Arcor Essay

686 Words3 Pages
Arcor pricing strategy was based on pricing its product equal to or slightly below competitor’s prices. Arcor offered affordable products with mass appeal. Arcor purposefully avoided high priced and niche products. Arcor offered a myriad of products in every confectionery category. Arcor typically opened business in the interior of Argentina and slowly moved out to bigger cities. This strategy was different than most other Argentinean companies. Arcor was experiencing high costs of necessary ingredients. In an attempt to reduce these costs, Arcor purchased farmland and built its own processing facilities. They produced sugar cane, milked cows and extracted fructose and glucose from its corn and sorghum. Arcor also supplies its own electricity and packaging materials. Another key advantage was Arcor’s efficiency. They focused on producing high volumes and utilizing in house suppliers to keep their operational costs lower than the competition. Arcor was always investing in new equipment and technology. These efficiencies gave Arcor an edge to react quickly to an increase in demand. Arcor established exclusive third party distributors, such as wholesalers and supermarkets. Arcor viewed distributors as salespeople, promoters and deliverers. Arcor believed the distributors were an integral part of the business and built strong relationships with them. Arcor invested a significant amount of money educating the distributors on storage, pricing, distribution and delivery. Arcor’s investment in training was significantly higher than its competitors. Arcor believed one of their strengths was educating distributors and this allowed them to be a major player. Distribution was similar in Argentina and Latin America whereas distributors stocked other products, but not those that were in direct competition with Arcor. However, in the United States, Arcor

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