an important product in the diet of
Moroccans, their main fight could be that bread is usually made at home, their products should
be as good as locals ones in order to have that piece of market.

o SWOT analysis:

We will create our own SWOT analysis in order to determine how possible Bimbo’s allocate
their resources in Morocco, in a manner that result in the highest possible potential for revenue
growth and profitability. It is to identify the most critical areas that need to be improved in order
for the business to be more effective. A realistic assessment of their weaknesses show that the
cultural differences could turn into an opportunity by acquiring a local company, and so on we
identify many factors that determined the course of the company in a complete new culture.
 Strengths Weaknesses
 Broad range of portfolio.  Low Operating efficient.
 International.  High debt equity ratio.
 Goodwill Local Company.
 Product innovation.
 Well – established.
Opportunities Threats
 Grow in emerging markets.  Regulations.
 Opportunities in local food.  Taxes.
 Sponsorships and endorsements.  Competition.
 Homesick products.  Different cultural preferences.
 Price increases (raw material).

o Product approach:

Bimbo’s have an important advantage because the Group Adghal has been positioned in the
market from almost 20 years and they had sells from almost 11 million of dollars annually, and
they have over 200 collaborators over the country. So, Bimbo’s will not change the names of the
products in order to keep the demand, because a change in the names will cause an impact on the
consumer even if is the same product. And they will keep selling the local products, but they will
add a broad range of their products. Bimbo’s expect to improve the demand from the broad range
of products that they will add to the local portfolio. GA haves 3 plants of production, Bimbo’s
will improve and expand the installation in order to cover the demand from Morocco and the
closed areas.
They will have a special team in order to have a clear view of what these new culture needs, and
how they can adapt their products in order to get more consumers, and to approach that locals
have an important consume of bread, and explode that need and make them buy more and not to
prepared it at home.
https://www.grupobimbo.com/en/ourhistory

http://www.expertosenmarca.com/historia-de-marca-bimbo-alimentos-de-calidad/
http://www.hoovers.com/company-information/cs/company-
profile.grupo_bimbo_sab_de_cv.136e76ba370958b0.html

https://bimbousa.com/

http://www.bakingbusiness.com/articles/news_home/Business/2017/05/Bimbo_enters_Indian_m
arket_wit.aspx?ID=%7BD63609D2-1F51-4962-88F8-5293FA3AE10B%7D

https://www.gov.uk/government/publications/overseas-business-risk-morocco/overseas-
business-risk-morocco Invest in Morocco website, Business climate, Taxes

http://themoroccantimes.com/2016/07/20181/the-business-climate-in-morocco-an-
overview-of-the-environmental-perspectives-and-economic-landscape