Poland

Country Market Analysis

Demographics Gender

Women make up 51.4% of population, mostly in cities Average age of man: 33 years old Average age of woman 37 years old

Age Half of people in Poland under age 33. One third

under 19 Youth

Consumption oriented Brand label aware

Elders Traditional Prefer known and tested products

Income Average household income low: Poles that make

between $125-$250/mo is 78.7%

Geographic Poland’s total population is 38.7

million Largest city is Warsaw with

population of 1.6 million Next two largest cities are Lodz and

Krakow Unemployment is 17.8% Urban

More likely to spend money

Rural Have higher unemployment Man to Woman ratio more balanced

Product Size

Bottle size of competitor’s soda (Coke) is .33L~11 oz. Consume beverages in smaller sizes Size of refrigerator only 1.8 meters

Labeling It is required by law to have product description

somewhere on or inside the package. Must clearly state country of manufacturer

Name and address of producer Composition/Ingredients Net weight of contents Durability/Storage instructions

Product Nutritional value is required and must follow Polish standards

Energy value and proportion of nutrients must be in units per 100 grams or 100 milliliters.

Information on vitamins and minerals must be as a percentage of recommended daily allowance

Many women are on “diets” Coke is referred to as Coca-Cola Lite

Metric system used Prefer simple, self explanatory labels

Poles are impressed with quality of packaging when labels are thick and strong

Traditional labels are “stiff”

Product Companies have found that using English on packaging helps

give product additional prestige or value Language

Official language is Polish (98.7%) Packaging

Required to take measure in using recyclable materials Coke uses glass bottles with metal caps, while Hortex uses

plastic bottles with screw on caps Additives

Label must declare either aroma, natural, artificial or any combination

Same additive regulations as other EU countries, but can declare new additives. For example, neotame, a sweetener used only in Poland

Product

Color Black tea preferred. Coloring of teas is usually

dark Flavor

Ceylon, a blended tea is found to be most popular in the tea market

Tea drinkers are developing tastes for green and fruit teas, as well as spice imperial, ginger, and almond

Product Competition

Brands: There is much competition from local production and

exporters from the EU countries. They tend to prefer Polish products to imported goods.

Coke, PepsiCo, Tetley, Posti, and Dilmah (account for 70% of teabag market)

Private label products available at hypermarkets and supermarkets

50 brands of tea in the Polish market Other competing beverages

Black tea is the most popular hot tea: Assam Best, English Breakfast, Darjeeling First

Flush, Earl Grey Coffee is the most developed area of the hot drink

market with Kraft, Tchibo, Nestle, Sara Lee, and Elite Group

Hellena is one of the top soda and juice competitors Hortex is the leading fruit juice producer which is

recognized by 97% of population

Price Retail Price Polish currency is Zloty. Now after

joining EU, they have adopted the Euro Pricing is key to effective selling of a

U.S. product in Poland Flexible pricing in order to obtain

market penetration and gain product knowledge

Commercial Service in Warsaw says a common complaint is that U.S. prices are too high

Price more significant for women, people with secondary educations, rural consumers, and blue collar workers

Polish teas sell for about $6 for 200grams (8 oz box).

Price Young Poles in cities are less price sensitive

than older generations and rural Poles Urban areas have higher purchasing power

and are more willing to spend on consumer goods

Money Poland is a cash economy with little or no

credit access or checking accounts Can take 2-4 weeks to collect money on a

sale, so cash management services can make significant difference in business profitability

Placement Unilever in Poland

Products that are currently in Poland Domestos: household bleach Hellmann’s: #1 mayonnaise brand worldwide Dove: skin and beauty product Sunsilk: shampoo Cif: household cleaner Rama: margarine Knorr: food spices, bouillons, etc.

Parallels Polish lifestyle and how tea is incorporated

Tea houses similar to U.S. coffee houses (Starbucks) Tea viewed as a chance to break from daily routine of

life

Placement

Storage and Distribution Retail and wholesale market fragmented with

thousands of small companies. While they dominate the market, they have less than $1 million annual sales. Difficult to distribute to such a large amount of small companies.

45% Poles shop in small stores. Hypermarkets are on the rise, but still some customer resistance due to their large size.

Distributors manage entire logistics process from warehousing and transportation, in addition to dealing with retailers.

