MARKETING ACKEE IN THE UNITED STATES OF AMERICA

A RESEARCH PROJECTPRESENTED IN PARTIAL FULFILLMENT OF THE

REQUIREMENTSOF THE COURSE: MBAP 539; Applied Marketing &

International Trade

Dr. R. G. WilliamsResearched by: Beverley Oliver-Cunningham

Date: September 15, 2002

Northern Caribbean UniversityCollege of Professional & Continuing Education and Human

Services

MBA ProgrammeACKNOWLEDGEMENT

I would like to express gratitude to my tutor, Dr. R. Williams for his instruction in the

subject Marketing. He was very instrumental in the way he delivered his lectures and

teaching methods employed. Dr. Williams gave us a number of case studies which we

were asked to read and analyze in relation to specific chapters in the prescribed text.

Such cases encouraged critical thinking, and co-operative learning among students

The cases were varied and provided an opportunity for us as students to apply the

concepts and principles that were appropriate in marketing globally in a changing world.

The text covered all areas of marketing but the specificity was globally.

This course therefore exposed us to creating a global mindset when marketing, as we are

living in a multi-culture society where nothing should be taken for granted as what is

acceptable in one culture may not be in another.

iEXECUTIVE SUMMARY

Jamaica National is among a number of growing exporter of processed foods mainly

cooked canned ackees and bottled cooking oil to the United States Market. The company

started out as a sole partnership with two machines for the first two processes and later

acquired two for the two latest processes. The company earns a considerable amount of

cash for local sales but has been earning in excess of that from its exports especially

ackee and cooking oil sales.

The objectives of the company is to control 50% of the market share for ackees

internationally and to expand its product line using the by-product of ackee. The

company expect in another six (6) month’s time to embark on a new project to improve

its profitability.

The project will see the introduction of a new laundry soap which will be another by-

product to be made from the pods of ackees. This will first be launched on the local

market before releasing it to regional and ultimately international markets . Funding to

operationalise the project was sought from National Development Bank (NDFJ). The

proposal was submitted, examined and funding to the tune of $1,000,000 was granted.

This fund will be used to put in machinery for production purposes.

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INTRODUCTION

Marketing is a set of activities performed by organizations. These activities in turn seeks

to accomplish the organization’s objectives by anticipating that the needs of the

customers or clients will be satisfied by this offering whether it be goods or services.

Marketing therefore should begin with potential customer needs, followed by

determining what goods and services should be developed and how they will be

marketed.

It stands therefore to say, every society needs an economic system which is generally

made by Government planners whether it be a planned economic system where what is to

be produced, by whom, when, and distributed to whom is decided on by the state. On the

other hand it can also be a market-driven economic system where individuals enjoy free-

dom of choice, in that they are not forced to buy an goods or services, except those that

must be provided for the good of the society which they are in turn taxed to pay for.

Similarly, producers are free to produce what they wish once they adhere to the rules laid

down by government, ands earn a profit to stay in business. However, with consumers

and producers making free choices, there can be conflict because what may be good for

one society may not be good for the other society. So what is the role of the government

in all of this? Besides setting and enforcing the rule of import and export trading that

affects international competition, regulate radio and television broadcasting, government

agencies should control the interest rates and supply of money, sometimes control wages

and prices, and so on.

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INTRODUCTION

1.1 Purpose/Objective

The ultimate objective of this assignment is to be the Global Marketing Executive

responsible for entering and launching anew product globally. The product being

considered is marketing of one of Jamaica's indigenous product which is ackee.

The information given will give the performance of the domestic industry, global

industry's performance and analysis including all the relevant risk factors

involved and justification of decision to enter that country with such product. The

specific objectives of the study are the following:

To provide an analysis of the global marketing opportunities

To develop appropriate global marketing strategies

To design and manage an appropriate marketing programme and marketing

effort

To market a product with high value added

To market the highest quality canned vegetable, and

1.2 JUSTIFICATION

@@@@@@@The WTO, Trade Policy Review 1998, Jamaica indicates that Jamaica needs a

stable domestic economy and open access to export markets if it is to realize

renewed economic growth. Despite comprehensive structural reforms in the mid

1990's, a new WTO report and the first on Jamaica's trade policies and practices,

notes that Jamaica's economy is highly vulnerable to domestic and external

shocks. While rising production costs and an appreciating currency have undercut

Jamaica's competitiveness, changes in external markets are making it more

difficult for Jamaica to export key products such as clothing, sugar, bananas and

bauxite. Moreover, the expiry of EU preferential trade access under Lomē IV and

the recent WTO legal rulings on the EU banana regime will affect Jamaican

exports.

