El Rey Maguey

A01332488 Rodrigo Medel Hernndez

A01332737 Aldo Alejandro Gonzlez Ramrez
A01332459 Martn Mauro Cervantes Toiber

Economy To Business Creation

Rodolfo Gonzzali Hurtado
Market Segmentation

The market segmentation is going to be based on three different aspects: geographic, demographic and
economic.

Geographically were taking in consideration Mexico. Demographically considering just ages, Mexico is
divided as followed:

After this, we decided to divide the Mexicans by the demographical variable age and took into
consideration some psychographic variables like personality. This way we could achieve this classification:

Babies and infants (0-2 years)

According to an article by Excelsior published in 2015, many Mexican couples do not seek to have
children and are worried about the high costs they would incur in raising them.

Children (3-8 years)

There is predicted for 2020 the number of children will continue diminishing. In 2015, the children
were representing 11 % of the Mexican population. According to a report written by Chamber of
Deputies about the Habits of the Internet users in 2015, the children begin to have access to the
Internet about 8 years, but a significant number started using it earlier.

Tweenager (9-12 years)

This segment is creating its own interests and preferences; the decisions on what food, cloth and
products to buy are made by the parents.

Teenagers (13-17 years)

In 2020 this segment will represent 8.6% of the total population. Though they still live with their
parents, they tend to be independent when making purchase decisions.
 Young Adults (18-29 years)
The members of this group are known as Millennials or Generation Y. In the recent years, more
are choosing to postpone the marriage to achieve their academic and professional goals. They
feel comfortable purchasing things online.

Adults (30-44 years)

According to an investigation by Club Med, despite this generation was not born with technology,
they do a good use of it: 69% use their mobile to send text messages, 63% to take pictures, 43%
to go online and 15 % to send and to receive e-mails.

Mid-Lifers (45-59 years)

This is the first generation of old people who are capable of using the most wide range of
technology, because this way they feel that they have a better quality of life (Ann-Charlotte,
Senior Advisor at Ericsson Consumer Lab).

Late-Lifers (60+ years)

A great problem for this segment is the retirement age, the low pensions they receive and the
poor saving culture that exists in Mexico.
Taking into consideration all of the above information, our target market will be:

Young Adults

Region: North America

Geographic
Country: Mexico

Age: 25-30 years

Generation: Y / Millenials
Demographic
Genre: Both
Income: Mid-high.

Personality
Postpone marriage
Psicographic Adopt technology
Comfortable purchasing online
Workaholics

Look for immediate results

They decide what to buy
Conductual
Not too loyal
Analysis of Demand

Price:

Method used: margin.

P = C / 1-%margin

%margin = 50%

Making an average of our previous delivery, the average cost would be of $96.

P= 96 / (1-0.50)

Price per package:

P = $192

Direct Competition
In Mexico exist companies that have a delivery service of already prepared food. They also offer different
recipes and change the menu every week. They are:

Listo para Cocinar

Pinchef
ChefBox
Deli Delivery
BuenChef

Indirect Competition
A lot of companies are adopting the delivery service such as Soriana, Chedraui and Walmart. There are
also restaurants such as: Fishers, Starbucks and Dominos Pizza. And the one who has just became part of
the competition, UberEATS.

We dont have accurate information about market participation of each of the above-mentioned
companies, however we can make an analysis based on their mobile app downloads success. Sin Delantal
is the most successful, followed by Fishers, Starbucks Mexico, and Mercadoni. All of them are on digital
stores as free download and work for both, Android OS and iOS.

A study made by Euromonitor, show how often people cook according to their age, and the results are
the following:
 The same study reveals how much time it takes to cook for each sector according to their age. The
results are the following:

This confirms our target market decision, people between 25 and 30 cook at least 2 times a week and
spend at least 15 minutes cooking.
Supply Analysis
The explicit costs will go as follow:

Product cost: average of $96

Package Cost: $39.50
Shipping cost: $15

The implicit costs will go as follow:

Time consuming

The technology used will be handcrafted, so we can save costs in technology, as the only thing we will
need to present the product to the final consumer is going to be the thermic box to keep all the ingredients
fresh and the recipients where the ingredients are going to be.

This is the reason why we will use hand crafted technology, also, this will give an aggregated value to the
product.

Most of our required inputs are of easy access, as they are raw food ingredients, so the plan is to get all
of these inputs from the Central de Abastos, as there we can buy them in wholesale and with the best
cost in Mexico City. The only input that is going to be more complicated to get at a good price is the
thermic insulator, but we will manage to get a good supplier.
Market Analysis
Young Adults
Size of the Mexico is a young country with 46% of their population being under 25
market years old

Growth Rate The healthy food growth demand can be seen on the sales increase.

Between 2011 and 2015 online sales increased 232% while mobile app
sales increased 1,124%
"According to a recent study made by PayPal of 22 international markets,
Mexico leads in the adoption of the m commerce [] adoption of the
smartphone technology is going up, near 90 % of the Mexicans between
Market Power 18 and 24 years that have a smartphone, have done purchases it (above
64 % of the global average) " .-article in latintrade.com
The increase of online sales, according to the sellers, continues in growth
in the big cities as Mexico City, Guadalajara and Monterrey ". - The Wall
Street Journal

Medium - nowadays there are 5 companies that are penetrating the

Number of
market. These are: Listo para cocinar, Pinchef, ChefBox, Deli Delivery and
companies
BuenChef.

