INTERNATIONAL

MARKET
SELECTION.
FINAL PROJECT
TEAM: SOUTH
AMERICA
Harry Mendoza
Oscar Portillo
Carlos Cuevas
Max Urzua
Dilia Rojas

INTERNATIONAL MARKET SELECTION

INDEX
1. PRODUCT AND INDUSTRY DESCRIPTION
1.1 Research Objectives..3
1.2 Industry Description..3
1.3 Attributes and Characteristics of the Product and Service4
1.4 SWOT analysis6
1.5 Tariff Description in Mexico9
1.6 Main Product Exporters in the World...9
1.7 Main Product Importers in the World..11
1.8 Comparative Analysis of Exports and Imports of the Product in
your Region and the World13
2. MAIN ECONOMIC MARKET CONDITIONS IN EACH COUNTRY OF THE
REGION
2.1 Main Product Exporters by Region 16
2.2 Main Product Importers by Region.16
2.4 Main Macroeconomic Indicators GDP, inflation..17
2.5 Select three countries based on product economy variables.17
2.6 Conclusion of three countries .18
3. POLITICAL, LEGAL AND TRADE REGULATIONS: BY REGION
3.1 Tariff and Import Taxes..21
3.2 Tariff preferences.21
3.3 Non-Tariff Barriers...23
3.4 Select three countries based on legal and political variables.24
3.5 Market Selection Conclusions..25
4. CULTURAL CONSIDERATIONS
4.1 General characteristics...25
4.2 Demographic characteristics of selected country...27
4.3 Hofstedes Dimensions comparing Mexico to Target Countries.29
4.4 Negotiation Style...32
4.5 Family Income Distribution.33
5. CONCLUSIONS AND RECOMMENDATIONS
5.1. Country Selection Justification....34
6. BIBLIOGRAPHY......35
2

1. PRODUCT AND INDUSTRY DESCRIPTION

1.1 RESEARCH OBJECTIVES

General Objective:
Analyzing the opportunities to export Broccoli to the best countries of South
America region based on the different economical, political and cultural
information, from technique sources that helps this documents be suitable for any
person or organization that may be interested.
Specific Objectives:
1. Selecting a market in South America by searching the economic and
foreign trade variables for each country analyzed.
2. Getting information about the tariff and non-tariff In the South American
countries, which could be potential markets for the Mexican Broccoli.
3. Showing statistics from reliable sources about the foreign trade activities
with the selected product around the world.
4. Having a wide knowledge about the different markets, which will be
studied.
5. Creating a comparative table that highlight the cultural difference between
the Mexican consumer and South American consumer.
1.2 INDUSTRY DESCRIPTION
Broccoli is placed in the primary sector of the economy, taking into account that
this product doesnt need a transformation to get a final product. Broccoli belongs
to the agricultural sector what makes the operations easier, but at the same time
delicate because it is perishable and it needs special care.
Mexico is the main exporter in the world, followed by Guatemala and Ecuador.
Also Mexico is in the second place in terms of production, taking into account that
United States is the one that tops the list.
Domestically, Guanajuato is the first producers of Broccoli in Mexico, taking into
account that it has 90% of acres of all those that saw. Then, we can find Puebla,
Queretaro, Aguascalientes y Zacatecas.
The total production nationally is the 40.000 acres of Broccoli from which
Guanajuato is responsible for harvesting and distributing 38.000 acres; from
which acre, if possible to get out from 12 to 15 tons. The cost of the box that has
9 kilos ranges from 3 to 8 dollars, leaving an income from 60.000 to 70.000 pesos
by extension of land.
3

From the Guanajuatense production, only 10% of Broccoli stays in the country for
the domestic demand, while the rest is exported to different countries, placing
United States as the main buyer, followed by Canada, Japan and some European
countries.
Estado

Surface (acres)

Sown
Guanajuato
19.890
Puebla
2.619
Queretaro
414
Aguascalientes 581
Zacatecas
231
Source: www.siap.gob.mx.

Production (tons)
Harvested
12.479
952
334
461
231

Obtained
180.625
10.440
5.778
7.473
3.452

In the table above, the states are ordered by surface sown. As we can notice, the
state with the major level of production Is Guanajuato with 19.890 and a total
production obtained of 180.625, then Puebla in the second place with a surface
sown of 2.610 and a total production obtained of 10.440, then Queretaro with a
surface sown of 414 and a production of 5.778, Aguascalientes with a sown of
581 and a production of 7.437, and finally Zacatecas with a surface sown of 231
and a production of 3,452, showing that Guanajuato is the leader not only in the
sown but also in the production of Broccoli.
1.3 ATTRIBUTES AND CHARACTERISTICS OF THE PRODUCT OR SERVICE
Broccoli
The origin of Broccoli takes place in countries with template climates on the
shores of the Mediterranean Sea, in the Middle East. The Anatolian
peninsula, Lebanon or Syria would welcome the first specimens of this plant,
from a wild species, very close to the cabbages and cauliflowers.
During the time of domain of the Roman Empire, this vegetable reached the
Italic Peninsula where it was cultivated for consumption, becoming very
popular in the transalpine country.
But, it would be much later, in the mid twentieth century, when its production
would develop in Europe.
Nowadays, it is grown in Europe, several Asian nations, which include Japan
and in the United States and Mexico.
Characteristics
Broccoli has many edible fleshy green flower heads. It is very similar to its
close relative cauliflowers, but it is green.
It is a cool weather crop, so poorly thrives in hot summers.
4

Usually is prepared boiled or steam, but it may be eaten raw and it has
become in a raw vegetable very popular as an appetizer.
Broccoli is high is vitamin c (100 g, contain 89,2 mg of vitamin C; 107% CDR)
Vitamin E and soluble dietary fiber.
Benefits
Broccoli has caught the attention, more than any other vegetable, in the
scientific world. The consumption of Broccoli acts in preventing diseases,
especially cancer of the colon. In the nutrition field, Broccoli stands in the
prevention of anemia due to its high iron content.
This vegetable gives also phytonutrients and several vitamin and minerals,
including vitamin C and E, calcium, and as mentioned, iron.
Calories
Fat
Saturated Fat
Cholesterol
Carbohydrate
Protein
Dietary Fiber
Sodium
Vitamin A
Vitamin C
Riboflavin
Vitamin B6
Folic Acid
Calcium
Iron
Magnesium
Manganese
Carotenoids