Because of the removal of preferential markets, globalization will have a serious

impact on the country's performance, therefore it is critical for Jamaica to achieve

production levels, in both domestic and export markets, that will make the

economy viable in the market place.

But even as Jamaica moves towards becoming a competitive economy, the

changing economic scenario and structure has necessitated the re-evaluation of

the role and contribution of the agricultural sector vis-à-vis the economic

development of the country. With the focus given to industry as one of the

engines of growth, it is noted that the agricultural sector's importance to the

economy was reduced relative to the position it held before. The new macro

economic framework therefore requires that adjustments be made to ensure that

the sector remains relevant and continue to provide the support required towards

the efficient performance of the sector.

Due to the above concerns, considerations have been given to improving the

agricultural sector by looking at increasing export of Jamaican ackees. This

means that ackee production which is presently commercialized on the local

market needs to be commercialized and exported to the United States in a legal

way as most of our Jamaican ackees reach the United States via Canada.

Presently, the ban that was placed on ackees for 28 years was lifted on July 7,

2002. See article entitled : The Day Ackee got its Visa in the Daily Observer of

Tuesday, July 9, 2002.

2. INDUSTRY PROFILE OF THE DOMESTIC MARKET

PRODUCT HISTORY AND DESCRIPTION

Ackee is a tropical fruit which was taken to Jamaica by Captain Blythe in

the 18th Century. The fruit is grown all over the island especially in the

following parishes: St. Catherine, St. Thomas, St. Ann, Clarendon and

Westmoreland. The fruit bears on medium-size trees in pods which are

red in color and opens when mature exposing its arils which is what is

consumed. The pods each generally consist of three arils which are deep

yellow in color, high in cholesterol content with black seeds attached.

Hypooglycin is a poisonous gas present in the unripe fruit but diminishes

to insignificant level when the fruit is ripe. The fruit if eaten unripe

results in considerable vomiting and ultimately hospitalization. To

identify the fruit when ripe the pods of ackees have to burst open naturally

expelling hypoglycin. The fruit unlike other fruits cannot be eaten as is,

but instead has to be cooked.

Ackee is a perennial crop and is plentiful in January and July. The fruit to

the surprise of many is eaten as a vegetable and contains a lot of oil.

Ackee and salted cod fish is Jamaica’s national dish and is mostly eaten by

West Indians – Jamaicans in particular. Ackee is also popular as a

breakfast item in local hotels and the product is sold to hotels in Kingston,

Ocho Rios, and Montego Bay in bulk packages of 50 pounds. Ackee is

grown on a large scale and is sold in the local markets at a price of as low

as J$20.00 to a high of J$50.00 per dozen. Ackee has a long-standing

history and there is even a song sung in Jamaican Creole about ackees

entitled: “Caa mi Ackee go a Linstead Market”. This song is common

among our folklore.

2.2. IMPORTS

The fruit has a lot of potential but because of the long standing ban, such

potential could not have been realized. However,

Since July 7, 2002, the Company has been engaged in marketing different

categories of cooked canned ackees ranging from low fat ackees to ackees

high in cholesterol. It is the extraction of oil from some of the ackees that

have given rise to the low fat brand of ackees. The oil extracted is a by-

product of ackees which is bottled and sold as cooking oil. The

production of oil has therefore created a third product in the family line of

ackee products. All these products are marketed locally and

internationally.

2.THE INDUSTRY

For over twenty-eight (28) years the United States Food and Drug Administration

had out an import alert on Jamaican ackees because of the hypoglycin content in

the fruit which makes it not completely safe for human consumption. However,

with active lobbying between US government by the US Ambassador in Jamaica

and government agencies in Jamaica namely: Jamaica Bureau of Standards,

Scientific Research Council, JAMPRO, Ministry of Agriculture, Jamaica Agro-

Processors Association, Jamaica Exporters Association, and Technological

Solutions Limited, the ban was lifted on July 7, 2002 .