Entry Barriers Big discounters control the Mexican market

Fast food services

Substitute
Home food
Products
Frozen food

Distribution
Easy We will manage the distribution
Channels Access

High
Company Fit
M-commerce and e-commerce is understood by the market
Factors:
Total Real GDP growth rate
The real GDP growth rate describes the economic growth of a country based on its change from
year to year. It takes into account consumption, investment, government spending, and import/export
of a country, when the real GDP is used, it is stated that the inflation is considered, which means, the
variation in the price level is accounted in the calculation. Concretely, it describes the economic well
being of a country.

From the graph above it is possible to see the increase in the value of the GDP with a constant deflection
in the second semester of the year, but even so, it has been increasing since 2011, which means for the
last five years it has grown.

For a business, it is important that the real GDP has a positive growth rate, because it determines that
the economic well being is increasing, while the buying power grows as well, it determines that the
economy is growing and represents new opportunities for businesses contributing to the economic
growth.
GDP per capita growth rate
GDP per capita divides the countrys gross domestic product by its population, therefore the
growth rate in GDP per capita, determines the growth rate in living standard for the population in a
country.

From the graph, the GDP per capita has decreased in great measure since 2010, but for the last 3 years it
has had growth not with a pronounced slope, none the less it has a tendency to grow. According to
forecasts, it will continue growing until 2020 which brings new opportunities to businesses, describing
the possibility of people to buy, and spend in services and products.
Inflation rate
Inflation is the rate at which the general level of prices for goods and services is rising and,
consequently, the purchasing power of currency is falling.

From the inflation rate graph, it is observable that the inflation in Mexico has been increasing for
the last year, this affects new enterprises, since the regular price of normal consumables are
increasing, and even though the GDP per capita is increasing, inflation increases as well, adding
both of this together, people are using most of their incomes to consume basic needs and services,
and it represents that they are not able to acquire new expenses.
Unemployment rate
The unemployment rate is the share of the labor force that is jobless, expressed as a
percentage. It is a lagging indicator, meaning that it generally rises or falls in the wake of changing
economic conditions, rather than anticipating them. When the economy is in poor shape and jobs
are scarce, the unemployment rate can be expected to rise. When the economy is growing at a
healthy rate and jobs are relatively plentiful, it can be expected to fall.

As stated before, the unemployment rate is completely related to the GDP per capita, and from the
graph, the unemployment in Mexico has been decreasing not constantly, thus it has some peaks,
but with a best fit line, it would be possible to determine that the unemployment rate in Mexico has
been decreasing since 2015.

Related to a company, it represents people within our country are acquiring more jobs, which
means more income, and with the model of our enterprise, it is beneficial that the unemployment
rate is decreasing since we would be able to focus on more target with the increase in GDP per
capita, and decrease in unemployment rate.
Interest rate
Interest rate is the amount charged, expressed as a percentage of principal, by a lender to a
borrower for the use of assets. Interest rates are typically noted on an annual basis, known as the
annual percentage rate (APR). The assets borrowed could include, cash, consumer goods, large
assets, such as a vehicle or building. Interest is essentially a rental, or leasing charge to the
borrower, for the asset's use.
Exchange rate
The price of a nations currency in terms of another currency. An exchange rate thus has
two components, the domestic currency and a foreign currency, and can be quoted either directly
or indirectly. In a direct quotation, the price of a unit of foreign currency is expressed in terms of
the domestic currency. In an indirect quotation, the price of a unit of domestic currency is
expressed in terms of the foreign currency.
Tax rate
A tax rate is the percentage at which an individual or corporation is taxed. The tax rate is the
tax imposed by the federal government and some states based on an individual's taxable income or
a corporation's earnings.
Wage rate
The wage rate is the pay rate based on unit of production or period of work time on the job.
Budget balance
Government budget balance is a financial statement presenting the government's proposed
revenues and spending for a financial year.
Trade balance
The balance of trade compares the value of a country's exports of goods and services against its
imports. When exports are greater than imports, that's a trade surplus. Most nations view that as a
favorable trade balance.
Government policies:

- Fiscal policy
Government spending policies that influence macroeconomic conditions. Through
fiscal policy, regulators attempt to improve unemployment rates, control inflation, stabilize
business cycles and influence interest rates in an effort to control the economy.
- Monetary policy

Monetary policy consists of the actions of a central bank, currency board or other
regulatory committee that determine the size and rate of growth of the money supply,
which in turn affects interest rates. Monetary policy is maintained through actions such as
modifying the interest rate, buying or selling government bonds, and changing the amount
of money banks are required to keep in the vault.
Conclusions
The contributions of our business will be separated in two:

The Mexican producers, as our company will only buy raw material from Mexican producers and
Mexican input we will help our domestic economy to be in constant movement. We will develop
our business by the rule of only buy Mexican products from Mexican producers.
The health in Mexico, we are the first place on obesity, as our products will have healthy meals
so the customers can cook it on their homes, we will help our Mexican society to eat healthier,
with the best quality ingredients got from Mexican producers

We want to make an impact not just on the Mexican domestic economy, but also in the general society,
helping them to eat healthier and have a better life quality obtained from our high-quality products.