27
<1 g
0g
0 mg
6g
2g
2g
32 mg
1207 IU
49 mg
<1 mg
<1 mg
84 micrograms
31 mg
1 mg
16 mg
<1 mg
1,567 micrograms

The traditional Chinese medicine (TCM), recommends broccoli to treat

inflammation of the eyes and myopia.
Also, the doctors say that its bitter taste, gives diuretic properties and can
cure different types of cancers; such as:

Lung cancer
Stomach Cancer
Mouth cancer
5

Ovary cancer
Breast cancer
Vagina cancer
Colon cancer, and
Prostate cancer
1.4 SWOT ANALYSIS OF INDUSTRY AND PRODUCT

STRENGHTS

Broccoli is a vegetable with high qualities in the nutritional and medical

fields. For this reason, it has an advantage over the rest of vegetables.
Broccoli is high in vitamins C and E, therefore the increasing market of
people who care about themselves in terms of health will be attracted to
this product
Its properties to prevent cancer can make that people who didnt taste it
before, decide to do it, in order to prevent this type of disease in the long
term.
Broccoli can be used to make different types of healthy dishes, and also
can be used as an appetizer, which break the paradigm that it is only for
vegan people.
This vegetable is high in iron and calcium, therefore can be a source of
nutrition for old people who tend to have lack of these important elements.

WEAKNESSES

The perishability of broccoli make the process of export delicate because

of the risk that it can be damaged.
Not every people can eat this vegetable, people who is taking some
prescriptions drugs to regulate blood clotting can not eat it because
broccoli is high in phylloquinone (source of vitamin K), so this might affect
our potential market
People who has renal failure can not eat this vegetable, less raw because
it contain high levels of potassium (370 milligrams for 100 grams of edible
part) and the kidneys might not be able to remove excess of potassium, so
one more time our potential market can be affected
Even though all the good and healing properties that broccoli has, these
can also be counterproductive for customers in case they have some
special treatments.

OPPORTUNITIES

Not every country has the weather and conditions to grow this vegetable
as Mexico, so we have many opportunities in term of trade activities that
other countries definitely cannot.
6

Creating a healthy style life in the Mexican consumers and in the importer
market, which will be able to enjoy and take advantage of all the benefits
of this product.
Entering to other markets, specially the closest ones to take advantages in
terms of transportation, costs, and time, and expand sales.
Mexico has the highest participation in the world market, Mexico exported
to the world in 2013 USD 217,368 in front his competitors in America,
which are Guatemala and Ecuador that had a lower performance in the
same year, this shows the opportunity that Mexico has to expand to other
markets

THREATS

United states is also consider one of the biggest producers of this

vegetables, specially in the California region due to its climate, which looks
alike to the Mediterranean Sea climate, so this can be a big competitors in
terms of production.
This vegetable is also cultivated in Asian and some European countries.
For this reason, the countries in regions can be an obstacle for the vision
of expansion that Mexico might have in markets close where those
countries are
The prices in the market can be really competitive taking into account that
is a product from the primary sector, and this can affect Mexico if it is not
prepared in terms of cost, to face it.
As a summary of the SWOT analysis for the industry and the product we
can see this table below

Strengths:

Excellent power of negotiation

with our suppliers.
Good ability to adapt quickly to
the demands of the local or
regional market.
High investments in plant
modernization.
Increasing integration of product
in the international market.
Research and development of
obtaining better product.
A major player in the domestic
market.
Adequate distribution system.
Excellent quality system.
Low production cost.

Weaknesses:
Low power of negotiation with the
suppliers.
Less information about consumers.
Less capacity of investment in
research and development.
Under positioning in the internal
market.
Limited management capacity.
Inflexible structure to market
demands.
Limited diversification of the
external markets.
Lower productivity.
Poor quality of the raw material.
Seasonal price differentiation.
Low enthusiasm of the workers.
7

Developed internal market.

High quality product.

Opportunities:

Threats:
Weather. - A poor growing season
Increased use of private labels.
due to changes in weather can
Increasing demands for quality of
seriously affect production.
process and products.
Pests. - Pests are a threat to our
Potential growth in consumption
ability to provide healthy broccoli.
of products and regions.
Competition from supermarkets.
Trade agreements with Asia and
Increased bargaining power of large
Europe.
industrial groups.
Increased demand for broccoli
Difficulties in access to credit.
quality.
Competition with large business
Availability of broccoli at
groups.
internationality competitive
Downward trend in international
prices.
commodity prices.
High income elasticity and price.
The decrease of consumption.
High common external tariff.
Import competition.
Income from new foreign
competitors.
High sensitivity to changes in
relative prices.
Competition with the informal
industry.
Crisis in the world economy.

1.5 TARIFF DESCRIPTION IN MEXICO

According to the Sistema de informacin arancelaria via internet (SIAVI,
2011) of the Secretary of Economy, de product fraction tariff: Broccoli, in
Mexico is: 0704.10.02
8

Source: www.siicex.org.mx

1.6 MAIN PRODUCT EXPORTERS IN THE WORLD

The main exporter of Broccoli, with the tariff heading 070410
(internationally) and more specific in Mexico 07041002, in order or value
exported of that product are: Spain, United States of America, China,
Mexico and Netherlands. Where only Spain, United States and Mexico
reach 58.6% and Netherlands 7.5% of Broccoli exported to the world.
It is important to keep in mind that Mexico has an important position in the
market, taking into account that the list covers 24 countries where Mexico
is in the fourth place according to exported value, base on Trade Map,
2013.
Also, it is important to note that according to growth value from 2012 to
2013, the country with the highest percentage is Mexico with 28%, then
Spain with 21%, then China with 18%, United States with 14% and finally
Netherlands with a 5%, which are the leaders in Broccoli exports. This
information at the same time allow us conclude that Mexico might be the
leader for the 2014 because is the one with the highest growth value and it
can help us to open to new markets and explore opportunities for
expansions.
In Exported Unit Value (USD/unit), Spain is in the top of the list with an
indicator of 1.365 dollar per ton, followed by United Sates 1.149 dollars
per ton, then among the main exporters the ones with the lower indicator
are Netherlands with 897 dollar per ton, then Mexico with 738 dollar per
ton, and finally China with 528 dollar per ton.
9

Analyzing the trade statistics for the Broccoli, we can conclude that Spain
is the main competitor of Mexico, because is the one that controls the
exports of the product. However, the advantage is that Mexico is one of
the leaders in the Continental American market.