At present there are twenty-two ackee manufacturers in Jamaica of which only

five (5) are FDA approved and the implementation of the Hazard Analysis

Critical Control Points (HACCP) applied to their businesses, see table below. Of

this number of approved processes only Jamaica National, Sunrite and Canco are

exporters of canned ackees to the United States.

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APPROVE ACKEE MANUFACTURING COMPANIES

COMPANY NAMES DISTRICT & PARISH OF ORIGIN

Ashman’s Food Products Bushy Park, St. Catherine

Canco Limited St. Thomas

Sunrite Central Village, St. Catherine

Tijule Company Limited May Pen, Clarendon

West Best Limited Darliston, Westmoreland

3. GLOBAL MARKET INDUSTRY PERFORMANCE

3.1 Overview

3.2 US Ackee Industry

3.3 European Ackee Industry

3.4 Popular Species of the Ackee

3.5 Competitive Advantage

3.6 Market Segments/Analysis

4. GLOBAL MARKETING STATEGY

5. DESIGN AND MANAGE AN APPROPRIATE MARKETING PROGRAMME

AND MARKETING EFFORT

Consumers describe the taste as being pleasant and when cooked and combined with

salted codfish can accompany a range of food kinds. Although the national dish is ackee

and saltfish, consumers have used a variety of other meat kinds as substitute for salt fish.

For example, cooked ackees can be heated and combined with pickled Mackerel or red

herring seasoned to taste. This mixture is generally eaten with roasted breadfruit or with

boiled bananas, yam and dumplin.

5. DISTRIBUTION

5.1 PACKAGING

Labelling of goods and their packages has been practiced from time immemorial

to facilitate stocking and marketing. Labels are designed to inform those who

handle, purchase or utilize them, about the nature of goods and weight or volume

of contents in packages. It is therefore critical that traders practice proper labeling

of commodities as the implication to the consumer for not doing so could lead to

serious consequences. Therefore as the global marketer I would ensure that the

following labelling requirements be met:

1. Product Name

2. Name of Identifiable Address of Manufacture/Distributor/Packer

3. Net Quantity Declaration

4. Ingredient Listing

5. Nutritional Information

6. Country of Origin

7. Instructions for use/handling

8. Storage Instructions

9. Pictorial Representation

10. Precautionary Statement

11. Language

12. Date Mark

13. Batch Code

14. Any other necessary information

The final product will be placed in 340gramms/ 12.250 ounces can packaged in

carton boxes of . A label in the color of red, green and gold of 11” x 4 ¼” in

diameter would be affixed to the can. J$170.00/ US$5.00/ UK£5. The label

would be printed in two languages, i.e. English and Spanish, the country of origin

stated as Jamaica, the mailing address, and bears a bar code. The product is seen

as unique in that, it is a fruit which is eaten as a vegetable.

5.2 PACKAGING PROCEDURE

Ackees will washed, picked, canned and salt added as preservative. The final

product will be placed in 340gramms/ 12.250 ounces can with red, green and gold

label which measures 11” x 4 ¼”. The price per can of ackees would cost

J$170.00/ US$5.00/ UK£5. The label would be printed in two languages, i.e.

English and Spanish, the country of origin stated as Jamaica, the mailing address,

and bears a bar code. The product is seen as unique in that, it is a fruit which is

eaten as a vegetable.

5.3 PRICE

The price per can of ackees would cost $170.00/US$5.00/UK£5

5.4 TRADE MARK

5.5 CONCLUSION

Being cognizant of the fact that adopting a global vision can be very lucrative for a

company, Jamaica National has realized the importance of global marketing and has

therefore taken into account the following factors in promoting its product: looking at

global marketing opportunities in the market place, designing and managing appropriate

marketing programme also conducting and environmental analysis of the targeted

country.

With a Marketing Executive taking into account all these factors in entering the global

market place, the company should be able to successfully compete gaining a considerable

share of the market.

