Gallo Rice Italy Case Study Solution
Question No.1
Company’s objectives were to further penetrate in the market by identifying the different market segments and by offering the various products targeting those segments of the market.The company has along history of three decades in market, offering different products around Europe, America, and United Kingdom as well.
Meanwhile, the company also has an objective to ensure that 35% to 40% of the total gross margin is derived from products that were not in product line five years before. Because, the company goal was to achieve market leadership regarding volume and high margin produces high margin products, however, as a result of higher margin, company reinvested a higher percentage of profit in the research and development of rice.
The company has two categories of products. First: the conventional rice products, second: the partly boiled or the dehydrated quick-cooking rice that it recently introduced in the market. Similarly, the purpose of the general rice category is to attract different segments from low to middle class, and high as well. However, for the customer’s convenience, company came up with more products that were partly boiled or dehydrated quick-cooking rice.
These rice took less time for cooking than the traditional rice in the market. So, it can understood that the company has segmented the market categorically. One category for those who cook rice and do not mind what time is being given to cooking, on the other hand the second segment is of consumers who did not like to invest much of their time in the cooking the rice, and those are businessmen, businesswomen, or both employed couples.
The company has long stood in the market that offers various products categorically to different segments of the market. However, the company has always been in front in differentiation in the market against all competitors. Similarly, it is also diversifying its product line in response to increasing segmented market.
The company has offered different products for different segments, meanwhile, the company also differentiates in the product’s offerings like partly boiled or dehydrated quick-cooking rice in the market. Therefore, it can be determined that company has the positioning strategy of differentiation along with segmentation strategy as market demands to respond to the customer with something different as per their needs.
Question No. 5
A dehydrated quick-cooking product Meta tempo roughly took half the time in cooking than the traditional rice cooking time. It took five to seven minutes to cook. Meanwhile, in 1991 this product line accounted for 34.4% of company’s sales in Italy. The Meta tempo products would also communicate the nutritional value to the customers.
Furthermore, consumers in the market perceive the Meta Tempo to be more superior than only partly boiled rice.Therefore, the sales of Meta Tempo are growing three to four times more rapidly than the white rice. The company also has a competitive advantage in producing a product with technology, which will take the competitors many years to understand.
Therefore, the company should focus on the Meta tempo product line rather than create another dehydrated line around the Meta tempo.Since the company has a competitive advantage in producing products against the market players. It would be crucial for the company to step up towards penetrating the existing Meta tempo products in the market.
Gallo Rice Italy Harvard Case Solution & Analysis
Question No. 6
The competition in the Italian market was increasing because the market was much fragmented with many local and other regional millers who were selling their products under their brands. Meanwhile, grocery stores were also fragmented. In the meantime, the supermarkets, and hypermarkets have 60% of all values of sales and 64% of Gallos’ value sales. Indeed the private label sales were also increasing in the market from 13% in 1990 to 17% in 1991..................
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