EXPORTER PARTICIPATION (%)

25

20

19.5
16.6

15

13.3
Sales

10

8.5

7.1

0
Spain United States China

Mex ico Netherlands

Source: own elaboration with data from TradeMap (ITC, 2013).

MAIN EXPORTER COUNTRIES IN 2013

10

600,000

500,000

499,555
424,440

400,000
339,833
300,000

Exported Value
217,368
182,158

200,000

172,793

166,706

100,000

Spain United States China

Mexico Netherlands France

Italy

Source: own elaboration with data from TradeMap (ITC, 2013).

1.7 MAIN PRODUCT IMPORTERS IN THE WORLD

The five most important importer of Broccoli in the world in 2013, in terms
of imported value are Canada, United Kingdom, United States of America,
Germany and Russian Federation. Where only Canada and United
Kingdom reach the 23.6%, United States and Germany reach 20.3% and
the Russian Federation 4.8% of broccoli imported in the world.
Based on the results of the main importers, United States and Canada
would be always the first list option of Mexico to export its Broccoli, not
only because they are close but also because they are already on free
trades that Mexico can take advantage of and get a positioning of its
product in these two markets.
Now according to the growth value from 2012 and 2013, the country with
the highest percentage is Canada with 34%, as well as United States with
the same percentage of 34%, then United Kingdom with 23%, Germany
with 21% and finally, Russian Federation with 17%; which means, one
more time that Mexico should be focused on United States and Canada
markets, in order to increase its sales of Broccoli.
In exported Unit Value (USD/unit), Canada is in the top of the list with
1,288 dollar per ton, followed by Germany with 1,182 dollar per ton, then
United Kingdom with 1,150 dollar per ton, United States of America with
807, and the Russian Federation with 600
11

In conclusion, based on the statistics Canada should be the main country

that Mexico should focus on, in order to have success in its trade activities
related to Broccoli.

IMPORTER PARTICIPATION (%)

14
12

12.7
10.9

10

10.7
9.6

Participation

8
6
4.8

4
2
0

Source: own elaboration with data from TradeMap (ITC, 2013).

MAIN IMPORTER COUNTRIES IN 2013

350,000
300,000 331,327
250,000
200,000

284,262 279,911

251,449

150,000
100,000

125,309

Imported Value USD

50,000
0

Source: own elaboration with data from TradeMap (ITC, 2013)

12

1.8 COMPARATIVE ANALYSIS OF EXPORTS AND IMPORTS OF YOUR

PRODUCT IN YOUR REGION AND THE WORLD

Spain

DETAILS ON MAIN EXPORTER IN THE WORLD 2013

United
China
Mexico
Netherlan
France
States
d

Exported
499,555
424,440
339,833
217,368
182,158
value US
Dollars
Export
19.5%
16.6%
13.3%
8.5%
7.1%
participatio
n (%)
Growth in
21%
14%
18%
28%
5%
value 20122013
Unit Value
1,365
1,149
528
738
897
US
Dollars/Ton
Source: own elaboration with data from TradeMap (ITC,2013).

172,793
6.8%
18%
1,020

DETAILS ON MAIN EXPORTERS BY REGION 2013

Ecuador
25,364

Peru
121

Colombia
88

Argentina
40

Chile
9

Exported
Value US
Dollars
Export
1%
0%
0%
0%
0%
participation
(%)
Growth in
-11%
N/A
-65%
-35%
29
value 20122013
Unit Value
1,573
1,000
688
234
2,250
US
Dollars/Ton
Source: own elaboration with data from TradeMap (ITC,2013).

Brazil
0
0%
0%
0

13

DETAILS ON MAIN IMPORTERS IN THE WORLD 2013

Canada

United
Kingdom
284,262

United
States
279,911

Germany

Russian
Federation
125,309

Imported
331,327
251,449
Value US
Dollars
Import
12.7%
10.9%
10.7%
9.6%
4.8%
Participation
(%)
Growth in
34%
23%
34%
21%
17%
value 20122013
Unit Value
1,288
1,150
807
1,182
600
US
Dollars/Ton
Source: Own elaboration with data from TradeMap (ITC, 2013).

Netherlands
111,999
4.3%
15%
1,128

DETAILS ON MAIN IMPORTERS BY REGION IN 2013

Chile

Peru

Colombi
a
1

Argentin
a
0

Ecuado
r
0

Imported
42
23
Value Us
Dollars
Import
0%
0%
0%
0%
0%
Participation
(%)
Growth in
N/A
-100
Value 20122013
Unit Value Us
1,077
1,643
Dollars/Ton
Source: own elaboration with data from TradeMap (ITC, 2013)