The product is protected by trademark to prevent the product from being subject to

unethical, competitive business practices as what obtains in the case of Ricetec Inc. of

U.S.A. and Basmati producers in India. In the particular case, the Indian government

had failed to register the name Basmati, so Ricetec Inc. of the U..S.A. undersold

Basmati by labeling rice grown in the U.S.A. as ‘Kasmati, Indian-style Basmati’.

Authorities in India wrote to the Ministry of Commerce to pursue the case with Kasmati

but was unsuccessful as it was said ‘ If you don’t protect what you have, you don’t have

the right to keep it.’

The product comes in two grades which are low fat and high cholesterol ackees. The

ingredients listed are cooked ackees, water and salt, for the high cholesterol type and for

the low fat the same ingredients except that it is stated that ackees contain 1% fat for the

low fat type of canned ackees. One ripe ackee pod is conspicuously displayed on the

label with the recipe of Jamaica's National Dish - Ackee and Salt Fish on the side of the

can and instructions on how to prepare such dish. Jamaica National canned ackees have a

shelf life of one (1) year so the expiry date is generally stated.

All brand of ackees undergo the same manufacturing process. The major difference is

that the arils of some brands are harder than others which creates the variety in taste. The

arils that are soft when cooked are referred to as ‘butter ackees’ and is said to be tastier,

which is used to make the high cholesterol type due to higher cholesterol level than the

other brand. Although consumers recognize the difference in the quality of the different

brands, most wholesalers and retailers generally believe that ackee is ackee’. It is

therefore with this in mind that Jamaica National strives to provide product with distinct

quality that it has categorized it ackees, namely low-fat and high cholesterol ackees.

PRICE

Pricing was a major consideration in the launch of Jamaica National brand of ackees.

The price of canned ackees is fairly standardized throughout the industry i.e. there is very

little variation in price from one producer to the next for any given brand of ackee.

Typical price at which canned ackees is offered to retailers on the local market is $170 to

$180 per tin and on the international market US$6 - UK£5.00 per tin.

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On the local market, ackee is normally sold in the markets, unprocessed i.e. in pods, at a

lower price ranging from J$20 to J$40.00 per dozen. Ackees are also sold on the wayside

to commuters. Some such townships and parishes engage in this practice are: Ewarton,

Linstead, Bog Walk, and Spanish Town, all in the parish of St. Catherine. This practice

is also common in Clarendon and Westmoreland.

Although ackees were banned from entering the United States market for a number of

years, Jamaica National brand of ackees was always on the United States market via a

Canadian wholesaler who every January ordered a whole shipment and break bulk

thereby selling some via American outlets.

LAUNCHING OF THE PRODUCT

PROMOTIONAL STRATEGIES

In selling canned ackees in the United States, Jamaica National relies on the strategy of

product standardization, push strategy and e-mail. The product is the same everywhere

with no modifications – the label the same, content and specification. Rather than

redesigning labels and containers, Jamaica National has standardized its offering and

maintains that, giving customers in Jamaica (home) and abroad (U.S.A.) the same good,

easily identified in the market place any part in the world.

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The company subscribe to the internet and has set up a web page with its e-mail address

for potential customers. It is to the advantage of the company as it was by way of this

web site that the two customers from the United Kingdom, i.e. Tesco and Safeway were

able to identify the company’s offerings and made their purchase.

Aggressive marketing strategy which is ‘push promotional strategy’ was launched in

New York, Boston, Washington and Florida. In West Indian stores, individuals engaged

in promotional activities were strategically placed i.e. near the counter with the product,

with the prepared product for sampling as a promotional means. This was done on Friday

evenings spanning a period of two weeks. On Friday evenings when most workers were

doing their week-end shopping, small servings of ackee and salt fish with crackers were

given as sample in order to persuade consumers to add the product to their grocery

baskets.

In this exercise Jamaica National made allowance for promotional packages which was

normally two cases of canned ackee and five pounds of salt fish per store. This

particular strategy was used to make consumers aware of the product on the market also

to enlighten individuals who were not already consumers of the product of the offering,

taste and for them to ask questions of interest about the product and make comments.

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This type of marketing strategy was well accepted by the market as feedback provided by

promotional attendants and wholesalers, were quite useful and helped in product analysis,

especially for the two type of ackees. Some feedback received were:

1. Some consumers were not of West Indian origin but said they would start

purchasing the product because they liked the taste – potential consumer.

