[14] Concept for the future of the Canary banana sector

Just like any sector, the Canary banana sector is facing competitive forces that condition its future. In my opinion, the sector has five strategic pillars to be able to confront these forces.

The first pillar is the economic aid that the different public administrations receive and the maintenance of levies on other bananas. The aid would ensure minimum income for all farmers and the levies would prevent other bananas from being sold at extremely low prices and thus bringing the prices of our bananas down so low that their cultivation would no longer be viable. We only have to look back to realise the importance of this pillar and the great work done by ASPROCAN for the sector with the help of the Ministry of Agriculture of the Canary Government.

On the level of marketing mix the aid works on the price policy as if this was a cost producer, enabling our bananas to be sold at lower prices. The great problem of all aid is that the competitiveness it gives us does not depend on internal factors, which the sector can control and decide, but rather on external factors where the political and commercial pressure of the multinationals of all kinds and origin have a lot to say. I therefore believe that although it is necessary to fight for aid and the maintenance of levies right to the end, the sensible thing is to build the future on the basis of our capacities and strengths, and it is here where the other strategic pillars come into play: the brand value or capital, exporting, quality and union in Asprocan.

The sector’s second strategic pillar is the value of its “Plátano de Canarias” brand. To understand the important role that this pillar plays in the sector’s competitiveness, it is interesting to remember that the guru of business strategy Michael E. Porter divides the large general strategies into three to face the competitive forces of the sector: to be cost competitive, to be competitive by differentiation or to be competitive in a market segment.

It is clear that we cannot beat the foreign banana by competing on the level of costs and so all that remains is for us to be competitive by differentiation, but it is also equally clear that Plátano de Canarias is objectively better than foreign bananas because we excel in what consumers most appreciate, which is the flavour. Therefore, we must compete by enhancing this distinction. All products that want to be distinguished use a brand, and all brands that want to inform end consumers of their difference or the reason for being chosen use advertising.

However, for Plátanos de Canarias, to label them with our brand and to do advertising is still more important for the simple reason that our distinctive strength, the flavour, is something that is not seen, whereas the strength of the competition, the size and good appearance, is something that is seen.

A result of Asprocan’s consistency in continuing with this strategy of differentiation recommended in 1992 by Agr! with regard to the imitation of the foreign banana is that, according to the latest studies on the effectiveness of advertising made in 2012 by Emer-GFK, 89.7% of consumers prefer the Plátano de Canarias and statistically 87.7% are willing to pay at least 30 cents per kilo more for Plátano de Canarias than for foreign bananas. What’s more, in the last 5 years banana consumption has almost doubled with respect to other fruit, according to MAGRAMA data.

Both figures reflect the very high value or capital of the brand generated by the advertising. We only have to think of how much income would not have been received if our banana had been sold without these extra few cents since the foreign banana came onto the market. However, the effects of advertising are limited; if these 30 cents are exceeded, part of these 89.7% of consumers who prefer Plátano de Canarias might go over to foreign bananas, and if the price of foreign bananas is very low and the offer of Plátanos de Canarias is very high, as happened in 2010, disaster is unavoidable. It is here where the third strategic pillar comes into play, exporting.

Continuous, profitable exporting to Europe is the sector’s next challenge. If 40 or 50 million kilograms were sold throughout a year, 10% of total production, and above all at a good price, we could kill two birds with one stone: the peninsular market offer would be regulated, and therefore prices too, and surpluses would be avoided.

Up to now, this has been attempted individually and in isolation but has not been achieved for several reasons from which lessons must be learnt. The product that has been sent was surplus here and unwanted, it was not properly matured and supply was not consistent when the prices were better in the peninsular, and above all the attempted competition with foreign bananas came in terms of price. Now with everything that has been learned and by creating a free participation consortium, Asprocan is going to try again. It is not going to be easy or fast and my recommendation has always been to position Plátano de Canarias in Europe in the segment of gourmet products, as a product with high-quality, presentation and price, fighting for a market niche which would appreciate it and be able to pay the price. My reasons for this recommendation are that this “Canary Islands” niche exists, is known and appreciated, assures profitability throughout the year and is the only one where we can be competitive. However, to achieve this European market segment things have to be done well from the beginning with the quality, presentation and advertising, and all of this has also to be maintained in time.

The fourth pillar is quality. the quality is everything that consumers recognise as such and are willing to pay for. Agr! has striven for many years to help consumers to recognise flavour as a key factor of quality in a banana, and not its appearance, for this makes us more competitive over foreign bananas. Thanks to this, the word “Canary” associated with bananas makes them perceived as having greater quality for consumers, who are therefore prepared to pay more. But it is possible and necessary to ensure that Plátanos de Canarias not only always have a better flavour, but also a better appearance, and to do everything that is possible to achieve this from the time of harvesting until the fruit’s final presentation at the point of sale. In every market there is a high, medium and low segment and growth in TOTAL quality would enable the three segments to be covered. The IGP could regulate the quality standards to allow this segmentation and a distinct high range and to prohibit bananas with a poorer appearance from being able to be called “Plátano de Canarias”. I would also regulate the use of the name “Canary” associated with other brands, something which is essential if we do not want to fall into chaos and the destruction of the brand which has been so difficult to revalue.

The fifth and last strategic pillar is ASPROCAN itself. Its existence allows the other 4 pillars, and this is the reason for its importance. In order to be able to objectively assess its importance and the work of its leaders, it would be necessary to compare what has been achieved in it and what has been achieved with advertising. In any case, the fact that a whole sector is united gives it great strength: the possibility of adopting new common policies to be ever more competitive, an exceptional example of how far it is possible to go is Zespri, which began as Asprocan and now is a body that decides on the policies of price-quality, distribution and communication which the whole sector observes, giving exceptional results for the farmers.

