Gallo Rice

Topics: Rice, Marketing, Retailing Pages: 10 (3610 words) Published: August 1, 2007
1. What is special (different) about F&P Gruppo? Why has the company been successful?
First of all, F&P Gruppo describing itself as "the rice specialist" was exceptional, because it was one of few companies in the world so vertically integrated, involved in entire process of growing, milling, packaging and marketing rice. The advantage of such organization was control of the quality and the ability to react quickly according to market changes. The company decided to trade off other products than rice appointing itself as a goal achieving market share leadership through bringing differentiated, higher margin products. F&P Gruppo was investing heavily in Research and Development, because new products were supposed to derive 35% - 40% of total gross margin. Although successful in 8 countries, the company didn't fall into trap of complacency, it always saw room for improvement constantly searching for new strains of high-quality rice and looking for new markets and opportunities. F&P Gruppo was incredibly consistent with its Gallo brand name and Gallo rooster logo, and this consistency resulted in high brand awareness across the countries the company operated in. What is more, as an undeniable production innovation leader the company consistently earned the highest of six quality grades.

2.Asses Gallo's market position and opportunities in Italy, Argentina and Poland. Italy
With its brand present for over a century and 21% of volume share Gallo had definitely strong and stable position on Italian market. Rice was a very popular element of Italian diet and consumers perceived it as quick and easy to prepare, healthy alternative to pasta. That was definitely an opportunity for Gallo Rice producer, who didn't have to spend as much money on advertising campaigns convincing people to eat more rice as it would be necessary in Poland (described below). Widely recognized Gallo's logo symbolized a trustworthy, good quality and somewhat traditional brand and this recognition strengthened Gallo's market position even further. F&P Gruppo's competition was fragmented and generally speaking didn't pose thread to Gallo rice. Important is fact, that Gallo products had a higher turnover than many other food products, which only confirms the conclusion, that its inventory management was efficient, there was a high demand for company products, and therefore F&P Gruppo's market position in Italy was sustainable. Argentina

Gallo was established in Argentina in 1905, held 17.5% volume share and 23% value share of the total retail rice market. In addition to that, Gallo held 48% share in Buenos Aires, which accounted for impressive 30% of the country's population. Therefore, it's easy to notice, that numbers speak for themselves – F&P Gruppo (actually its subsidiary - Arrocera Argentina) was a market leader in Argentina. The consumption of rice in Argentina was high enough to create an attractive market for rice producers. As a matter of fact, Gallo was one of the only companies selling rice packaged in cardboard boxes, convenience of which added to competitive advantage of Gallo over its competitors. Since Argentine retail rice market was fragmented and regional, Gallo faced almost no serious competition. Nevertheless, the company was alert all the time and actively responded to moves of competitors (like in case of Maximo rice). Despite difficult economic climate and high product prices Arrocera Argentina had strong market position in Argentina. Poland

Gallo's market position was completely different in Poland than in Italy and Argentina because of few aspects. First, until 1989 because of Communist regime Polish market was dominated by commodities, where brand didn't have any meaning. Because market forces didn't work, there was no competition, and prices were fixed, therefore producers didn't care about quality of the products and packaging. That is why, rice in Poland had a low quality image and people didn't eat much of it. In...
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