2. Some mentioned that they preferred the low-cholesterol over the high cholesterol

brand of ackee because of health reasons – helped in production.

3. Some were aware of the product on the market for the first time

4. Helped the wholesaler in stock analysis i.e reorder quantity.

TARGET MARKET/MARKET SEGMENTATION

Market is defined as all persons of West Indian origin inclusive of Cubans who comprise

a large part of the United States market in the age group of 15 to 75 years of age. West

Indians have a natural taste for ackee as that has been a natural part of their diet. Florida,

New York, Boston, and Washington are the states with the greatest Jamaican population

who are consumers of the fruit, ackee.

These areas were specially targeted because of two reasons, namely, Jamaican living in

the United Kingdom who have not decided to return on retirement, normally go to settle

in these areas, especially Florida due to the tropical climate there.

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These retirees commute back and forth between Jamaica and the United Kingdom,

physically transporting the product. This is therefore seen to be a lucrative market for

ackee consumption. Secondly, most of these retirees are pensioners and have a

reasonable disposable income to support their life-style particularly their consumption

pattern.

Next, the West Palm Beach area in Florida is also a farming community that is presently

engage in growing ackees for the United States market thereby competing with the

Jamaican canned ackees. Jamaica National is already being marketed in Florida,

Washington, Boston and the New York areas of the United States for the past six (6)

years, besides the name is well known among the West Indian community.

PLACE

DISTRIBUTION

The only problem experienced over the years was that canned ackees was not displayed

on the shelves of retail outlets in the United States but was sold as under the counter

item in most West Indian stores. However, since January of 2002 canned ackees were

allowed to enter the United States Market and placed on shelves of most chain stores

especially in Florida and New York.

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Jamaica National has been receiving larger orders for canned ackees since the ban has

completely been lifted on July 7, 2002. The cost structure of entering the U. S. market

through Exporting F.O.B. Viking Serenade is:

- 10% Freight

- 15% Customs Tax

- 2 ½ for Port Tax

- 5% for Brokerage and International transport

Distributor’s mark-up = 34% on landed cost or 25% on retail price

Wholesaler mark-up = 12% on landed cost or 10% on retail price.

Supermarkets = 34% on landed cost or 25% in retail price

Grocery stores = 34% on landed cost or 25% in retail price

The exchange rates are:

- US$1.00 = J$49.00

- U.K. £1 = J$78.00

Jamaica National is being distributed through Ridge Company Limited, an independent

distributor in the U.S.A. Ridge Company Limited sells directly to West Indian Stores

and Restaurants in Florida, New York, Boston and Washington. Ridge Company

Limited has ten years experience in distribution, mainly in fresh and processed foods

from the West Indies, Mexico and Cuba.

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Jamaica National ships directly to Ridge Company Limited storage warehouse in New

York and Florida. From there distribution takes place by trucks and trailers to its

retailers. In the eight (8) years of operation, Jamaica National has managed to establish a

fairly widespread distribution network locally.

Jamaica National products is distributed by retail stores throughout Jamaica. Products

are delivered directly to the following outlets:

- Family Food store in Ocho Rios, St. Ann

- Nine (9) branches of Hi Lo Food Stores, i.e. Ocho Rios, Falmouth,

Montego Bay, Mandeville, Santa Cruz, Manor Park, Matilda’s Corner,

New Kingston and Spanish Town.

The company delivers canned ackees to grocery stores throughout the island and sells

directly to overseas consumers vacationing in the island from its premises. Jamaica

National began its export drive of ackees two years after its inception as it could no

longer depend on the local market. Research of the market reveals that there are only

five (5) local ackee competitors of which only three of these are involved in export

activity since January of 2002. This is done on a small scale unlike Jamaica National

that has been on the United States market with its canned ackees since 1996.

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The second brand of ackees which is the low fat is in its growth stage of the product life

cycle and can be referred to a star in the portfolio mix. The cooking oil which the

company manufactures from the extraction of the oil from the arils, is also in the growth

stage of its life cycle both locally and internationally. The cooking oil made from ackee

is quite prominent among the other brands of cooking oil and is projected to increase

sales significantly by the next quarter.