In conclusion, if the sector continues to be united and ensures that future generations continue to appreciate our brand and also increase the price that they are willing to pay for it, and if a small gap is also opened up in the European market, there is no need to fear the future or the problems that it might bring.

 

[13] [01] Ideas to increase the consumption of quality wine

Asking oneself what has to be done to increase the demand and sale of quality wine is rather like asking oneself what you have to do to be happy.

We all want to be happy, we believe that what we do will make us happy, we know that it is possible because some have achieved it and we know there is no magic formula but that it is rather the result of a combination of internal and external factors. Although if we are not happy for a long time we will have to recognise that we are doing something wrong.

The same thing happens with wine. A series of internal factors of the producers and external factors of the environment will determine the future consumption tendencies. But today something unique and historic is happening among the internal factors: never before has there been such good wine in such large amounts and so well distributed (nationally), so well presented and wines with such acceptable value for money. So what external factors are preventing consumption from increasing more? What would the sector or the administration have to do to achieve this? And, something which is fundamental for me, how should the wine be positioned in order to increase its consumption?

The answer to these questions is the reason why some sector group or the administration set up a competition for ideas or an advertising campaign. For the moment, I will give my solution and I hope that if my view seems right to you, you do not fall in the syndrome of “the given ideas are not valued”.

I consider the solution to this problem first of all within the framework of strategic marketing and not only on the level of advertising; therefore, as a reflection on the market segment in which work should preferentially be done and what positioning we believe we have to achieve in this segment to make people more prepared to consume wine. This positioning will reflect a single value put forward as an advertising promise in time and on all publicity supports and creativities. Therefore we must get it right as the consumption of quality wine in Spain has been falling for too long, even since before the crisis.

Market segment

As the question is to increase consumption, we should first address all consumers – this would exclude those who do not like wine and those who cannot drink it for reasons of health. However, I believe that we particularly have to aim at young people and young couples to make moderate wine consumption form part of their daily habits as soon as possible.

I don’t know if you would agree with me that we are not making it at all easy for these young people. I would divide wine consumers into two large groups: “the community of the knowledgeable” and “those who haven’t got a clue”. Both groups naturally want to enjoy a good wine, but the first know about brands, about years, wineries, denominations, prices, etc., and the second, if they are clever and humble, will ask for a good wine that is not expensive, but if they do not want to show that they haven’t a clue or do not want to complicate their existence before such a range of brands, denominations of origin, varieties, prices, origins, etc. they will ask for a beer.

What I mean is that if we want to create a consumer wine culture amongst the young, we have to make it easy. Exclusive is the opposite of massive and I believe that the intention is to achieve mass consumption.

My first conclusion is that young people have to be offered good wines that are not expensive, and there are lots of these. We have to encourage them to ask for “a good wine that is not expensive” as a sign of intelligence and not give them a complex because they are not professors in the subject. This does not exclude promotion amongst those, who will never be a majority, who wish all of the marvellous knowledge of the world of wine.

Positioning

The positioning is something that is achieved, that occurs in the minds of our target in time. It is the image they have of our product in comparison with other alternatives in a certain environment.

All products or brands that have been on the market for some time and have a certain notoriety already enjoy a position in the minds of consumers. This image will be motivating, indifferent or dissuasive. They must have a more updated and complete study of the image that young people have of wine, of the values they associate with it and in what environment. On the basis of this information, we would know the current position and we could conclude whether or not it is of interest to strengthen or change it. I can guess from the facts and the hypothesis I am going to consider is that it has to be changed and repositioned. Given the amount of good wine that is not expensive that we have available to us, its consumption should increase much more, but doesn’t.

So what positioning do I choose? What is available to us to make our young target think? And therefore, what message do I have to give for them to show more interest in wine?

After analysing the SWOT of wine, I choose to act on a motivation based on which I will propose the positioning, and on eliminating a brake.

The brake to be eliminated is that young people believe that it is not healthy when, consumed with moderation, it is good for health as many scientific studies show. But to make this healthy aspect the battle horse of our advertising seems to me to be a big mistake for two reasons: one is that it is generally very risky, and still more so because we are talking about wine, to consider our position in the environment of health, for legislation is very strict in this area; and secondly, I do not believe that the greatest motivation for increasing consumption lies in this attribute.

The motivation

In order to define my positioning proposal, first I am going to define the environment and then I will choose a value that makes wine (in this environment) the best choice.

With respect to the environment there is something that is so obvious it mustn’t go unnoticed: wine is mainly consumed with a meal. We therefore have two large areas of consumption, at home and outside. As we usually have dinner and some people have lunch more at home than outside, this must be the environment where we try to increase consumption, and this means supermarket purchases, another clue.

With respect to the chosen attribute, I think that we are faced by an other obvious fact that can be experienced, which is that when we are going to have lunch or dinner and the meal is placed before us, if we are hungry and we know we are going to like the meal, all of our senses concentrate on enjoyment. This is one of the few times of the day left for us to enjoy. Even if we are on a diet we will eat less and more healthily, but something that we fancy, that we do not dislike, for lunch and dinner are times for sharing and enjoyment.

My strategic proposal to truly increase the consumption of quality wine is that young people should be motivated to:

  • Drink a little good wine every day and not just at the weekend.
  • Have some at lunch and above all at dinner at home.
  • Based on the attribute (advertising promise) that with a little wine with lunch or dinner dishes become much more enjoyable and the moment is more rewarding, and also that it is good for one’s health. This “mass” strategic approach requires us to make it easy, and with the more than 40,000 brands there are in Spain, we do not exactly do this. There are too many and it is difficult to know which to choose even if you know the kind of wine you like. The ideal thing would be that people could find the wine they want easily even though they do not know the brand, and this is not something that happens. Along this way, I recently proposed a new idea to our DOC Rioja customer.