Brazil
0
0%
-

14

Analysis
Based on the tables above, the main exporters in the world are Spain, United
States, China, Mexico, Netherlands and France. Mexico, which is the most
important for us, in this case has a big opportunity in the world Market, not only
because it can supply the Americas Market but also because it can supply one of
the main exporters as well; which could be considered as a competitor for the
Mexican Market, this is United States of America, which count on a larger
participation in exports than Mexico, with a USD 424,440 as exported value in
2013 compared to Mexico with only USD 217,368. United States, as the main
exporters in the world table, shows us is among the main exporters. However, this
is also one of the importers in the world market. The reason why United States is
a good exporter is because its weather in California, where the broccoli grows, is
similar to the Mediterranean coast weather, where the Broccoli started.
Now, why is United States also one of the largest importers? The reason is that
United States is the largest importer in the world, and his domestic production is
not enough to cover the domestic demand (317 million people, 2014), so for this
country it is necessary to import Broccoli even though it also produces it.
Therefore, this can be a huge opportunity for Mexico, to export to the United
States, even when this country also produces Broccoli.
In terms of the region we are studying, which is South America, we can notice
that the largest exporter is Ecuador with a 25, 364 US Dollar exported to the
world and only 1% of participation in the world exports. However, Peru, Colombia,
Argentina y Chile have exported a few. Brazil, we included it in the table because
is one of the best economies in South America, but, in the Broccoli Market, Brazil
doesnt have any participation either in the exports or imports.
Therefore, the opportunities for Mexico increase when the exports of South
American region are low and their imports too. Mexico can take advantage of this
situation and supply these markets. However, for Mexico would be important to
focus on expand its sales by getting in other markets such as Canada that is
close to Mexico, as well as United states, as it was explained above. Netherlands
might be a good opportunity, however, Russian Federation might not be because
China is also one of the largest exporters in the world with a close business
relationship with Russia.

15

2. MAIN ECONOMIC MARKET CONDITIONS IN EACH COUNTRY OF THE

REGION
2.1 MAIN PRODUCT EXPORTERS BY REGION

DETAILS ON MAIN EXPORTERS OF BROCCOLI BY REGION

2013
Ecuador
25,364

Peru
121

Colombia
88

Argentina
40

Exported
Value US
Dollars
Export
1%
0%
0%
0%
participation
(%)
Growth in
-11%
N/A
-65%
-35%
value 20122013
Unit Value
1,573
1,000
688
234
US
Dollars/Ton
Source: own elaboration with data from TradeMap (ITC, 2013)

Chile
9

Brazil
0

0%

0%

29

0%

2,250

2.2 MAIN PRODUCT IMPORTERS BY REGION

DETAILS ON MAIN IMPORTERS OF BROCCOLI BY REGION IN

2013

Imported Value
Us Dollars
Import
Participation
(%)

Chile
42

Peru
23

0%

0%

Colombia
1

Argentina
0

Ecuador
0

0%

0%

0%

Brazil
0
0%

16

Growth in
N/A
Value 20122013
Unit Value Us
1,077
1,643
Dollars/Ton
Source: own elaboration with data from TradeMap (ITC, 2013)

-100

2.416 MAIN MACROECONOMIC INDICATORS

GDP per capita

(USD)
Unemployment
rate
Family Income
Current Account

Chile
$333.4
billion
6%

Colombia
$526.5
billion
9.7%

Ecuador
$157.6
billion
4.2%

Argentina
$771
billion
7.5%

Peru
$334
billion
3.6%

Brazil
$2,416
trillion
5.7%

52.1
(2009)
$10.97
billion
78.7

55.9
(2010)
$11.02
billion
70.7

48.5
(2013)
$827.1
million
48.0

45.8
(2009)
$2,371
billion
44.6

48.1
(2010)
$10.31
billion
67.4

51.9
(2012)
$77.63
billion
56.9

2.9%

6.2%

Economic
Freedom
Inflation
1.7%
2.2%
2.6%
20.8%
Source: own elaboration with data from heritage.org and CIA.gov.

2.5 SELECT THREE COUNTRIES BASED ON PRODUCT ECONOMIC

VARIABLES

Imported Value
(USD Dollars)
Quantity
Imported (tons)
Unit Value
(USD/Unit)
Annual Growth
over the past five
years
Trade Balance
GDP/PPP
Unemployment
rate
Inflation rate
Family Income

Chile

Peru

Colombia

42

23

39

14

1,077

1,643

-33
$333.4 billion
6%

98
$334 billion
3.6%

87
$526.5 billion
9.7%

1.7%
52.1 (2009)

2.9%
55.9 (2010)

2.2%
48.1 (2010)
17

Economic
78.8
67.4
Freedom
Source: own elaboration with data from TradeMap (ITC,2013)

70.7

Base on the data in table above

Country A
Chile
Weight Grade Scor
e
25%
10
2,5

Country B
Peru
Weight Grade Scor
e
25%
5
1.25

Country C
Colombia
Weight Grade Score

Imported
25%
Value
(USD
Dollars)
Quantity
10%
10
1
10%
5
0,5
10%
Imported
(tons)
Unit Value
1,2
1
2
(USD/Unit
25%
5
25%
0
.5
25%
5
)
Annual
Growth
5%
0
0
5%
0
0
5%
over the
past five
years
Trade
10%
5
0,5
10%
10
1
10%
Balance
GDP/PPP
7%
5
0,35
7%
6
0,42
7%
Unemploy
6%
5
0,3
6%
10
0,6
6%
ment rate
Inflation
7%
10
0,7
7%
4
0,28
7%
rate
Economic
5%
10
0,5
5%
5
0,25
5%
Freedom
Total
100%
60
7,1
100%
55
6,8
100%
Source: own elaboration with data from TradeMap (ITC, 2013)

0,25

0,8

10
1

0,7
0,06

0,35

0,4

33

2,56

2.6 CONCLUSION OF THREE COUNTRIES (EXPLANATION OF THE

SELECTION)

18

The three best countries to export Broccoli from Mexico, based on

TradeMap.com, definitely are Chile, Peru and Colombia, taking into account that
the other three countries dont have any participation in the product import.
However, to select which of the three countries is the best as a market for
Mexican broccoli, it was not necessary to do the last table using weight, grade
and score, due to the obvious data of imports, exports (by region), and the table
with the economic and macroeconomic variables, where Chile performances the
best roll.
On the other hand, we have found that Chile, Peru and Colombia (selected
countries in the region) dont have either a high participation either in imports or
exports, even thought, they were the highest among the six countries. Therefore
we have conclude taking into account that Colombia, Peru, and Chile export
Broccoli and have a low rate of import of the same product, that the reason why
they dont import a lot Broccoli from Mexico or other producer countries is
because, from the amount the selected countries produces they take to cover the
domestic demand, being not necessary to depend on other countries in a high
rate.
Finally, from the three countries selected, even thought, as a said before, isnt
necessary to make the grading table because the explicit data in trade map, to
show the process and accomplish with the objective of the course and the final
project we still made it and as we predicted, Chile with a score of 7,1 is the best
country for Mexico to take into account as a target market, followed by Peru with
the 6,8. However the average of purchase that Mexico will get from these two
countries (Chile and Peru) is really low compared with the average of purchase
that Mexico might get from Central America and the Caribbean, which, as
TradeMap shows, are the best countries to export Broccoli because they
consume a lot of this product. Therefore, if we were the Mexican producers of
broccoli, we would rather prefer to study other markets where the purchases of
Broccoli were higher.

