Mangia.itMangia.itThe Growing Use of E-Business in The Growing Use of E-Business in

the Italian Food Sectorthe Italian Food Sector

Michelle Aspis, UNISG, November 2010Michelle Aspis, UNISG, November 2010

Internet EvolutionInternet EvolutionConcept of online communication born in the Concept of online communication born in the 1960s, used by the military as a closed and 1960s, used by the military as a closed and protected network.protected network.

1990s: Internet opened to the public space, 1990s: Internet opened to the public space, forever changing ways of communication in forever changing ways of communication in modern society.modern society.

2009: At least 1/4 of world’s population actively 2009: At least 1/4 of world’s population actively uses the internet for communication, networking, uses the internet for communication, networking, acquisition of information, and business.acquisition of information, and business.

Internationalization of Internationalization of Italian Food CultureItalian Food Culture

Main Points of Interest:Main Points of Interest:

Italy is already recognized by food lovers as a Mecca for quality Italy is already recognized by food lovers as a Mecca for quality foods and artisan products.foods and artisan products.

Though Italy has maintained a reputation for its food, it is often Though Italy has maintained a reputation for its food, it is often criticized for its inability to progress and shape its business criticized for its inability to progress and shape its business strategies to mold with the modern world.strategies to mold with the modern world.

How can small and medium sized producers expand their How can small and medium sized producers expand their clientele economically without sacrificing the quality of their clientele economically without sacrificing the quality of their products?products?

How can these smaller companies reach an international niche How can these smaller companies reach an international niche market in a sector so heavily monopolized by multinational market in a sector so heavily monopolized by multinational corporations?corporations?

Answer: Expand Company OnlineAnswer: Expand Company Online

E-BusinessE-BusinessThe astronomical growth of internet use in the modern world founded The astronomical growth of internet use in the modern world founded substantial possibilities for new marketing strategies and sales for substantial possibilities for new marketing strategies and sales for multiple industriesmultiple industries

Increased Visibility : Strengthening Brand ReputationIncreased Visibility : Strengthening Brand Reputation

Online Sales : More opportunity to sell products to non-local consumers.Online Sales : More opportunity to sell products to non-local consumers.

Accessibility to niche markets, creating new marketsAccessibility to niche markets, creating new markets

While other industries have found extreme success capitalizing on E-While other industries have found extreme success capitalizing on E-business strategies, the Food and Beverage sector’s participation in this business strategies, the Food and Beverage sector’s participation in this innovation has been less represented, but is quickly growing.innovation has been less represented, but is quickly growing.

Only 5% of European Food companies sell their products online, while Only 5% of European Food companies sell their products online, while 16% of other industries have made their products available for sale 16% of other industries have made their products available for sale online.online.

Most Prominent International E-Most Prominent International E-MarketplacesMarketplaces

* Credit:* Credit: “Food and Beverage Report” e-market services. Galacci 2005

International E-Market in International E-Market in the Food and Beverage the Food and Beverage

SectorSector

* Credit:* Credit: “Food and Beverage Report” e-market services. Galacci 2005

*Credit Benzi, Maurizio. "E-commerce in Italia 2009: Un'opportunità Dalla Crisi.

Ferrarini S.p.A. Ferrarini S.p.A. Founded in 1956 as a producer of traditional Italian specialties of Founded in 1956 as a producer of traditional Italian specialties of Emilia-Romagna in Rivalta (RE), Italy. Emilia-Romagna in Rivalta (RE), Italy.

Successfully established brand with Prosciutto Cotto (as well as Successfully established brand with Prosciutto Cotto (as well as Parmigiano Reggiano, Prosciutto di Parma, and Aceto Balsamico Parmigiano Reggiano, Prosciutto di Parma, and Aceto Balsamico tradizionale) in Italian market. tradizionale) in Italian market.

Decided to expand and develop an online presence in 2009 to Decided to expand and develop an online presence in 2009 to reach new consumer markets in the UK and Northern Europe.reach new consumer markets in the UK and Northern Europe.

Online Projects: Company Website, E-Shop, Online Projects: Company Website, E-Shop, I Sapori della Nostra I Sapori della Nostra TerraTerra Community, Facebook Pages. Community, Facebook Pages.