I would therefore position wine in the environment of the home and among the young and not so young, people who know how to live and enjoy life at all times and in all places, and above all at dinner, as “the prize for the warrior” after a hard day. A positioning more in lifestyle and emotion than of the product.

And to finish, what I would never do would be to try to copy or compete with beer in aspects related to communication, but to create a place for wine with its differential values.

 

[12] Ideas to increase the value of Spanish olive oil in traditional markets

Following a general campaign to promote the olive oils in several European countries where the aim was to increase sales, in this article I once more consider how to increase the value of Spanish olive oils in foreign markets.

When the value of a product is to be increased, the logical general competitive strategy is “distinction”, which in an agricultural food product is generally based on a greater quality or some special feature.

All of the products that wish to increase their competitiveness and value in this way use a brand and all of these brands use some kind of advertising communication to inform consumers of the distinction and value of these products. The more end-users who know a brand and the more they are willing to pay for it, the more the brand will be worth.

A distinction that is not communicated does not exist and can therefore not be assessed. It is not an option to invest more or less in advertising communication when competing for distinction, it is a need. It makes no sense to invest large amounts in machinery, technology, R&D+i, etc. to achieve great quality or singularity, and nothing in communicating it. If the strategy were to compete with low prices and large volumes, the right strategy would not be distinction, but rather costs, and it would be necessary to invest in everything that might reduce them.

So what happens to the Spanish brands that have a distinctive value for their great quality and which, due to a lack of budgetary assignment, have not been able to invest in advertising communication? To start with, the end consumers will not know them. If they appear habitually on the line because their quality, their cost-value, their awards, etc. have meant that importers, distributors and purchases of distribution appreciate the brand, time and purchase repetition will ensure that the end consumers at these points of sale get to know it and appreciate it little by little.

When the consumer in a country is faced by one of these “unknown” products on the line, an image of the oil will be created by other paths which are not the brand. Principally, if they have not tried it before, what conditions its assessment and purchase will be: the price – if it is cheaper than the other brands it will be thought to be of small quality; the design of the container, which will also be compared, and finally; the origin.

With respect to the origin, when an olive oil consumer in North America or Europe sees that the oil is Spanish, they will not react in the same way as a consumer from Brazil, Mexico or China. If they do not know the private brand, the Spain country-brand will be what conditions the sale, along with the price.

Knowing how the Spain origin affects the purchase process in each country and why will be an important factor in decision-taking when exporting. On this point and under the prism of marketing, I divide the foreign market of our olive oils into two large groups: the group with the “Spain” origin is a brake on achieving better prices (as Spanish oil is considered to be of less quality than Italian, something backed up by the lower prices at the point of sale, which creates a vicious circle), and the group where the “Spanish” origin has a positioning to be built, which can be seen as an opportunity.

The first group is mainly represented by European and North American countries, the traditional foreign markets of Spanish olive oils, and the second group is formed by the new markets of China, India, Brazil, etc.

The fact that in the markets where it has traditionally been exported, it is considered a “second-class” oil just because it is Spanish is what is described in many market studies1 and which causes a lot of harm, although it cannot be generalised.

To know why this happens, we have to understand the process of building the positioning of a brand. In this case the “Spain” country brand in the specific environment of the international olive oil market.

Something curious about this process is that people are going to form an image of our olive oils simply because they are Spanish, and when they compare them with oils from other origins they will position them with a certain value in parameters of quality and price, without even trying them.

This happens because the positioning is created in our mind through everything that reaches our senses. Everything communicates: what is seen at the point of sale (designs, offers, brand, etc.) what is heard about Spanish oils, what is said by the advertising of the Interprofesional del Aceite de Oliva Español (IAOE) about the Spain origin, what the private brands say in their advertising, the place where it is sold, the price and finally the quality of the oil itself.

All of this gradually builds a certain positioning of Spanish oil in time with respect to the other origins, which will condition its purchase and value.

From my experience in the agricultural food sector, of all of these “communicational inputs”, the quality and price are what are most determining in building a certain positioning if there has not been advertising communication.

And as the present positioning is always a consequence of the past, it may be deduced that in the past Spain exported olive oil to the traditional markets which did not strictly observe the quality criterion 2 At the same time and alongside this, the Italians worked more on real and perceived quality through advertising presentation and communication 3.

All of this is shown today by a price difference between the Spanish and Italian olive oils which have turned these traditional markets into conditioned markets not very willing to pay more for our oils.

However, in the same way due to the large amount of Spanish extra virgin olive oil of very high quality and presentation that is being exported more and more today to these conditioned markets, I can also conclude that in the future the “second-class” positioning that too many consumers and purchasers in this country still have will disappear. The distance will be eliminated between real, present quality and the perceived quality of the past.

With these reflections, I intend to give some ideas to help to shorten this repositioning time, so that Spanish private brands enjoy the “Spanish” origin as a factor of revaluation and not quite the opposite as soon as possible.

Seeking examples in other sectors, we can see that Zara does not have much interest in proclaiming its Spanish origin, because in the fashion world the “Spain” origin gives no value. However, in the agricultural food sector it cannot be admitted that in such important market as the North American or European, the “Spain” origin gives no value today. I therefore believe that we have to do whatever we can to reposition our “Spain” country brand in these markets.

Therefore, to accelerate the process I suggest that ideas are provided and work is done simultaneously in combination on all levels of the marketing mix: product, price, distribution and communication.

 

Product

The product and its constant quality in time are the basis of everything. This repositioning process could not be started if the product was not at the right level, and our excellent extra virgin olive oils have long been at the right level. Therefore, our problem in these countries is not one of real quality, but rather perceived quality, one of positioning in the mind of end consumers and purchasers.