2. MAIN ECONOMIC MARKET CONDITIONS IN EACH

COUNTRY OF YOUR REGION
2.3. Industry and consumer and product consumption analysis and
tendencies by region
CHILE
Industry: Grew 45 % vegetable market in Chile. This, after total sales to rise from
$ 67.2 million in 2008 to US $ 97.4 million in 2013, as indicated by recent results
from Euromonitor International. This strong momentum took place because a
tendency to increased consumption of fast food, but in line with the preference for
healthy eating. Thus, Chile exceeds the Mexican market with a US $ 23.3 million
difference; while away from the regional leader, Brazil, at about $ 32.6 million.
Minute Green and Frutos del Maipo are the two leading brands in this segment.
19

Moreover, canned vegetables have a market size in Chile currently totals US $ 47

million, a figure that is almost 30 times less than the size of the main Latin
American market in these products.
Consumer: 65 % of Chileans consume between 1-3 servings of vegetables daily
and 16 % eat 3 or more servings per day, according to the 2010 report of
AlimntateSano.cl. The remaining 19 % do not eat vegetables every day.
Tendencies: according to the editor of the magazine Indualimentos, Antonio
Lara, trends in food consumption are global, and Chile is no exception. The
preference for healthy products, new life habits and preference for the exotic, are
examples of new consumer trends.
Concern about health and healthy eating habits are another trend that directly
affect the sector. Therefore, companies have to take into account these aspects
and adapt to new needs: low sugar, no trans fats, etc.
COLOMBIA
Industry: The Colombian vegetable industry is a small industry but relatively
dynamic in 2000. However right now, the vegetable industry has presented a
continuous development, which has included an increase in exports in general,
but for keeping the industry growing is necessary to meet some basic conditions:
increase urbanization process, the increase of percapita income, changes in the
habits, insertion in broader markets and the diffusion processing technologies.
Consumer: Colombia has a low consumption of vegetables, 30-40 / Kg / person /
year, representing a sixth of the Italian consumer or a quarter of the American
consumer, but a little larger than the Peruvian consumption only reaches 1 kg /
person / year.
Tendencies: the tendencies in Colombian consumer are:
Healthy consumption, this factor is the intention of the consumer to direct their
purchases to brands that care about their environment and to mitigate any
negative impact of their goods and services on the environment.
Health as an obsessive theme, healthy food, promoting physical activity through
relaxation centers, spa, spas and fitness is a priority issue for the consumer.
Is expected to grow the demand for healthy food, dietary and organic, as well as
the entire portfolio of functional foods industry develops. In the malls, the gym is
becoming crucial in the supply of open to the public, according to the study.
Attractive multicultural style, now characterized by the presence of common
brands in the country, making lifestyles in Latin America and Colombia are
globalized.
PERU
Industry: from 2000 the Peruvian exports of vegetables have increased from 101
to 1.120 million dollars to 2011, increasing 27% annually doubling the number of
target market in the same period
This industry has developed thank to the optimal weather and floor conditions
that allow a production throughout the year and the continuous improvement of
productive processes of Peruvian companies.

20

This would have created the conditions for a deal that included artichokes,
peppers, bell peppers, onions, garlic, holantao, broccoli, green beans, with the
capacity to produce and export the season against Northern Hemisphere.
Consumer: Peruvians have a high deficit in consumption of fruits and vegetables
in your daily diet, foods that contain antioxidants, help prevent cancer, Diana
Ponce, nutritionist " Dos de Mayo " National hospital reported.
He said that currently the Peruvian consumer on average only one-fifth of what it
should consume vegetables daily, and most of the time do not eat any fruit.
The specialist said that people should consume at least two servings of
vegetables, three fruits and drinks at least six to eight glasses of water daily.
Tendencies: within Peruvian consumer trends we can find:
Styles of increasingly complex life: Around the world, consumers are seeing
more complexity in their daily lives, both in their own lives, and in the structure of
the society in which they live.
Search for more pleasure: Consumers are trying to escape from the pressures
of an increasingly complex life and hectic day permitted to have small "luxuries "
or to access small "pleasures. This is not only due to their financial situation
allows them now but also there is a global tendency to live life to the fullest.
Being increasingly connected: The technological evolution of media and
communications has created a new interactive space where people have access
to stay connected and interact with each other all the time. Social networking has
changed the nature of relationships and the ability to have an unlimited number of
networks, which means that consumers are strengthened and are able to create
new rules, where they have the power to say whether they like it or not what
made a brand and make it public.
3.1 Tariff and import Taxes
3.2. Tariff Preferences
The information about duties and import taxes of the product Broccoli to the
possible markets in South America is shown below, the information presented
was obtained from ITC Market (2002), from its database of Trade Wizard. Based
on them it is shown the follow results:
CHILE:

21

Based on the treaty with Chile, which started in 1992, the products imported to
Chile will pay a duty of 6% of CIF value and a tax of 19% of CIF value plus duty.

COLOMBIA:

Also, based on the treaty, which was named before as G3 because if was
conformed by Colombia, Venezuela and Mexico. However, because Venezuela
decided to get out of the treaty, now it is known as the G2.This Treaty was signed
in January 1st of 1995. For this FTA the import of products to Colombia must pay
a custom duty of 15% of the CIF value and a value added tax of 0%
PERU:

22

Based on the FTA between Mexico and Peru, which was signed in Lima, Peru in
April 6th of 2011, the imported product from Mexico to Peru must pay a 9.6% of
CIF value and 0% in taxes.
Import Country

Chile

Colombia

Peru

HS number

07041000

0704100000

0704100000

Embargos

NO

NO

NO

Prohibitions

May Apply

NO

NO

Licenses, Permits, YES

etc.

