Gallo Rice Case Writeup
... F&P Gruppo was one of few companies in the world involved in the entire process of producing rice products, from growing and milling to packaging and marketing. The company expands many of its resources in the research and development of new and improved strains of high quality rice and holds a proprietary on manufacturing processes and packaging. ... It acquires market information based on their one focus strategy, and utilizes this to forecast rice market trends to prepare for any upcoming needs and problems. ... This resulted in Gallo-milled rice, which consistently earned the highest of six quality grades. Success through brand name advertisement: Gallo used their brand name and trademark rooster across geographic markets and product line to raise awareness of Gallo products. The Gallo market originally consisted of white rice, parboiled rice, and brown rice. Gallo introduced branded dehydrated, quick-cooking rice and dehydrated mixes into their developed markets. These branded products gave the company 50 times the profit margin of the same quantity of white rice. ... Italy Gallo had acquired 21% of the Italian retail rice volume in 1991. Gallo offered 3 product lines. Riso Gran Gallo, Blond line of parboiled rice, and Grandi Risi del Mondo. Riso Gran Gallo accounted 64. ... Blond line of parboiled rice accounted 34. ... In 1991, Gallo was carried in stores accounting for 80% of Italian grocery sales, more than any other brand. A typical supermarket carried two of Gallos white rice varieties and three of the four parboiled items. ... Consumers perceived MetaTempo to be superior to simple parboiled rice. ... Therefore, Gallo anticipated that launching a new product will help Gallo to smooth transition from existing or diminishing increase returns to scale of Gallos rice product to a new product lines, and thus expanded its market share. Argentina Sales of Gallo branded rice in Argentine was $30 million between April 1991 to March 1992.