Gallo Rice - Good case for illustrating the differences between mature, new-growth, and emerging-market environments. Case addresses 4P issues in Italy, Argentina, and Poland.
In late spring 1991, as Sig. Cesare Preve was wrestling with the issue of how what strategic moves should form the basis for Gallo's future in Argentina, he decided that an analysis of whether to cut prices to meet local competition would be useful.
Market Situation.
Preve knew that annual retail sales of rice in Argentina were about 140,000 tons, of which 85,000 were branded product. Gallo's planning department had estimated that retail market was well-represented by the following demand formula:
Q = 95,000 +65 I - 100,000 P
where
I = (average income in $ per household) = $3,000
and
P = (average market price per kg for parboiled rice) = $1.50
They did not estimate the standard error of this estimate, but believed it would be rather small. This formula also described the behavior of the......
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