Purpose
This business plan was written to assess the viability of the intended Fruit business exportation of fruits to Mexico. The project considers the cultural, economic, and political aspects of the receiving country to determine the conditions required for successfully introducing the product in the Mexican market. The cultural components include the norms, practices, and social structures in Mexico that may hinder or aid in the product’s success. The economic elements encompass the economic development of Mexico and consumers’ purchasing power that affect product acquisition and distribution. On the other hand, political features like legal and government structure in Mexico have also been assessed. Finally, the outline provides a marketing plan that proves essential in carrying out brand promotion by looking at the various market characteristics available in Mexico.
Executive Summary
According to the World Health Organization (WHO), adequate fruit-eating could avoid 2.7 million deaths due to cardiovascular diseases. Fruits boost health and body mass index (BMI) by delivering minerals, fiber, vitamins, and other dietary ingredients, such as photochemicals that provide a variety of photo-protective properties, so improving the immune function and other biological activities. Mexico has recorded a 30% reduction in domestic fruit purchases. As a result, Mexico is the optimal market for exporting the desired fruits. Additionally, investigations demonstrate severe effects on food and agriculture networks months after the widespread COVID-19 outbreak. Fruits have historically been Mexico’s most popular brand and merchandise. Unlike in the United States, Mexico rigorously regulates dietary supplements and herbal products.
Tariff barriers would immediately diminish the Fruit Corporation’s revenues from imports and increase costs for American customers on everything, including fruits. Therefore, it is generally recognized that the Fruit business lacks this expertise and capabilities, and as a result, larger firms are more likely to weather exporting difficulties than it is. To strengthen its competitive edge, having an abundant on many social networking sites will help various commercial purposes and is an easy statistic to measure. Each online communication channel will be treated uniquely by personalizing responses using fruit-related terms. In Mexico, the effective shipment and information network guarantees that the fruits reach their target consumer on time and that the enterprise receives timely feedback from customers concerning the brand.
Exporting Fruits to Mexico: Challenges during the Coronavirus Pandemic
The product chosen for discussion is fruits, whereas the country of exportation is Mexico. The rationale for the choices is that the World Health Organization (WHO) believes that sufficient fruit consumption could avert 2.7 million deaths from cardiovascular illnesses (Venegas-Aviles et al., 2020). Fruits benefit health and body mass index (BMI) by providing minerals, fiber, vitamins, and other nutritional elements, such as photochemicals with various photo-protection, strengthening the immune system and other biological functions(Venegas-Aviles et al., 2020). Venegas-Aviles et al. (2020) extensively demonstrated that a high fruit intake is connected with lower levels of obesity, myocardial infarction, type II diabetes, and numerous forms of cancer, either directly or indirectly. Many of these degenerative illnesses are prevalent in the Mexican population.
According to food financial indicators, global availability of fruits has surged, while ingestion has dropped in several nations, notably low- and middle-income economies. Moreover, Venegas-Aviles et al. (2020) established that fruits intake worldwide is significantly less than acceptable amounts. In Mexico, a 30% decline in fruit purchases at the domestic level has been reported (Venegas-Aviles et al., 2020). Therefore, Mexico proves to be the ideal marketplace for exporting the intended fruits. Moreover, months after the global COVID-19 epidemic began, researchers observed adverse consequences on agriculture and food systems (Haqiqi & Horeh, 2021). The pandemic’s harmful effect on world poverty, agricultural production and distribution networks, wellbeing, and inequities is also becoming apparent. While unpredictability is inherent in the farming sector, COVID-19 has exacerbated producers’ price instability (Haqiqi & Horeh, 2021). Due to the pandemic’s hurdles, farmers worldwide are battling to maintain a lucrative production.
