Presentation of Marketing Plan for "Latea Perú" (Assembled Shoes for BOP people at Lima) Elective: Social Marketing - Marketing at the BOP IE Business School, November intake 2013

1. BOP Marketing Plan for
“Latea Peru”
Marianna Pardi
Juliana Cabal
Sugita Yoshitaka
Raul Manrique
Pablo Narvaez
Joao Rendon
Marketing at theBOP final project

2. Agenda
The opportunity
Our proposal
Expected outcomes

3. The
opportunity

4. BOP at Perú
PERU
30,4 MM people
NO BOP
22,6 MM
BOP “consumer”
5,9 MM
Extreme Poverty
1,9 MM
BOP
7,8 MM
By province….
Lima
Piura
Cajamarca
La Libertad
Puno
Loreto
Ayacucho
Ancash
Lambayeque
Junin
Cusco
Huánuco
San Martin
Huancavelica
Apurimac
Amazonas
Arequipa
Pasco
Ica
Ucayali
24,1%
8,6%
8,2%
7,4%
5,4%
4,9%
4,4%
4,1%
4,1%
4,0%
3,6%
3,4%
3,3%
3,0%
2,6%
2,2%
2,2%
1,5%
1,0%
1,0%

5. BOP at Lima
(1,4MM people)
Average household size: 4,6 people
Most common jobs
* Street vendor
* Maid
Average monthly
household income:
S/. 960
$ 343
€ 255
Aprox: € 1.85 m/day
Most common jobs
* Constr worker
* Watchman
* Janitor
* Messenger
-----------------------* Electrician
* Mechanic
* Plumber
-----------------------* Taxi / bus driver
% of food in monthly
expenditure: 67%
Average $ contributors: 1,6 members
Average years of education: 8,4 (High School)

6. BOP house
Roof material:
Calamine – corrugated iron (70%)
Wall material:
Triplay – wood (48%)
Brick and cement (34%)
Carton – rush mat (6%)
Pavement – side walk
NONE (77%)
Track
NONE (72%)
Floor material:
SOIL (55%)

7. BOP at Lima
(1,4MM people)
LIMA NORTH (23,9%)
•Carabayllo
•Comas
•Independencia
•Puente Piedra
•San Martín de Porres
CALLAO (9,5%)
Callao
Ventanilla
LIMA DOWNTOWN (2,9%)
Rímac
LIMA EAST (25,9%)
•Ate – Vitarte
•El Agustino
•San Juan de Lurigancho
•Santa Anita
Lima SOUTH (27,5%)
•Pachacamac
•San Juan de Miraflores
•Santa María del Mar
•Villa El Salvador
•Villa María del Triunfo

8. BOP at Lima
(1,4MM people)
LIMA NORTH (23,9%)
•Carabayllo
•Comas
•Independencia
•Puente Piedra
•San Martín de Porres
Most of them live at the
periphery / outskirts; in
sand or hill /mountain
environments.
CALLAO (9,5%)
Callao
Ventanilla
LIMA DOWNTOWN (2,9%)
Rímac
LIMA EAST (25,9%)
•Ate – Vitarte
•El Agustino
•San Juan de Lurigancho
•Santa Anita
Lima SOUTH (27,5%)
•Pachacamac
•San Juan de Miraflores
•Santa María del Mar
•Villa El Salvador
•Villa María del Triunfo

9. BOP environments

10. BOP environments

11. Unmet Need
Household Average Monthly Spending in shoes….
Segment
Total
(a+b+c)
Adult Shoes
(a)
Kids Shoes
(b)
Repairing
(c)
BOP
€ 8,2
€ 6,1
€ 1,9
€ 0,2
No BOP
€ 10,5
€ 8,5
€ 1,6
€ 0,4
Average Monthly
Household
income
BOP: € 255
NO BOP: € 606
% of shoes in monthly
expenditure
BOP: 3,23 % !!! (8,2/255)
NO BOP: 1,55% (10,5/606)

12. Unmet Need
Household Average Monthly Spending in shoes….
Segment
Total
(a+b+c)
Adult Shoes
(a)
Kids Shoes
(b)
Repairing
The reason:
(c)
BOP
€ 8,24
€ 6,11
€ 1,86
€ 0,27
No BOP
€ 10,52
Average Monthly
Household
income
BOP: € 255
NO BOP: € 606
€ 8,50
Intensive
€ 1,59
€ 0,43
use
+
% of shoes in Tougher
monthly
ground
expenditure conditions
BOP: 3,23 % !!!
NO BOP: 1,55%

13. Our
proposal

14. * Manrique
Shoes Group
* Milk Glass
& Popular
Dining Room
Associations
* Local majors
* Product
* Sales
* Marketing
* Shoe design
* Sales Force
Training
* D2D sales
* Sales force
(B2C)
* Storage
* Distribution
* Administrative
Assembled,
sole resistant,
confortable
and affordable
shoes adapted
to ground
characteristics
* Though
sales force.
and promo
activities
Consumers
I. Men
- Adult
- Kid /School
II. Women
- Adult
- Kid / School
* Local Partners -D2D
* Deportive centers /
Zonal Park
* Shoes selling

15. Product
Two Component Assembled Shoes
PRODUCT CHARACTERISTICS
SOLE + INSOLE
* Material: Expanded virgin pvc with nitrile
dust + 2mm polyurethane foam
* Footprint without cavities
* Density: 0,5 – 0,65 gr / cm3
* With eyelets for shoelace attachement
•
•
•
•
Lightweight
Anti fatigue propierties
Good cushioning, resistance and grip.
Enhanced blood circulation & knee –
kidney protection.
BENEFITS (FROM BOP PoV)
UPPER
* Material: Plastified canvas
* Assembling shoelaces: # 18 nylon
* Different designs & colors for future
replacement
• More resistance
• Impermeability