Therefore the first idea I propose refers to the product and it is to create a new category of super extra virgin olive oil with exclusively Spanish varieties. To internationally present a high-quality oil which can only be produced in Spain with local varieties; this prevents comparison and therefore contributes to destroying the second-class positioning. If I am unique and singular, I cannot be compared. This idea would be like creating “100% Iberian oil” with its regulations and controls and accompanying it with presentations in North America and Europe as “Spanish novelty”.

Another idea to erase the second-class positioning would be to ensure that a Spanish brand, and not an Italian one, is top of consumers’ minds in terms of quality and notoriety and therefore top in sales within a time of three or four years.

To achieve this requires great economic resources during the launch and construction of the brand and therefore a project of this size requires the union of companies and cooperatives with vision that have already invested in facilities and technology and now with quality and quantity want to come together to create a single, powerful and top brand. It is ambitious but I think it is worth trying, for the whole sector would benefit.

If this were achieved, the present union of the selector on extra virgin olive oil would mean that in the “conditioned” countries, the general olive oil campaigns and the campaigns of the “Spain” brand would coexist and help this hypothetical brand resulting from the union.

I also suggest that all kinds and categories of olive oil products should be presented on these markets with some innovation, provided they give value to consumers and purchasers.

In these “conditioned” countries which have an old image of the quality of our oils, “the new” would help a great deal in the repositioning. Therefore I think it is important to invest in R&D+i now. Everything we do to be the first or the only ones in any important aspect will help the repositioning if it is well communicated.

As the product also includes the container, the extra virgin olive oil might call an annual competition of ideas and designs for the containers used in hostelry, and here a lot of work has to be done. The briefing should suggest that these containers transmit the “Spain origin” in some way.

Finally, in addition to communicating the values of health, work should be done in the area of flavour within the product policy. I would create a work group to study the forms of cooking, tastes, beliefs in each country to create new oils and presentations that adapt to the different tastes and requirements, for what we like in Spain might be a brake in other countries.

Price

We have a large problem with prices in these countries as a vicious circle has been created that we must break. Our positioning behind Italian oils means that people do not want to pay the same for Spanish oils, and as they are sold cheaper this induces people to think that they are worse. To demonstrate to purchasers in the commercial distribution and HORECA channel that Spanish olive oils are as good or better there are prizes and tastings, but as this information sometimes fails to reach the wider public, people remain unwilling to buy oils at prices already held by the Italians.

As the important thing is to begin to appear more and more with the same or higher prices than the Italians to leave behind the second-class positioning, I suggest that in their range of olive oils and prices exporting companies should squeeze the Italian prices by commercialising on at least two price and quality levels, one boldly higher than Italian prices to create image, and another below to generate volume.

The worst thing that can be done if we are to increase the value of the Spain origin is to nurture price competition between the Spanish extra virgin olive oil brands, for this denotes little vision and the whole sector ends up losing out.

Distribution

People travel and see how Spanish brands appear in the best supermarkets and points of sale. Our volume and variety of olive oils is so large that we can allow ourselves to be present in all market segments, but for the goal of repositioning in the “conditioned” countries it is important to be present in the best gourmet shops, hotels and restaurants, and with large presentations. Extra virgin olive oil could report where our oils can be found in each country, and the Spanish hotel chains could offer Spanish extra virgin olive oils in their restaurants in all of the countries where they are established.

Commercial communication.

As I said in a previous article, I believe that one of the main communication objectives of extra virgin olive oil must now be to eliminate their second-class positioning in quality-price in the “conditioned” countries in order to help to increase the value of our oils through their campaigns.

In the tenders, the agencies must propose how and on the basis of what the old positioning will be eliminated, and what the new and unique positioning of Spanish oils must be. Once this has been approved, I believe that it should be applied and adapted in each country by local agencies (whether or not they be multinationals).

Another high potential communicational factor is the innumerable number of prizes our oils are receiving. The companies receiving these prizes lose nothing if they include in their press flyers that they are “Spanish oils”. The repositioning of the “Spain” brand benefits everyone and can only be achieved between us all.

Finally, in the communication policy I once more recommend that all extra virgin olive oil campaigns should add up and create synergies on the level of communication; this is something that would be achieved with a strategic communication plan. Campaigns which as far as possible must be at the service of the interest of Spanish private brands, which in the end are those that sell. They must analyse the time and money that have to be invested in each country for the advertising campaigns to be effective from the start. They must intelligently change the positioning of Italian olive oils (which have just been reported for selling Spanish oil as Italian). They must use internationally prestigious Spanish prescribers in each country, choosing them depending on whether the objective is repositioning or notoriety and finally, my recommendation is that they should intensify the internal communication in the sector and enable ideas and proposals to be gathered.

As for the new unconditioned markets, here there must be a double marketing objective: firstly to increase the consumption of olive oil and secondly to ensure that Spanish oil is preferred with the positioning considered most adequate.

It would be a shame and an error to enter these countries competing in terms of price, for this would create a positioning for us that is far removed from quality. In my opinion, it is necessary to enter with great quality, presentation and medium-high prices in the first stage to create image; later the whole of the market will be gained and segmented without needing to drop prices, as we will have gained a reputation. Otherwise in time we would find that we had the same problem as we want to solve now in markets conditioned by quality, prices and presentations of the past.

I will comment on my ideas for the Spanish market later.

Footer page 1 The proof of this is the result of a study in the United Kingdom and France carried out by FDS in 2010 regarding consumption habits in these countries in which less than two thirds of those interviewed knew that Spain produced olive oil; Italy appeared as the main producer of olive oil in the world and only one out of every six consumers preferred Spanish oil for its higher quality.

Footer page 2 In fact before 2002 the majority of Spanish exports outside the community were olive oil and not extra virgin olive oil, but today exports of extra virgin olive oil now double those of refined oil.