Situational Analysis
Definition of the Product
Fruit is a developed ovary and its related elements in botany. It typically includes seeds formed from the encased ovule during pollination; however, proliferation without fertilization referred to as parthenocarpy, is recognized in some species, such as bananas (Bobrov & Romanov, 2019). Fruits are rich in vitamins, fiber, and antioxidants. While fresh fruits are perishable, they can be preserved in refrigerators or by removing oxygen from their wrapping vessels. Fruits can be juiced, jammed, or jellied and preserved through dehydrating, packing, fermenting, or pickling (Bobrov & Romanov, 2019). Waxes developed from bayberries and vegetable pearls generated from the thorny fruits of a South American palm species (Phytelephas macrocarpa) are also significant fruit-derived goods (Bobrov & Romanov, 2019). Numerous medications are derived from fruits, including morphine, derived from the opium poppy fruit. Fruits can be classified into two major groups: fleshy and dry fruits. In fleshy ones, the pericarp and auxiliary components grow into juicy structures, including oranges, eggplants, and strawberries.
Brief History of Mexico and Its Trade History
Mexico was founded on the battlefields of military means and civil strife. In the operation, the European conquerors dramatically affected and damaged, if not completely obliterated, a civilization with its structures and intricate culture (Prescott, 2018). The destructive aspects of colonization included the dramatic decrease of the native inhabitants from 25 million to less than a million within a century (Prescott, 2018). The decline was due to combat, ailments, disempowerment, and labor and resource requirements encroachment (Prescott, 2018). Traditionally, a considerable percentage of production has been concentrated in and around the Mexico City metropolitan area, owing partly to the industry’s size and excellent infrastructure.
Unquestionably, technological contrasts with Europe inhibited trade contacts, such as the lack of a wheel for mobility, a metal devoid of iron, and a dependency on symbols keyboard layouts exclusively. Nonetheless, Mesoamerican agricultural innovation was rich in diversity and geared towards labor-intensive practices that were well-suited to pre-conquest Mexico’s production factors. The capital’s urban area continues to dominate production, producing an astounding portfolio of goods, including vehicles, technology, iron and steel, cuisines, and a wide variety of consumer products.
The state’s efforts to relocate companies outside of the megalopolis of Mexico City have been significantly supported by the rising number of maquiladoras manufacturing commodities such as automobiles and car components, electronics, clothes, and furniture. Arends-Kuenning et al. (2019) insinuated that most maquiladoras are foreign-owned and located in Mexico to take advantage of cheap labor and lax environmental laws. Following the North American Free Trade Agreement (NAFTA) implementation, foreign investment exploded in cities, particularly in the Central and Northern areas (Arends-Kuenning et al., 2019). As a result, commercial production in Mexico became more widespread than ever.
Cultural Overview
For the overwhelming bulk of Mexicans, cuisine varies considerably by location, regardless of economic status, but mainly relies on a traditional trinity of staple foods: corn, beans, and squash. Additionally, Mexicans frequently consume avocados in the manner of guacamole and chili peppers, amaranth, tomatoes, papayas, potatoes, lentils, plantains, and vanilla. The contemporary Mexican food norm is divided into three sections, reflecting a particular food category: vegetables and fruits, cereals and legumes, and animal-derived items such as dairy, meat, poultry, and fish. The plate is surrounded by a band colored differently for each category: emerald for vegetables and fruits, yellow for carbohydrates, and red for legumes and animal ingredients. Therefore, these norms and practices would enhance the consumption of the intended fruits to be exported to the Mexican economy.
The Mexican population is highly stratified according to income and educational attainment. Although a middle class has strived to grow in cities, the primary distinction is between the prosperous, well-educated elites and the urban and rural poor, who make up the overwhelming majority of the population. Although a rural middle class has developed, it accounts for a tiny proportion of total farmers. As a result, the farming culture of Mexicans may hinder the introduction of the intended fruits into Mexico because most people grow fruits. As a result, the cost of purchasing compared to the cost of planting is higher thus would prefer their grown fruits. Fruits have been the most common brand and commodity in Mexico.