May Apply

NO

ADD/ CVD

NO

NO

NO

Absolute Quota

NO

NO

NO

Tariff Rate Quota

NO

NO

NO

Other controls

YES

NO

NO

3.3 Non-Tariff barriers

23

CHILE
Global Notes
Goods shipped in solid or manufactured wood packing materials are subject to inspection at the
port of entry by the Service of Agriculture and Cattle (SAG). The Phytosanitary certificate issued
from the origin country must declare that the wood packing is "free of bark, insects, and signs of
damage produced by insects" as per NIMF No. 15 (ISPM 15) standards. The wood packaging
should bear legible, permanent and nontransferable mark of approved Phytosanitary treatment on
two extreme visible faces of each unit of packing.
COLOMBIA
Global Notes
The manufacturers of wooden packing material indicating the necessary conditions must mark
wooden packing material used while exporting goods appropriately and procedures (heat
treatment and methyl Bromide application) are followed as stipulated with plant health assurance.
These are in accordance with the purposes of provisions and norms regulating "Wooden packing
material in international trade ISPM No.15" in conformity with Agricultural Combat and Agricultural
Quarantine Law published by Foodstuff and Agriculture Organization of United Nations.

PERU
Global Notes
Wooden packing material used while exporting goods must be marked appropriately by the
manufacturers of wooden packing material indicating the necessary conditions and procedures
(heat treatment at methyl Bromide application) are followed as stipulated with plant health
assurance. These are in accordance with the purposes of provisions and norms regulating
"Wooden packing material in international trade ISPM No.15" in conformity with Agricultural Combat
and Agricultural Quarantine Law published by Foodstuff and Agriculture Organization of United
Nations.

3.4. Select three countries based on legal and political variables

In this section, the market selection in the region of South America, takes place, in order to find an
achievable market to export the product: Broccoli, according to political and legal variables, based
on Economy Ranking, from Portal Web of Doing Business, 2011.

Country A
Chile

Country B
Peru

Country C
Colombia
24

Weight
25%
20%

Tariffs
Non-Tariff
Restrictions
Ease of
Doing
11%
Business
Ranking
Country
Risk
3%
Political
Risk
Trade Mark
Registration
Tax
Payments
Trans
border Rate
Enforcemen
t
of
Contracts
Total

Grade
10
10

Score Weight
2,5
18%
2,0
23%

Grade
8
10

Score Weight
2.25
22%
2,3
20%

2,2

Grade
10
8

Score
2,2
2.5

14%

.28

10%

0.5

5%

5%

8%

10%

14%

0,7

12%

0,4

14%

0,2

5%

0,5

5%

6%

0,3

4%

0,24

7%

1,75

5%

0,5

10%

0,7

8%

1.6

8%

0,16

100%

41

8,84

100%

34

8,58

100%

35

6,36

8%

3.5. Market Selection Conclusions.

In this analysis of selection resulted from the three countries evaluated (Chile, Colombia and Peru) that
Chile is the country best ranked economically, follow by Colombia. This keeps showing the tendency of
both markets as the most favorable countries to be selected as a target market of the product. This
shows that both but more Chile count on a healthy environment for the commercial activity and
negotiations

4. CULTURAL CONSIDERATIONS
4.1. General Characteristics

25

Geographic Location: Chile is on the Pacific coast of South America. This long
and narrow country, bordered on the north by Peru on the east by Bolivia and
Argentina, to the west by the Pacific Ocean and south to the South Pole.
Total Area: 756.096,3 km.
Major Cities: Santiago, Puente Alto, Antofagasta, Via del Mar, Valparaiso,
Talcahuano, San Bernardo, and Temuco.
System of Government: The current Constitution of Chile, in the year 1980,
divided the state into three branches: executive (headed by the President of the
Republic, elected by popular vote every four years), Legislative and Judicial.
Administrative Division: The Chilean government is divided into 15 regions. In
addition, consists of 54 provinces headed by a governor, appointed by the
President of the Republic, and 346 communes, headed by a mayor, elected by
ballot every four years.
26

Schedules: Shops: In the capital, the big stores are open Monday to Friday from
10 to 22 hours. In regions shops usually close between 14 and 16 h. Banks and
government offices are open Monday through Friday mornings
National Symbols: Flag: The current flag of Chile was established in 1817. It
consists of two horizontal stripes, less red and a white top, on whose left stands a
blue square with white inside pentagram. The Chilean blue symbolizes the clear
sky, white snow of the Andes, and red the blood shed in the revolution.
Holidays:
January 1: New Year
March or April: Easter
May 1: Labor Day
May 21: Navy Glories
June 2: Corpus Christi
June 29: Saint Peter and Saint Paul
August 15: Assumption of the Virgin
September 18: Independence Day
September 19: Glories of the Army
October 12: Columbus Day
November 1: All Saints
December 8: Immaculate Conception
December 25: Christmas
Currency: The peso is the currency of Chile. Your code is CLP, ISO 4217 number
is 152, and its symbol is $4. Weight was established in 1817 with the country's
independence and remained as such until December 31, 1959, when it was
replaced by the escudo. Through Decree Law 1123, published on August 4, 1975,
the weight was picked as the monetary unit from September 29 of that same year
with a rate of one peso per thousand crowns

4.2. Demographic characteristics of selected country. (Population: Age and

gender; Religion distribution; Ethnic groups; Language.
Population
The last official census took place in Chile back in 2002, which placed the
population at 15.1 million. The official 2012 estimate placed Chile's population at
17.4 million. Chile's population is estimated to have grown in 2013 to 17,643,916,
and in 2014 to 17,808,847, which makes it the 59th most populous country on
earth.
Chile Population 2014
Chile's population has grown steadily over the past 60 years, rising from only 6
million in 1950 to almost triple that number more than 17.8 million people now call
27