PROMOTION

Jamaica National ackee is promoted mainly through trade fairs and exhibitions, flyers,

and posters distributed in West Indian communities using two marketing representatives

visiting retailers and restaurant operators. At Trade Fairs, the ackee is prepared in several

forms, namely:

- Ackee and salt fish with yam, banana and dumplins

- Ackee and salt fish with roasted breadfruit

- Ackee rolls i.e. ackee rolled in dough, and

- Ackee with hard dough bread

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Free samples are provided and take away orders are prepared and sold to clients. There

are also indigenous Americans with links to people of West Indian/Cuban origin who

have traveled widely and are exposed to the different cultures. This market has

demanded West Indian products and companies like Grace Kennedy has launched

Jamaica Outpost in New York, and Island Grill opening Jerk Centers in Miami with the

aim to cater to this niche market.

POSSIBLE DISTRIBUTORS

At a recent Exposition held in the United Kingdom the Marketing Manager met some

potential distributors who expressed their desire to distribute both high cholesterol and

low-fat canned ackees in some West Indian communities, namely: Birmingham,

Nottingham and Sheffield. He had short-listed a few of them like Tesco and Safeway,

Britain’s two largest food stores. Since the ban was lifted on July 7, two days later

orders for 100 cases each from both Tesco and Safeway were received which were filled.

Canned ackees in the company’s portfolio mix was once classified as Dog due to export

restrictions, but has now become a Cash Cow. Local consumers play an insignificant

part in the consumption of canned ackees because of the availability of the fruit locally.

Purchases of canned ackees is moderate during the months of March to June and

October to December.

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GLOSSARY

Global Marketing Marketing to target markets throughout the world.

Market People or organizations with needs or wants and the ability and willingness to buy.

Product An offering

Product Life Cycle A concept that provides a way to trace then stages of a product’s acceptance, from its introduction (birth) to its decline (death).

Hypoglycin Poisonous gas to be found in ackee which causes vomiting

Supermarket A large departmentalized, self-service retailer that specializes in food and some nonfood items

Wholesaler A merchant’s middleman who sells to other middlemen who are industrial or commercial users.

Mark-up Cost of buying the product from the producer plus amounts for profit and for expenses not otherwise accounted for.

FDA Food and Drug Administration

HACCP Hazard Analysis critical Control Points

Market Segmentation The process of dividing a market into meaningful, relatively similar, and identifiable segments or groups.

Dog In the portfolio matrix, a business unit that has low growth potential and a small market share.

Cash Cow In the portfolio matrix, a business unit that usually generates more cash than is needs to maintain its market share.

Star In the portfolio matrix, a business unit that is a fast-growing market leader

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BIBLIOGRAPHY

McCarthy, E. Jerome et al. (1993). Basic Marketing. A Global-Managerial Approach (11th ed.).

Kotler, Gary et al (1996). Principles of Marketing (7th ed). Prentice-Hall.

Hennessey, Jeannet, et al (2001). Global Marketing Strategies. Mifflin Company, Boston, New York, (5th ed.).

Lamb, Charles; Hair, Joseph; McDaniel, Carl (2000) Marketing (5th ed.). South-Western College Publishing.

Jamaica National is a small privately owned business located at 21 March Pen Road (on

the outskirts of Spanish Town) in the parish of St. Catherine. The company is engaged in

processing canned vegetables for the local and overseas market. Jamaica Pride is a

registered company with a capital of over one million dollars (J$1,000,000) in fixed

assets. The company’s objectives are:

The company has been in operation for eight (8) years and started out processing a line of

vegetables namely Calaloo, and Cho-Cho (Christophenes) and later the fruit Ackee. At

the beginning of the processing operation, the company acquired two machines for the

processes, namely calaloo and Christophenes processing. It later acquired one for ackee

and the most recent for oil extraction. However, cooked canned ackee sales was always

the lowest but since July, 2000 Jamaican Pride ackees has been the leading product due to

the fact that the ban on ackees was lifted allowing entry of the product freely to the

counters of food stores in the United States. All countries, whether large or small, rich or

poor, to some extent trade. All countries within the world are interdependent with some

countries having a comparative advantage in what they produce. The United States is

the largest exporter and importer of goods to the world, therefore it is the main reason

why Jamaica National have targeted that country to market its products.

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