Indeed, it is renowned for producing high-quality Fruit, accounting for roughly half of all Fruit exported into the United States. Among all of its crops, the avocado fruit is by far the most prominent (Araújo et al., 2018). As a result, this solitary fruit gains even more prominence, and Mexicans may proudly declare that it plays a significant role in their cuisine (Araújo et al., 2018). Given the recent increased morbidity and mortality in Mexico due to diet-related disorders such as overweight, hypertension, and coronary cardiac arrhythmia, fruit ingestion is beneficial (Gehlich et al., 2019). Therefore, with this positive perspective about the health relevance of fruits in reducing the prevalence of such diseases, the Mexican market will aid in the positive reception of fruits. Tacelosky (2018) enumerates that Mexico’s literacy level was approximately 95.25% in 2018. Therefore, this provides individuals with the ability to understand and comprehend instructions and use the product. Since most Mexicans understand and can easily learn the Spanish language, reading the labels on the packaged fruits would promote the selling of the commodity.
Political Environment
Mexico is a federation comprised of 31 states plus the Federal Territory. The executive, parliamentary, and legal departments of administration are lawfully segregated. The COVID-19 outbreak creates unpredictability for the Mexican economy and US entrepreneurs’ commercial developmental projects. The government and commercial sector have made concerted attempts to reactivate the economy. However, several purchase orders, significant capital investments, and other corporate undertakings have been halted or are progressing more gradually than before the epidemic. In several portions of Mexico, notably some border regions, certain port districts, and trucking and rail arteries, a prolonged conflict between criminal gangs have heightened instability (Nuccio et al., 2021). The state department performs periodic security assessments of each Mexican state. At the same time, the American Chamber of Commerce in Mexico (AmCham) publishes an annual review of commercial security measures (Nuccio et al., 2021). Mexican customs restrictions, quality standards, and employment laws could provide difficulties for US businesses.
Occasionally, the Mexican government releases lists identifying the various commodities subject to special import restrictions. Since products are identifiable by their harmonized protocol unique identifier, US manufacturers must classify them appropriately (Nuccio et al., 2021). For instance, the Secretariat of Health, through its Federal Commission for the Protection against Sanitary Risks, necessitates either advance hygienic shipping permission or confirmation of aseptic import (Nuccio et al., 2021). These authorizations are for medical devices and equipment, pharmaceutical drugs, household goods, processed foods, and specific contaminants.
Unlike in the United States, nutritional supplements and herbal items are strictly regulated in Mexico. Therefore, it would be essential to consider some of the standards required during importation to export fruits to Mexico. When trade disputes with China erupted last year, many businesses sought safety in a nation with a long and committed relationship with the US: Mexico (Casselman, 2019). Press (2021) stated that in recent years, Washington State apple sector fruit sales had decreased significantly. According to the Washington Apple board figures, the state shipped 18.8 million 40-pound boxes of apples from the 2020-21 crop, down 20.5% from the same time in 2019-20 and 16.4% from 2018-19 exportation season (Press, 2021). Trade barriers between USA and Mexico have adverse effects on imports and exports from the USA.
Tariff barriers would reduce the Fruit business earnings for the owners’ imports and raise prices for American customers on anything from avocados to other fruits in the immediate future. Due to their size and financial resources, larger enterprises can adjust more effectively than SMEs to these trade restrictions and are likely to have a strategic advantage in foreign markets (Paul et al., 2017). The assumption is that large enterprises that have established their resources and competencies through experience, such as administrative expertise and exporting bureaus, are better equipped to pursue global competitiveness.
Therefore, it is well established that the Fruit business lacks these resources and expertise, so larger enterprises are more likely to withstand exporting problems than it. Prior to shipment, all commodities destined for sale in Mexico must be branded in Spanish (Nuccio et al., 2021). Products subject to industrial and hygienic performance requirements, known as Normas Oficiales Mexicanas (NOMs), must abide by the rules provided in the corresponding NOM. Therefore, the Fruit business will have to ensure that the package labels are written in Spanish to comply with the regulatory requirements and make it easier for the target market to understand and comprehend the product’s usage instructions.
Export Marketing Plan
Increasing the Fruit brand recognition is a long-term goal that encompasses many minor, realistic objectives under this effort. Raising awareness does not require significant advertising expenses or outlandish marketing tactics; instead, the Fruit business generates awareness through ongoing little promotion initiatives. Several strategies for increasing brand awareness and product identification include developing a mobile-friendly webpage, developing a recognized and distinctive emblem, and developing brand visibility at festivities in Mexico.