Faces challenges in conceptualizing virtual marketing campaigns, Faces challenges in conceptualizing virtual marketing campaigns, strategies to increase visibility, establish international brand strategies to increase visibility, establish international brand reputation.reputation.

Advantages of E-Commerce Advantages of E-Commerce

Increased VisibilityIncreased Visibility

Low-Cost, High Volume Marketing (Increased Opportunities for Low-Cost, High Volume Marketing (Increased Opportunities for small/medium sized businesses)small/medium sized businesses)

Direct Communication with ConsumersDirect Communication with Consumers

Better Customer ServiceBetter Customer Service

Increased Potential Consumer MarketIncreased Potential Consumer Market

Possibility for Companies to Conduct Direct Sales Rather than Possibility for Companies to Conduct Direct Sales Rather than Relying Upon 3rd Party Distributors (Increased Profit Margin).Relying Upon 3rd Party Distributors (Increased Profit Margin).

Less Rigid Approach to Branding/Product Marketing CampaignsLess Rigid Approach to Branding/Product Marketing Campaigns

Limitations with E-Commerce Limitations with E-Commerce for Food Sectorfor Food Sector

Governmental: Limitations on import/export laws outside of Europe for Governmental: Limitations on import/export laws outside of Europe for comestible products. (USA=Strict FDA Laws)comestible products. (USA=Strict FDA Laws)

Cultural: Consumers feel more comfortable purchasing food items from Cultural: Consumers feel more comfortable purchasing food items from the supermarket. Niche market created online for specialty items to the supermarket. Niche market created online for specialty items to justify not making these purchases in-store.justify not making these purchases in-store.

Trust: From any online store, consumers may feel uncomfortable Trust: From any online store, consumers may feel uncomfortable sharing their personal credit card information. Need assurance of sharing their personal credit card information. Need assurance of credibility from company.credibility from company.

Health/Safety: Consumer concern when buying edible products online Health/Safety: Consumer concern when buying edible products online that these products will arrive fresh and safe to eat at their homes. that these products will arrive fresh and safe to eat at their homes. Need to establish trust in company to produce clean and safe products. Need to establish trust in company to produce clean and safe products.

Specialty foods/non perishable items are more easily sold online than fresh Specialty foods/non perishable items are more easily sold online than fresh items.items.

*Credit:*Credit:eBusiness Applications in the European Food & Beverages Industry: Managerial & Economic Implications. Vlachos

Ways to Increase Ways to Increase VisibilityVisibility

Social Media Networks: Facebook, TwitterSocial Media Networks: Facebook, Twitter

Internet Meta-Search Programs: Stumbleupon, GoogleInternet Meta-Search Programs: Stumbleupon, Google

Google Adwords: Paid-Service using selected keywords to Google Adwords: Paid-Service using selected keywords to direct interested market to the advertised product.direct interested market to the advertised product.

Company website: Promotions, ContestsCompany website: Promotions, Contests

Blog: Company Blog about particular products/recipes, Blog: Company Blog about particular products/recipes, generates interest and also creates a more individual cxn generates interest and also creates a more individual cxn with consumers.with consumers.

Sister websites that link to e-shop (Ferrarini--> I Sapori della Sister websites that link to e-shop (Ferrarini--> I Sapori della Nostra Terra)Nostra Terra)

Influence of Social Influence of Social MediaMedia

Key in remaining relevant online, requires constant updates, a Key in remaining relevant online, requires constant updates, a continuous process, central to innovative strategic marketingcontinuous process, central to innovative strategic marketing

Twitter: Immediate Promotional Updates, Info about new Twitter: Immediate Promotional Updates, Info about new productsproducts

FacebookFacebook

Company directly in touch with personal lives of consumers.Company directly in touch with personal lives of consumers.

Direct communication with target marketDirect communication with target market

Promotional UpdatesPromotional Updates

Gives ‘personality’ to particular productsGives ‘personality’ to particular products

I Sapori Della Nostra TerraI Sapori Della Nostra Terra

User Centered Online Forum for Italian Food Specialties.User Centered Online Forum for Italian Food Specialties.