Footer page 3 According to data from Kantar Media, in 2011, Italian private brands invested more than 4.2 million dollars in conventional advertising, whereas in the same period Spanish brands invested 169,000 dollars.

 

[11] Iberian ham: The jewel of the crown in danger

In 2011 I wrote “truths, lies and Iberian ham”. Later in 2012 I extended this work as follows.

“In the evenings when I am tired and at home, I make up a story for my three little children; they like this much more than reading a story. A few weeks ago I couldn’t think of any story so I told them the one about the Iberian pig. I think this is a good way to introduce my ideas and conclusions about the Iberian pork sector.

“A long time ago, more than a thousand years ago in a very special place called the forest, there were some piglets living almost in the wild. The farmers looked after them a lot because they could make the best ham in the world with them, the ham that we so like.

These piglets lived free in the pretty forest eating grass and acorns. So that they would not be short of food, the farmers who looked after them also looked after the oaks and holms of the forest. And if they didn’t have enough food with all of this, they gave them fodder.

For many years they all lived happily. But one day, some very ambitious men saw that people paid more for a ham if it had come from these piglets and thought that they could make a lot of money if they bred many, many piglets, and so they began to do so. But as there were not enough acorns or space on the forest to breed so many piglets, they decided to give them only fodder and breed them out of the forest, locked up in warehouses just like they do with the white piglets.

This was a cheaper and quicker way to breed so they began to earn a lot of money… but do you know what happened…? Well the people couldn’t eat so many hams and the hams from these piglets were not as nice, so to be able to sell them they began to offer them cheaper and cheaper.

Then a tragedy occurred: people stopped wanting to buy from the farmers who had always bred the piglets in the forest and who spent a lot of time and money producing such a good hams because they thought they were the same as the others, as they were also called Iberian, but were much more expensive.

So little by little they ran out of money and could not look after the piglets and the forest as they had done before, and if this wasn’t corrected one day, piglets, forest and farmers could all disappear.

When I got to this point in the story, my children desperately asked me how it went on, I said that it was a story, not a tale, that it was still going on and that I would tell them when it finished.

If drastic decisions are not taken, the story could have a bad ending. In the short term for the farmers and industrialists of the extensive part of the sector and in the medium-term, and as a result, for the intensive part. You just have to see the census of Iberian pork(1).

http://www.magrama.gob.es/es/alimentacion/temas/calidad-agroalimentaria/calidad-comercial/mesa-del-iberico/riber-publico/

SPAIN 2008 2009 2010 2011
Pure Iberian acorn 283,052 250,487 252,385 114,473
Iberian acorn 620,194 548,902 361,053 360,590
Total Acorn 903,246 799,389 613,438 475,063
Pure Iberian recebo 19,747 20,496 3,445 1,668
Iberian recebo 42,694 28,593 12,372 14,047
Total recebo 62,441 49,089 15,817 15,715
Pure country Iberian cebo 1,271 15,215 5,199 2,520
Country Iberian cebo 8,028 31,654 37,888 33,596
Total country cebo 9,299 46,869 43,087 33,116
Pure Iberian cebo 213,102 93,681 71,747 38,338
Iberian cebo 2,982,957 1,920,464 1,833,891 2,055,866
Total cebo 3,196,059 2,014,145 1,905,638 2,094,204
Total pure Iberian 517,172 379,879 332,776 156,199
Total Iberian 3,653,875 2,529,613 2,245,204 2,464,099
Totals 4,171,045 2,909,492 2,577,980 2,621,098

CENSUS OF ANIMALS Source: MAGRAMA. RIBER PUBLICO.

The problem faced by the different players involved in producing Iberian pork in the forest and in the commercialisation of their by-products is much more serious than it might seem. I was surprised to see that it has now even gone beyond the present subject of discussion: the denominations of the different types of Iberian ham, whether or not they meet the regulations and the subject of the pure or crossed race.

I believe the core of this problem, which has only just started, lies in the type of business competitive strategy used by the two types of companies in the sector, the intensive and the extensive, competitive strategies that are totally opposed and incompatible.

There are several types of hams for consumers: ‘serrano’, ‘Teruel’, etc. Iberian ham is one more and is positioned as the best. According to ASICI study, 80% of consumers see it as a single type of ham, for as it is called “Iberian” they wrongly believe that it comes from the Iberian pig bred on acorns in the forest. But the fact is that although they only see one type of ham, they will still mainly find two types of ham on the market, one type made from pigs bred in an extensive system and others from an intensive.

Both business models have a totally opposed competitive strategy, as Michael Porter said. While the extensive sector competes with a strategy of distinction based on quality and high production costs, passed on to the consumer with the brand name of “Iberian”, the intensive bases its competitiveness on a low-cost strategy, so it is highly price competitive, but they are both called Iberian!! A time bomb.

This competition is totally unfair and disloyal, as thanks to the name of “Iberian”, the intensive sector has the advantage of distinction and the image achieved for many years by the extensive sector, to which it adds the advantage of price. The consequences are logical: the price of intensive Iberian ham brings down the price of the extensive, there is surplus offer and the worst thing is that due to disinformation, thousands of consumers wrongly buy Iberian thinking that it comes from pigs bred in the forest eating acorns, when this is so in under 20% of cases.

We are faced with disloyal competition based on consumer disinformation arising from the past and the result of a thousand traps in designing and preparing labels, inducing them to think that “Iberian” is the same as “forest” and “acorn”.

How can all of this be solved in such a way that both sexes can coexist profitably in their market segments? Is it possible? As Agr! made the first advertising campaign for the sector, I assume my responsibility for “giving” my recommendation as a consultant clearly, simply and briefly.

In my opinion, they are two possible paths:

Either the rapid, total separation of the extensive sector from what is causing it harm, the intensive sector, by informing all purchasers and consumers that what they are buying when they choose “Iberian” (been bred in the forest eating acorns) only happens in the pigs of the extensive sector.