Chile home. From 1960 to 2012, Chile's population grew 127%, and now
represents 0.25% of the world's population. That means 1 in 404 people on earth
is a Chilean resident.
Chile is now the 59th most populous country, and the 6th most populous country
in South America (after Brazil, Colombia, Argentina, Peru and Venezuela).
Age
Age structure: 0-14 years: 20.7% (male 1,834,247/female 1,760,315)
15-24 years: 16.3% (male 1,442,610/female 1,383,738)
25-54 years: 43.2% (male 3,733,261/female 3,766,912)
55-64 years: 9.9% (male 806,044/female 910,818)
65 years and over: 9.9% (male 720,681/female 1,005,268) (2014 est.)
Definition: This entry provides the distribution of the population according to age.
Information is included by sex and age group (0-14 years, 15-64 years, 65 years
and over). The age structure of a population affects a nation's key socioeconomic
issues. Countries with young populations (high percentage under age 15) need to
invest more in schools, while countries with older populations (high percentage
ages 65 and over) need to invest more in the health sector. The age structure can
also be used to help predict potential political issues. For example, the rapid
growth of a young adult population unable to find employment can lead to unrest.

28

Religion Distribution: Roman Catholic 66.7%, Evangelical or Protestant 16.4%,

Jehovah's Witnesses 1%, other 3.4%, none 11.5%, unspecified 1.1% (2012 est.)

29

Ethnic Groups: white and non-indigenous 88.9%, Mapuche 9.1%, Aymara 0.7%,
other indigenous groups 1% (includes Rapa Nui, Likan Antai, Quechua, Colla,
Diaguita, Kawesqar, Yagan or Yamana), unspecified 0.3% (2012 est.)

Language: Spanish 99.5% (official), English 10.2%, indigenous 1% (includes

Mapudungun, Aymara, Quechua, Rapa Nui), other 2.3%, unspecified 0.2%
30

4.3. Hofstedes Dimensions Comparing Mexico to Target Countries.

Dimensions
Power Distance

Individualism
Collectivism

Mexico
At a score of 81, Mexico is
a hierarchical society. This
means that people accept a
hierarchical order in which
everybody has a place and
which needs no further
justification. Hierarchy in an
organization is seen as
reflecting
inherent
inequalities, centralization is
popular,
subordinates
expect to be told what to do
and the ideal boss is a
benevolent autocrat

Chile
Though Chile scores lower on
PDI than most other Latin
American countries, at 63 it still
occupies an intermediate to
high position on this dimension.
Remnants
of
Chiles
authoritarian past linger on in
diverse fields. Organizational
arrangements
show
taller
pyramids and low degrees of
delegation. Status symbols are
used to underline power
differences.
A
hierarchical
social structure and rather rigid
social classes are present;
common cafeterias are rare,
privileges for the power holders
common.
Vs. Mexico, with a score of 30 At 23 Chile scores low on this
is considered a collectivistic dimension, in line with most
society. This is manifest in a other
Latin
American
31

Masculinity Vs. Femininity

close
long-term
commitment to the member
'group', be that a family,
extended
family,
or
extended
relationships.
Loyalty in a collectivist
culture is paramount, and
over-rides
most
other
societal
rules
and
regulations. The society
fosters strong relationships
where
everyone
takes
responsibility for fellow
members of their group. In
collectivist societies offence
leads to shame and loss of
face,
employer/employee
relationships are perceived
in moral terms (like a family
link), hiring and promotion
decisions take account of
the employees in-group,
management
is
the
management of groups.
Mexico scores 69 on this
dimension and is thus a
masculine
society.
In
masculine countries people
live in order to work,
managers are expected to
be decisive and assertive,
the emphasis is on equity,
competition
and
performance and conflicts
are resolved by fighting
them out.

countries. In our experience

and a review of recent articles
on the subject, it is possible
to infer that a large proportion
of the workforce shifted their
perceptions. Blue and whitecollar workers alike tend to
look for more autonomy and
variety in their positions, are
far more assertive th1234an
in the past and do not
hesitate
to
change
employers. These
changes
can be expected given the
remarkable increase of Chile
s GDP and the fact that
economic
development
fosters
individualism.
However, some paternalistic
practices still remain in place,
particularly outside Santiago.

Though difficult to detect,

evidence reveals the feminine
character of Chilean society
with its score of 28 in this
dimension. Far from being
arrogant, both Chilean men
and women show a modest
behavior or attitude. In feminine
countries the focus is on
working
in
order
to
live. People need to feel a
sense of belonging within a
social group; they place value
on warm interpersonal links
and tacitly search for the
approval
of
their
group.
Consequently, they tend to be
supportive team members and
managers strive for consensus,
people value equality, solidarity
and quality in their working
lives. Conflicts are resolved by
compromise and negotiation.
Incentives such as free time
32

Uncertainty Avoidance

Mexico scores 82 on this

dimension and thus has a
very high preference for
avoiding
uncertainty.
Countries exhibiting high
uncertainty
avoidance
maintain rigid codes of
belief and behavior and are
intolerant of unorthodox
behavior and ideas. In
these cultures there is an
emotional need for rules
(even if the rules never
seem to work) time is
money, people have an
inner urge to be busy and
work hard, precision and
punctuality are the norm,
innovation may be resisted,
security is an important
element
in
individual
motivation.
Long Term Orientation Vs. The relatively low score of
Short
term
Normative 24 means that the Mexican
Orientation
culture is normative. People
in such societies have a
strong
concern
with
establishing the absolute
Truth; they are normative in
their thinking. They exhibit
great respect for traditions,
a relatively small propensity
to save for the future, and a
focus on achieving quick
results.
Indulgence Vs. Restraint
With a very high score of
97, Mexican culture has a
definite tendency toward
indulgence.
People
in
societies classified by a
high score in indulgence
generally
exhibit
a
willingness to realize their
impulses and desires with

and flexibility are favored.

Focus is on well being and
status is not shown or
emphasized.
At 86 Chile scores high on UAI
and so do the majority of
Latin American countries that
belonged to the Spanish
kingdom. These societies show
a strong need for rules and
elaborate legal systems in
order to structure life. Contrary
to general practice in other
Latin American countries, Chile
shows rather low corruption
indices. In line with its high UAI
score and to some extent also
fostered by its authoritarian
past,
youll
find
great
dependence on experts, the
authorities, particularly among
non-managerial employees.