16. Product
Proxy Reference: Armo Shoes (Chile)
“Inclusivo” fair trade project
http://ralonso.com/?portfolio=armo

17. Product
Resistant sole + different upper colors / designs
Association with key partner “Manrique Group”
Specialized in security shoes now looking x diversification opportunities
http://www.grupomanrique.com/

18. Place
Local Partners
D2D Sales
Zonal Parks
Sports Camps
* Products on consignment + catalog
* Only for main campaigns: School - Christmas
* Mostly women
* Sponsored by majors
* High capilarity
* BOPs in “buying mood”
* Most personal channel. / high level
of persuasion.
* Opportunity to develop “experience” with BTL activations.

19. Local Partner Model
1
Our BOP company
Training,
Promotion
incentive
Shoes
Supply
4. Customer
feedback
LP
2.
Products
Shoes
Promotion/
Selling
CL
3. Purchase
CL
CL
CL
Our warehouses
1) Our BOP Company
- Trains Local Partners (LP)
(mainly unemployed females)
2) Local Partners (LP)
- Acquire products from our warehouses
- Promote our products to their neighbors
- Explain the benefits of the shoes with
catalog
3) Clients (CL)
- Buy shoes
4) Our BOP Company
- Analyze local needs and develop new
products by collaborating with LPs
(in the future)

20. Promotion
Feeling represented by promotor.
One2One promotion
Events at Sports Camps / Zonal Parks
POP
Advertisement
Where? BOP highest frequency channel

21. (**) To make it simple we just use variable costs and not fully allocated ones
(+ administrative, marketing, sales training, distribution)
Price
UPPER
SOLE
VARIABLE
COSTS
(x pair of
shoes) (**)
=
+
Adult:
Kid:
€ 2.65
€ 2.20
COGS x BOP
company
Adult:
Kid:
€ 2.26
€ 1.88
Adult: € 4.91
Kid: € 4.08
Adult:
Kid:
+14%
+14%
YTD Benchs
Price x BOPs
Adult:
€ 10.58 - € 13.23
Kid:
€ 7.41 - € 10.05
Adult: € 9.26
Kid: € 7.94
Price x distributor
Adult:
Kid:
+39%
+39%
Adult: € 5.69
Kid: € 4.76
Margins were set based on learnings pointed in “Mrktg Innovative Devices x BOP”
Hystra, March 2013

22. Expected
outcomes

23. Marketing & Financials
To have green numbers we would need…
* Awareness >= 40% of HH.
* Break even point: 48,2M pairs
* Penetration (Trial) >= 17% of HH.
(40,5M kids & 7,8M adults or
other combinations)
* Market share >= 1,37%.
It´s a real Challenge. To get scale we rely on our local partners, and
that´s why we need to ensure attractive margins x them.

24. OUR SOCIAL IMPACT…
ASPIRATIONAL
FUNCTIONAL
EMPLOYMENT
(Quality)
(Social Integration)

25. Thanks a
lot!!

26. Back up
information

27. LIMA
BOP shoes market size
X
PERU
291M households
€ = € 28.7MM
€ 99 yearly spending
in shoes x HH
€ 122.7MM

28. YTD Habit: Channels were BOP interact the most
47%
39%
5%
3%
3%
3%
YTD Habit: Channels were BOP buy shoes
46%
31%

29. Distribution model trade - offs
PROS
* No shoes at YTD
* Highest interaction
* High bond channel
* Opportunity x trade mrktg
– POS activation
CONS
Franchise
D2D
* Added complexity
* Added complexity
(28.2M POS / 2.8M x district) (22.8M POS / 2.3M x district)
* Not fit with current habit
* POS willingness to buy
* 2nd channel in current habit.
* High interaction
* High bond channel
* Opportunity x trade mrktg
– POS activation
* 1st channel in current
habit.
* Easier to serve POS
number (50 x district)
* Margin orientation
* Conflict vs own
retailer brands
* Most personal channel.
* High level of
persuasion.
* Added complexity
(291M households)
* Sales force training
and management.
* Security / fraud issues

30. YTD Habit: Means of transportation (most used)
50%
32%
Daily time spent at public
transportation: > 1,5h
13%
YTD Alternative Channels Impact (% bought what they´ve seen at…)
58%
57%
51%
2%

31. Information Sources
i) BOP at Perú
* Informe Técnico Pobreza en Perú 2012. INEI
* Encuesta Nacional de Hogares 2012 - Modulo Vestido y Calzado. INEI
* Niveles Socioeconómicos de la Gran Lima 2012, Ipsos.
* Perfiles Zonales de la Gran Lima 2009, Ipsos
* Hábitos y Actitudes hacia Canales Alternativos 2012, Ipsos.
http://www.youtube.com/watch?v=VjFuiKeoJAI
http://www.youtube.com/watch?v=v7mkLORH3RY
ii) Propuesta de Marketing
* Producto armable
Proyecto Inclusivo de Comercio Justo en Chile desarrollado por Rodrigo Alonso.
http://ralonso.com/?portfolio=armo
* Márgenes para el distribuidor
-The base of pyramid distribution challenge. XIFMR Research, 2011. Centre for
Development Finance.
- Marketing Innovative Devices for the BOP. Hystra, March 2013.