Or to put “the things in their place” by making sure through a large communication and advertising campaign that 100% of Spanish purchasers and consumers are perfectly informed of the differences, the breeding process and feeding of the two large groups of Iberian ham.

Depending on the chosen path, it would be necessary to develop a strategic plan with a different communication and recommendations on the denominations of the different types of Iberian ham.

If the first part was chosen and consumers failed to stop thinking that “Iberian“ is always synonymous with “forest” and “acorn”, the legislation should be adapted to the reality of what consumers believe to put an end to the “deceit” and only allow the name of “Iberian” to be given to ham really from Iberian pigs bred on acorns in the forest. Otherwise consumers would be allowed to be “officially” confused.

Continuing with the first path, another argument for the extensive sector to be the only one able to use the term “Iberian” comes from the reality of the market. 90% of consumers most appreciate the flavour of an Iberian ham, which is something that depends fundamentally on the “place” of breeding and feeding, and not on the race. Although the Spanish use the same varieties of grape as the French, we are unable to call our sparkling wines champagne, due to the “place” where the grape and the wine is produced, amongst other reasons.

The second path, that of informing to put an end to the confusion, will take more time but in the medium-term everyone will benefit and a new stage will start where each quality will have its price and Iberian ham from extensive production will once more be appreciated and its sales will surely be enhanced. Furthermore, large less well-off segments of society will be able to discover that they can also enjoy Iberian ham.

Another key element if one chooses to inform consumers is the choice of communication to put through the Asici advertising campaigns. Here too there are two opposite and incompatible paths in which the consumers are either correctly informed or confused. To begin with, I would simplify the regulation and thus make it easier for consumers to choose their Iberian ham by reducing the denominations to just two: if the ham comes from extensive bred pigs, “Jamón de bellota” [acorn ham]; and if it comes from intensive bred pigs, jamones de cebo [feed hams]. I would also use a red label for the first and the yellow label for the second. These are the colours of Asici and the Spanish flag.

The second thing I would do is obvious; to stop confusing the consumer in the product with the use of images of acorns or the forest on ‘cebo’ ham labels and when communications are made that include both types of ham, such as the television campaigns.

The third thing would be to doubly inform on the product itself with the red or yellow labels, where this is reported with the word acorn or ‘cebo’ (it would be ideal if this were an official regulation) and I would also use a small diptych of how and where the corresponding pig has been fed.

In addition to advertising resources, many more disciplines and ideas could be used to inform, which we will pass on to Asici in due time as one of its marketing-communication agencies. I mention this here and now because after carrying out the “study on the traceability and labelling of Iberian pork” with CREDA, I think that urgent action is needed, as we have seen that 90% of the ‘cebo’ sector misinforms consumers on their labels.

I believe that the whole commercial communication campaign should deal with acorn ham and ‘cebo’ ham as equal, for the two are high-quality “Iberian” products with an excellent flavour in comparison with the rest of hams. The communication must focus on the descriptive and not on the comparative, for any communication that might run down ‘cebo’ as Iberian also harms the acorn ham.

I know that most of the sector has crossed interests with both types of ham, but I believe it is possible to give prestige and sell a lot of ‘cebo’ ham without using and harming acorn ham or confusing consumers“.

This was the article written in 2011 and extended in the same year. At this point it is worth mentioning that in June 2012 we stopped working for ASICI of our own will. This decision is due, on the one hand, to the fact that I do not believe there is unity in ASICI in the will to inform consumers, restaurants, distribution, etc. of the true differences between each type of Iberian ham. We can see this in several ways: they continue to confuse consumers on the labels of their ham by giving images of acorns and Holm oaks; images of the forest have once more been used in a television commercial when this image only represents a small part of the sector, to give but one example.

What’s more, in our stage working for ASICI, any descriptive and informative proposal from Agr! was understood by ASICI as comparative-misdemeanant, which created tension in which it was very difficult to work. Given the lack of will on the part of ASICI to inform, all of these circumstances added up and our team reached a conclusion: they believed it was impossible to achieve the objective that ASICI had originally commissioned us (that 90% of Spanish society should be able to distinguish and correctly assess each category of Iberian ham within two or three years), so the most honest and professional thing to do was to leave the customer.

Summing up, my collaboration with the Iberian sector ends with the conviction that its union is against nature as there are two totally different types of products with the same name of “Iberian” (something which should never have been allowed). This situation is ruining acorn Iberian ham producers so although it is difficult to separate the sub-sectors of acorn and cebo (and the rest of producers of white pork ham), as many people in the extensive sector have been forced to work with cebo in order not to disappear, in my opinion this is the most recommendable option.

My recommendations for the extensive sector following separation are:

  1. For all products and industrialists with interest in the forest to come together in some kind of association.
  2. Given that what is truly distinctive in the sector is the place of production (the forest) and the feeding (acorn), acorn producers must create a distinctive stamp on their products which says, “product of Iberian forest” or “produced in the Spanish forest”. We must not forget that otherwise nothing will prevent Iberian cebo ham from being produced in China.
  3. To inform the whole of society of the reason for the separation and the value of the new stamp.

 

After this “tale”, revision and analysis, I do not want to conclude without saying that both products, acorn and cebo ham can be excellent and competitive and that they must coexist (alongside the white pork) but in a transparent market in which consumers are given the full information on the origin of each of the products and are allowed to choose between them.

 

[01] [00] The four steps for an advertising campaign to work

Here we will see what must and can be done a priori to be effective. In agr! we have built a simple methodology based on the natural process we all follow when we interact with advertising.

 

First step: ask with rigour.

 

Drawing up the commissions that agencies receive (briefing) correctly and without committing any of the four habitual mistakes is something that must be done by the advertiser.