With a low score of 31, Chile is

said to have a normative
culture.
People
in
such
societies
have
a
strong
concern with establishing the
absolute Truth; they are
normative in their thinking.
They exhibit great respect for
traditions, a relatively small
propensity to save for the
future, and a focus on
achieving quick results.
A high score of 68 in this
dimension means that Chile
has a relatively indulgent
orientation. People in societies
classified by a high score in
indulgence generally exhibit a
willingness to realize their
impulses and desires with
regard to enjoying life and
33

regard to enjoying life and

having fun. They possess a
positive attitude and have a
tendency towards optimism.
In addition, they place a
higher
degree
of
importance on leisure time,
act as they please and
spend money as they wish.

having fun. They possess a

positive attitude and have a
tendency towards optimism. In
addition, they place a higher
degree of importance on
leisure time, act as they please
and spend money as they wish.

4.4. Negotiation Style

Communication and Negotiation Styles
The formality apparent when dealing with Chileans extends into the boardroom.
Wait to be told where to sit; there may be a seating plan. You can expect senior
and mid-level executives to attend initial meetings. Mid-level executives will
attend follow-up meetings. Chileans are extremely conservative; they value
honesty and truth and do not appreciate hard sell techniques. Relationships are
important and time is spent developing these. Intercultural adaptability and
patience are essential, as Chileans do not like to be rushed.

Main Characteristics:
The business atmosphere in Chile is more formal than in the rest of South
America.
Punctuality is generally respected and expected in business. However, be
prepared for Chileans to be thirty minutes late.
Chileans dont like to feel pressured or rushed. Business may be
conducted more slowly than in Europe and North America.
Expertise is less important than your personal, family and company
background. Family and friendship play a big role in business, and whom
one knows is important. Red tape can be minimized considerably if you
have the right connections.
Establish rapport first. Personal relationships are vital to doing business in
Chile. Some light conversation is customary before getting down to
business.
Decision-making is centralized and decisions are made at the top level,
although all levels have input. Visit top-level executives first. Mid-level
executives can follow up on subsequent visits.
Be prepared to always go through a secretary. Secretaries are screeners
for their bosses.

34

It is preferable to conduct business face-to-face rather than over the phone

or via fax. Be prepared to take several trips to finish a business
transaction.
It is acceptable, but not yet common, to communicate via e-mail; dont
expect a quick response.
Businesslike behavior with a bit of humor is appreciated. Do not attempt a
hard sell approach, and avoid aggressive behavior.
Expect to be interrupted. This is not considered rude, but rather a way of
showing interest and enthusiasm.
Present a well-organized plan with terms clearly defined and financial
obligations and options clearly stated.
Chileans are straightforward about negotiations. Feelings and emotion are
important in negotiation.
Always get written confirmation of agreements.
Stay at a top-notch hotel; you will be judged by your accommodations.
4.5. Family income Distribution
52.1 (2009)
Country comparison to the world: 14
57.1 (2000)
In Chile, the average household net-adjusted disposable income per capita is 13
762 USD a year, much less than the OECD average of 23 938 USD a year. But
there is a considerable gap between the richest and poorest the top 20% of the
population earn 13 times as much as the bottom 20%.
5.CONCLUSIONS AND RECOMMENDATIONS
5.1. Country Selection Justification
After analyzing all the variables of the selected countries, we have decided to
choose Chile because it is one of the most developed countries of
Latinamerica and also due to the different types of political and legal variables.
Its important to understand the different variables that have positive effects
within the country and the different advantages that can be a positive issue for
the Mexican broccoli. Therefore, based on all the results got as outcomes
from these study and also project, Chile is the best option among South
Americas countries for Mexican companies to export Broccoli.
As recommendation, we suggest that Mexican companies interested in
exporting to this Country, should be really concerned about the fact that Chile
is an individualistic country. Therefore, they should adapt to the business
model of this country in order to reduce the probability of failure in a
negotiation.

35

6. BIBLIOGRAPHY
Sources from 1st advance
http://www.freshplaza.es/article/81292/Mxico-Guanajuato,-principalproductor-de-brcoli
http://www.regmurcia.com/servlet/s.Sl?sit=c,543,m,2714&r=ReP-20160DETALLE_REPORTAJESPADRE
http://www.colombia.com/vida-sana/nutricion/sdi/13300/los-beneficios-deconsumir-brocoli
http://www.pulevasalud.com/ps/contenido.jsp?
ID=58973&TIPO_CONTENIDO=Articulo&ID_CATEGORIA=86
Sources for 2nd advance
36

http://www.eurocarne.com/pdf/informes/sector-alimentario-chile.pdf
http://web.sofofa.cl/noticia/mercado-chileno-de-verduras-congeladas-es-elsegundo-mas-grande-de-latinoamerica/
http://es.slideshare.net/GloriaGarciaGalindo/agroindustria-en-colombia
http://www.rpp.com.pe/2013-10-24-peruanos-presentan-deficit-de-consumo-defrutas-y-verduras-noticia_642176.html
Tratado de Libre Comercio (TLC) Mxico - Colombia. (n.d.). Retrieved October
30, 2014, from http://www.reingex.com/Mexico-Colombia-TLC.shtml
Tratado Libre Comercio Chile-Mexico. (n.d.). Retrieved October 30, 2014., from
http://www.sice.oas.org/
http://www.economia.gob.mx/files/comunidad_negocios/tlcs/tlc_peru/AIC_MEXIC
O_PERU_DOF.pdf
Sources for 3th advance
http://internacional.universia.net/latinoamerica/datospaises/chile/aspectos-generales.htm
http://worldpopulationreview.com/countries/chile-population/
http://www.indexmundi.com/chile/age_structure.html
https://www.cia.gov/library/publications/the-worldfactbook/geos/ci.html
http://geert-hofstede.com/mexico.html
http://geert-hofstede.com/chile.html
http://www.kwintessential.co.uk/intercultural/management/chil
e.html
http://www.oecdbetterlifeindex.org/countries/chile/

37

38