Additionally, having a sizable following on many social media sites benefits a variety of commercial objectives and is a straightforward statistic to evaluate. Optimizing comments with fruit-related phrases will ensure that each social networking channel is handled distinctively. Posting exact information on the Fruit industry’s Facebook, Twitter, and Instagram accounts will quickly become tiresome. As a result, allocating each framework to a specific aim will aid this endeavor. For example, the corporation will use Facebook to advertise events and offers, Instagram to highlight the fruits and the individuals who like them, and Twitter to engage with the brand’s audience on a more personal basis.
The Mexican market encompasses the following features that make it ideal for Fruit’s business success. It is predisposed as the market segment requires fruits and is inclined to acquire them. Since Mexico has a high prevalence of overweight, fruit consumption is critical in reducing obesity due to its satiating effect, high carbohydrate and moisture content, and low energy consumption. Additionally, a perfect fit exists as the Fruit business’ offers and competencies are well aligned with the needs of the target market and its purchasers. Since the Fruit business is entering a foreign market, it is ideal to use country screening to assess political and economic factors in Mexico that could hinder or promote the firm’s activities. Additionally, comparing fruit prices with local farmers would form a basis for assigning costs to their fruits.
Economic Development
Mexico satisfies all of the requirements for being classified as a developing economy. The nation’s gross domestic product per capita outperforms most of its developing economies counterparts but stops flat of the standard expected to be classified as an industrialized nation (Cantu, 2017). Mexico’s most distinguishing feature as an expanding economy is not its present incarnation but its growth performance. The country continues to have a significant poverty level, but it has been declining rather than continually increasing (Cantu, 2017). Thus, this tendency has shifted in the last year due to the worldwide impact of the COVID-19 epidemic. Mexico’s purchasing power parity (PPP) was 9.5 LCU per foreign dollar in 2020 (Cantu, 2017). Mexico’s PPP increased from 6.3 LCU to 9.5 LCU in 2001 to 9.5 LCU in 2020, expanding at a mean annual pace of 2.18% (Cantu, 2017). The nation’s Yearly Household Income per Capita was 2,639.778 USD in December 2020, down from 3,086.630 USD in December 2018 (Cantu, 2017). Over the last decade, Mexico has turned into a worldwide production base due to recent infrastructural development.
The nation has provided a modern economy, home equity, and modern infrastructure throughout the state. Mexico revealed a commitment to invest approximately $44 million in new and enhanced infrastructure in 2019 (Cantu, 2017). The rapid growth of the Mexican economy and the government’s continued investment in infrastructural development provide an avenue of success for the Fruit business. Appropriate distribution and communications network ensures that the fruits will get to the intended market on time and that the business receives efficient feedback from customers regarding the product. However, the reduced purchasing power among consumers and the prevailing poverty among citizens will make the business charge lower prices for its products, thus lowering its projected future earnings.
Summary
According to food financial statistics, worldwide availability of fruits has increased, but consumption has decreased in numerous countries, deficient- and middle-income regions. The pandemic’s negative impact on global poverty, agricultural manufacturing and distribution connections, wellness, and inequity is also becoming apparent. Mexicans typically consume avocados in the form of guacamole, along with tomatoes, papayas, potatoes, and plantains. As a result, Mexico established itself as the appropriate market for shipping the desired fruits.
Fruit consumption is advantageous in light of the recently increased risk of death in Mexico due to diet-related illnesses such as obesity, diabetes, and coronary arrhythmia. Therefore, this favorable outlook on the health benefits of fruits in reducing such diseases, the Mexican market will contribute to the positive reception of the Fruit’s business product. Additionally, the Mexican market possesses the following characteristics that make it perfect for developing Fruit’s operation. Its predisposed nature is due to the market segment necessitating and desiring fruits. However, due to the Fruit business’s scale and financial means, it will be challenging to alter trade regulations and likely lack a competitive edge in overseas markets like Mexico.
References
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