Product Mix

A Product Mix Rooted in History and Culture

Developing an appropriate product mix is key to Gallardo's achieving its growth ambitions and to successfully move to sell and market its products south of the border in Mexico. We know for certain that people in Mexico still place flavor above convenience, so developing products that are only convenient would lead to certain failure for Gallardo's in Mexico. To date, the company has achieved its success by offering a product mix that includes sauces, seasonings and salsas that were aligned with its Tex-Mex restaurant flavors. Though this mix helped the company earn significant market share in major areas of the United States, modifying this mix will be key to helping it achieve similar success, and what Eric Meyer, CEO of Gallardo's Salsa and Sauces, would consider a "win," in Mexico. And, more importantly, for Gallardo's to differentiate itself from California brands, its main competitor in the Mexico.

Gallardos must include the main staples of Mexican flavors into its products. These include: chilies, beans, tomatoes, fruit and a variety of spices. But in order to revise its product mix for Mexican markets, Gallardo's needs to take a variety of key issues into consideration. Several of these have already been researched at length by Gallardo's management team, such as special demographic characteristics, relevant emotional, psychological and functional needs related to cooking--particularly the enjoyment of the whole cooking process and its role as an outlet to express and receive familial love and affection by Mexican women--and the special role cooking aids can play in creating enhanced flavors and dishes.

Maintaining its three main product categories, which include salsas, sauces and seasonings, will be adequate for the Mexican market as well. And since barriers to entry in the sauce industry are low, given the consistent nature of the equipment and labor required to develop, manufacture and distribute the product, Gallardo's can easily utilize its equipment to manufacture other varieties of sauces, salsas and seasonings. The expanded product mix that we would recommend Gallardo's to research and develop would remain aligned with its current product attributes, usage experience requirements and defined jobs to me done. The company should, however, rework its Mexican product mix by:

1 - considering competition beyond the California brand,

2 - incorporating local and regional food and flavor preferences,

3 - considering diverse ways to expand the product line,

4 - ensuring the cook a "connection" to the meal preparation process.

These four basic issues will set Gallardo's on a path to successful product development and to achieving it goals in Mexico.

First, let's consider competition beyond what Gallardo's sees as its main competitor: the California brand. Since some of Gallardo's key, regional competitors are small manufacturers it makes definite sense to think about the full scope of the varying products with which the company is competing. Given the ethnocentric nature of the Mexican people, and their preference for local, regional flavors, Gallardo's should use this as a cue in developing its product mix. By basing its Mexican offerings around the "Flavors of Mexico," Gallardo's will create products that can compete with local manufacturers.

Given that Mexico has gastronomic influences from around the world, the differences are significant from the major urban areas to the small, rural villages. Also, the country is comprised of many states that greatly differ in its northern, central and southern areas, often varying significantly in ethnic heritage and influence. And this has deeply affected food and food preparation in the different regions. Some stand out for their unique regional flavors, such as Chiapas, Chihuahua, Oaxaca, Pueblo, Sonora, Veracruz and Yucatan. We propose that Gallardo's base its product mix on these regional differences.

By choosing five or six regions as its product inspiration, Gallardo's can create a very interesting and competitive product line. Through research of regional, traditional foods, textures, spices, and flavors, including the range of dishes cooked, including main meal entrees and sides, using poultry, meat, fish, rice, beans and vegetables, as well as snacks or light meals such as tacos, empanadas, enchiladas, tamales, and even desserts, Gallardo's can create offerings that only local or regional companies currently manufacture. For example, Salsa de Veracruzana, Serrano Chile Sauce, Chiapas Mole Sauce, Salsa de Sonorese and Salsa of the Yucatan will imply expected flavor differences that will be of interest to a multitude of Mexican markets.

This multi-regional product mix can be