 

To be able to talk about efficacy, it is first necessary to talk about goals. This is something that is obvious, but which unfortunately not all commissions received by agencies define clearly. The marketing and communication goals have to be specified with figures. If we do not do this, we will make the first mistake.

 

As I will explain later, an advertising campaign cannot be considered successful or valid simply because a post-test shows that it has been liked or many people have seen it.

 

The first thing will be to set targets to be achieved with a certain strategic and tactical approach in which communication will be one of the elements to consider; the agency will therefore only be responsible for the communication targets in this mix. In other words, if the sales fail to work because the distribution, the product quality or price are not right, there is little that advertising can do.

 

Marketing goals generally seek to increase sales or the price, to achieve market participation, to introduce a new product, to penetrate a new market with our product, etc. On the other hand, the communication targets can be to support a brand launch, to report the qualities of a general product, to make a brand better known by consumers or that it should transmit values that encourage consumers to buy it, etc.

 

To say the amounts and percentages that we want to achieve with our marketing plan, we will analyse the sales and prices of the previous years, the market trends, the strengths and weaknesses of the product at the time and the threats and opportunities that the market gives us. We will broadly analyse the competition and the consumer and finally, we will set targets that the agency, on the communication side that corresponds to it, will assume as its own. In this way, the communication will help the remaining elements of the marketing mix to achieve the goals in a pre-set time and with a certain budget.

 

Generally the quantitative and qualitative goals for communication will be based on the degree of brand awareness (notoriety) and the image and positioning we start with before doing the advertising campaign.

 

And here the second mistake can be made. Practically all managers in any sector know the sales of the previous year, the prices that were achieved, the new products that were launched, etc., which makes it easier to be able to quantify the marketing goals for the following year.

 

However, very often in my professional life, I have seen that there are very few managers who, before starting an advertising campaign, know where they are starting in something as basic as the percentage of real and potential customers who know their brand, the values with which it is associated or the opinion that is had of it. Unfortunately, there are few companies and organisations that know the degree of notoriety or the image values at the beginning, and without these we will not be able to know what has been achieved in the past nor will it be possible to set logical communication targets for the future.

 

The third mistake that can be made is to set unrealistic or simply impossible marketing or communication goals, given the characteristics of the competition or our product, due to the insufficient amount of budget allocated, the shortage of time available, etc.

 

In order to start to be effective, advertising requires a minimum  amount of time and money to achieve coverage, precision, repetitions, etc. It will not be enough to have products that have something that makes them better than the competition if we fail to communicate this as often as needed to the right people and with the right supports.

 

Finally, the fourth mistake that can occur in a briefing is to confuse the goals with the strategies. Very often this is just a problem of the writing or the structure of the document; however, as we already know, one of the keys to an effective campaign is the correct choice of the communication strategy, and this is a meticulous job which, if the advertiser is unwilling to do it, must be left to the agency.

 

An agency with a good communication strategy can consider itself to be fortunate. Strategy, along with creativity, is the most important added value that an agency can give an advertiser. In fact today the main advertisers choose their agencies according to strategies and leave the creativity for a second level, sure that the winning agency will find the best creative idea.

 

If the advertiser predefines their strategy, the means and the disciplines, they leave no opportunity for the agency to make other proposals to achieve the goals and fail to get the most out of their agency and their investment in advertising. It is in the awareness of the product and the competition, in their experience in the sector, where the advertiser’s orientations are fundamental for their agency’s communication proposals to be effective. Therefore what I recommend is at least to ADD, and leave the strategies open to improvements by the agency.

 

Assessment: to make sure the briefing has been drawn up correctly and that no mistake has been made, no one better than the advertiser’s agency responsible for working with it. An honest preliminary meeting will suffice.

 

Second case: that the campaign should be seen.

 

After starting work the first thing the agency will do is to ensure that my target audience can see the campaign, and especially that they can see it in the place, at the time and on the right support a minimum number of times; if my target audience, customer or consumer fails to see, read or hear my message, or does so far fewer times than is necessary for it to be recalled, failure is assured. To excessively dilute a campaign to reach more countries or to stay longer is to throw one’s money away. A certain geographical and time concentration is needed for the campaign to achieve its purposes.

 

The disciplines it uses, my message’s support and the time for which it appears determine the agency’s strategy. It may be a press article, a large event, a commercial in a football match or a direct marketing event. This is determined, amongst other things, by the nature of the product or service, its positioning and the mix of communication disciplines (advertising, promotion, direct marketing, and public relations) that will be used to take the planned message to my target audience.

 

If, as is usual in campaigns with large budgets, the strategies contemplate the use of the large mass media (press, radio, exteriors, television), then it will be the planning and media purchasing agency that decides on what medium, when it must be used and with what intensity to effectively reach my target audience.

 

Everything can be quantified beforehand and everything achieved can be seen later. We must and can make sure that our target audience will have the chance to see what has been achieved. In fact we must and can make sure that our target audience will have the chance to see and interact sensorially with our campaign. The agency must be required to make a previous analysis of what is going to be achieved with all of the disciplines in terms of number of appearances, mailings, interviews, coverage, frequency, GRPS, OTS, etc.

 

Assessment: in order to guarantee that the media plan ensures that my target audience will see my campaign sufficiently in the right period, I recommend contracting a good media agency. Only these have the necessary technology to carry out the work correctly. Then there is always the possibility of comparing the proposals of several media agencies.

 

Third step: what catches one’s attention.

 

We therefore ask the following question: is it sufficient for a campaign to be effective that our target audience can see it? It is not. It is necessary, but not sufficient. That they are able to see it does not mean that they “see” it. The responsibility for our campaign does not go unseen and comes down to CREATIVITY.

 

If our commercial, radio or press ad, direct marketing action, etc., fails to catch our attention among the thousands of ads, we will once more have only gone half way.