Wikipedia-type format, users are encouraged to share Wikipedia-type format, users are encouraged to share photos, recipes, restaurants and even add new items.photos, recipes, restaurants and even add new items.

““Trip Advisor” type feature, using google maps to plan Trip Advisor” type feature, using google maps to plan enogastronomic trips all over Italy.enogastronomic trips all over Italy.

Sponsored by Ferrarini, but company does not profit Sponsored by Ferrarini, but company does not profit from site. from site.

Ferrarini’s products are featured, but artisan producers Ferrarini’s products are featured, but artisan producers are encouraged to put their products into the website’s are encouraged to put their products into the website’s database. database.

Purpose of Sapori Site Purpose of Sapori Site

Marketing Tool: Indirect promotion of Ferrarini’s ProductsMarketing Tool: Indirect promotion of Ferrarini’s Products

Direct communication with consumersDirect communication with consumers

Obtain information about innovative products, and learn Obtain information about innovative products, and learn from consumer comments.from consumer comments.

Link to E-ShopLink to E-Shop

Generate Interest in Italian Specialty Foods: Enter new Generate Interest in Italian Specialty Foods: Enter new market.market.

Establish sense of community, emotional connection Establish sense of community, emotional connection with products.with products.

E-Shop Usability E-Shop Usability Visually AppealingVisually Appealing

Easy to Navigate: OrganizationEasy to Navigate: Organization

FAQFAQ

Legal Notice: Assurance of Safety of User InfoLegal Notice: Assurance of Safety of User Info

Registration RequiredRegistration Required

Product Information Key: Production Process, etc.Product Information Key: Production Process, etc.

Extras: Wine/Food Pairings, Recipes, Party IdeasExtras: Wine/Food Pairings, Recipes, Party Ideas

Company Contact InfoCompany Contact Info

Shipping DetailsShipping Details

`̀

Target: International Consumer who cannot easily find these Target: International Consumer who cannot easily find these products in his area: Site in English & Italian.products in his area: Site in English & Italian.

Hope to expand to UK and Northern Europe.Hope to expand to UK and Northern Europe.

Still in Beta phaseStill in Beta phase

Front Page: Featured Products, List of available items Front Page: Featured Products, List of available items catagorized by typecatagorized by type

Links to Sapori & Ferrarini Company WebsitesLinks to Sapori & Ferrarini Company Websites

Payment Methods: Visa, PostaPay, MastercardPayment Methods: Visa, PostaPay, Mastercard

Site organized in a way that assures quality/safety to Site organized in a way that assures quality/safety to consumersconsumers

ConclusionsConclusionsSuccess of e-marketing is a mutual effort from company & Success of e-marketing is a mutual effort from company & consumer: Establishment of relationship.consumer: Establishment of relationship.

Challenging and continuously changing form of marketingChallenging and continuously changing form of marketing

More limitations for Food/Beverage sector but nonetheless useful More limitations for Food/Beverage sector but nonetheless useful for expanding visibility and developing brand reputation using new for expanding visibility and developing brand reputation using new marketing strategiesmarketing strategies

^ Site Traffic=Potential ^ in Brand recognition and acquisition of ^ Site Traffic=Potential ^ in Brand recognition and acquisition of new clientelenew clientele

Requires commitment and constant updatesRequires commitment and constant updates

Ideal for small and medium sized businesses who wish to increase Ideal for small and medium sized businesses who wish to increase sales in various markets (national/international)sales in various markets (national/international)

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World. Greece, Crete. 3 Sept. 2009. Web.

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http://www.suite101.com/content/how-to-run-successful-online-marketing-campaigns-a118689>.

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2010. <http://www.streetdirectory.com/travel_guide/124349/world_wide_web/shopping_online_in_italy_a_growing_sector.html>.

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Innovation in Food Networks. Austria, Innsbruck-Igls. 22 Feb. 2008. Lecture.

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http://www.fda.gov/Food/InternationalActivities/Imports>.

Gallacci, Letizia. Food and Beverage Report. Industry Review. Milan, Italy: E Market Services, 2005. Print.

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Vlachos, I. P. "E-Business Applications in the European Food & Beverages Industry: Managerial & Economic Implications." Thesis. Agricultural University of Athens. Print.