Placement Logistics Providers in Poland

ProLogis World’s largest developer and leaser of logistics facilities Located in central Poland, work for Unilever Created ProLogis Park Protrkow which is a large

distribution center for Unilever in Poland

Unilever Bestfoods Located in London, UK Leading suppliers of fast moving consumer goods They selected Power Europe to develop and manage a

new automated national distribution center at Kingswood Lakeside in Cannock, Staffordshire, which will handle Unilever’s Bestfood distribution requirements

Ready for distribution in September 2005

Placement Tibbett and Britten Group

International logistics specialist working under long-term contracts with retailers and manufacturers, especially in the food and beverage industry

Currently under contract with Unilever Maersk Logistics

State-of-the-art warehousing and distribution center in Mszczonow

Operates in more than 70 countries

Production Facilities in Poland Products in Europe:

Bydgoszcz- Responsible for home and personal care products in Europe

Kotowice- Responsible for Unilever Bestfoods in Europe

Placement

Transportation Road System

50% of roads are considered unsatisfactory and need immediate upgrading and 35% are poor

Weakest aspect of Poland’s infrastructure and a major handicap to business in economic development

Lack of adequate highways between major cities Rural roads are dangerous and difficult to travel on Toll Roads are being created in an effort to help the

current road system Possible product logistics company, Ryder System,

Inc. which provides logistics and transportation solutions in Poland

Placement Railways

Polish State Railways (PKP) High quality and interconnect with neighboring cities

such as Vienna, Prague, and Berlin. However they need substantial restructuring

For the future a mix of both railways and road ways are considered best prospect of growth for Poland

Warsaw relies on metro system Quantity Amounts

Poles buy in small amounts until know and trust product

Wait to see how product sells and if favorable then consumers will purchase in bigger bulk

Placement Channels of Distribution

Shipped from manufacturers to warehouses via air and seaport then shipped via roads or railways to local groceries or other means of sales

Traditional grocers are the largest and most popular retailers

Joint Ventures Very abundant in Poland In a typical joint venture, American companies

contribute capital and technology, while Polish companies contribute land, distribution channels, trained workers, and legal and business knowledge

Promotion Media Availability

Poland is very literate and college attendance continues to increase,

Print advertising has become a popular media source

Advertisements need to be translated into Polish since it is the primary language

TV Television is the largest broadcasting network in

Eastern and Central Europe Is most expensive media for advertising, but most

effective means of advertising

Promotion TV

Most important source of information for Poles Products advertised via TV show the greatest sales

growth of all advertised products because the average Pole watches 4 hours of TV a day

Rates for 30 second slot during peek hours, 7:45 to 10 pm of top three competing channels:

TVP1 and TVP2 are state owned most watched television=$15,533

Polstat= $14,448 (both have nearly 100% market penetration)

UPC Telewizja Kablowa is leader in cable channels Cable not effective since less than 30% of Poles

have it Downside: limit to total ad time because only 15% of

commercial air time is allowed for advertising

Promotion Newspapers

Very well circulated throughout Poland—newspapers can be found everywhere

Low readership: fewer than 30% of Poles read any kind of newspaper—this rate is declining

Advertising cost for popular daily newspaper (1 page b/w)=$14,682

Cinema Roughly 28 million cinema attendances per year. Cost for 60 second time slot per screen per week= $265

Magazines Hard to predict sales levels because majority of

periodical sales occur at kiosk stands, with subscriptions representing less than 4 % of total sales

Promotion Magazines

Many special interest magazines, business journals, niche publications, and specialized newspapers, which is good for reaching target market since there is fragmentation of the market

Advertising cost for monthly magazines (1 page, color)=$12,399

Outdoor Advertising Frequently used on buses, trains, and subway and metro

platforms Outdoor advertising costs:

5 X 2 ½ meter panel= $200 12 X 3 meter panel= $2,000

Personal Selling Direct Marketing

Direct marketing in Polish countries has grown to 38% Each Pole receives 10-12 items per year of promo/ad mail Very expensive: average cost is $28,310

Promotion Direct Marketing

P&G tested direct marketing by sending out shampoo samples to Poles. Received very positively and P&G’s sales increased

Event Sponsorship Soccer is a popular sport in Poland with many

sponsors at the tournaments Lipton currently sponsors tennis tournaments in other

countries Personal Selling- sampling the product

Many Poles will not consider final purchase until meeting face to face

Demonstration very effective Samples of coffee and other beverages being passed

out in hypermarkets throughout urban areas of Poland

The End

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