 

How much money is wasted on advertising if it is not done properly! To see this, think of the advertisements you remember of the approximately 4,000 that you might have seen yesterday if you live in a large city and consume the television, radio and press media in Spain.

 

Everyone knows what has to be done to avoid going unnoticed, but few manage it: good creativity is that which surprises us, excites us or makes you think. Everything but leaving you indifferent. You do not necessarily have to like it to be struck by it, but your mind and heart have to be “caught”. If you do not do this, the message transmitted by creativity will not reach its target.

 

Assessment: Once the agency has finished its advertising materials and before they are published, a pre-test can be made to see how they affect our target audience. After the campaign a post-test can be made to see how it has worked.

 

Many professionals do not believe in the usefulness and objectivity of the pre-tests, some even consider them negative,  they believe that very few of the advertisements considered the best in the history of advertising would have come to light if they had seen them. Two factors take credibility from the pre-tests, one is obvious in the case of pre-testing a television commercial with a model made with storyboards. An opinion is asked for on a material, drawings, very far from what the final result will be, a marvellous commercial. It is like comparing eating a paella with reading its ingredients.

 

In my opinion, pre-tests are essential when the product is going to different countries or when a new product is to be launched.

 

The second factor is the unnatural surroundings in which people submitted to the pre-test distort their reactions and opinions. To go further into this delicate subject, I recommend one of the best books I know on advertising: “Truth, lies and advertising”, by John Steel.

 

Another thing are the post-tests performed after the campaign, which are necessary if we periodically do advertising and we want to know what works, what doesn’t and why.

For advertising: we will have a Research Institute and will measure:

 

–          The spontaneous notoriety, which is the important kind, the suggested is less important.

–          The understanding of the message to see whether what has been understood is what we intended.

–          What is most recalled from the commercial.

–          The level of persuasion with respect to other advertisements, etc. If what we have made is a promotion, what we will measure is:

 

In sales promotion we will assess:

 

–          The percentage of consumers /target that we have addressed with the promotion as compared to the total number, giving absolute figures.

–          The percentage of those who have taken part in the promotion with respect to those contacted, also in absolute terms.

–          The cost of the promotion per participant.

–          The increase in sales during the time of the promotion and the months following as opposed to the same the previous year.

 

If we have made a press office and public relations, we will measure:

–          The number of appearances as a result of our mailings and contacts.

–          The different types of supports.

–          The times of appearance.

–          The quality of the contents.

–          The notoriety of the news.

–          The coverage in the areas of influence.

–          The evolution of the notoriety and the positioning in public opinion.

–          At PR events; the number and profile of the people attending and the number of prescribers involved.

 

In any case, beyond the recall and reactions our campaign causes, if the media plan, the choice of disciplines and creativity are correct, our brand’s notoriety will have grown, more consumers than before will know it and will be able to take it into account.

 

A relatively easy way to achieve notoriety is with a lot of investment in media, but if our budget limits us here, which is the normal thing, we still have the correct choice of disciplines and a large, even risky, creativity.

 

However, another thing is that the attention that we have managed to draw to our campaign translates into purchase intention, so let’s look at the fourth step:

 

 

Fourth step: the message should motivate a purchase.

Is it sufficient for a campaign to be effective that it should have been liked, that it should have been seen and remembered by the majority of a target audience? No, once again. This is the final step, the time of truth, where the notoriety gained with the creativity must be transformed into true persuasion that positively influences the leaning towards our brand.

 

The responsibility for achieving this lies mainly with the strategy, with the decision of “what we are going to say and show” in our brand or product communication and what reaction we are going to cause in the target audience.

 

To get it right we have to think a little about in what competitive environment my product with the chosen attribute is the best option, which will generally mean addressing a certain market segment. This is the essence of the strategy with many ingredients: study, creativity, professionalism, experience and common sense.

 

Sometimes “the content” of the communication which arises from the strategy exceeds the “form” or creativity in its ability to catch people’s attention thanks to how new, original or even obvious the message is.

 

Other times campaigns that are very striking fail to work. There are generally two reasons behind this: because the creativity is so powerful that the message is “eaten”, and even the brand of the advertisement (many people remember large creative advertisements but not the brand nor the reason why this product was to be bought) or because the chosen value or attribute fails to make our product the best option in the considered environment.

 

Assessment: At the end of all strategies comes a choice, or in other words a discard. From the different attributes of our product, one has to be chosen.

 

Is it possible with a pre-test to assess what the value will be that will most motivate the purchase and see whether we beat the competition in this value? If this information is accompanied by experience, common sense and intuition of the strategy, it is possible.

 

In any case, in order to assess whether strategy has worked we must see two things: how the image of our brand has evolved after the campaign, seeing whether it approaches the required positioning and whether the message transmitted in the creativity is really that which has caught the target and whether the message translates into purchase intention. This is seen by the post-tests made by market research companies and how sales have evolved. In the end, if sales have evolved better than in other years, the objectives have been achieved and the only variable of the marketing mix that has changed is the communication and not the product, nor the price, nor the distribution, nor the market environment, nor the competition, we can say that the communication has been responsible for the increase in sales. The media plan, the choice of disciplines, the creativity and the strategy will have worked simultaneously. Everything has to work, which is why it is so difficult to turn advertising expenditure into a good investment; however, when it is achieved, it is the best investment.

 

Finally, we have to measure the medium-long term efficacy achieved by the accumulation of advertising campaigns using the assessment of the “value of the brand”. If the agency with its experience and work has managed to define a long-term brand view and a strategic communication plan to achieve the view with the correct use of the different communication disciplines, the value of the brand achieved with time will be high, and therefore too the return on investment made in commercial communication.

 

This value is defined by the percentage of consumers who prefer my brand at a certain time and how much more they are willing to pay than for the competition