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INDEX
Introductionpage 3

Productpage 4

a. Presentation..page 4
b. Packing...page 5
c. Uses of the product.page 6
d. Product process...page 6
e. Supply chain.page 7
f. Distribution channels in Mexico..page 7
g. Why going international?...............................................................page 8
h. International sales pricepage 8
i. Harmonized tariff system..page 9
Market.page 10

Market risks......page 11

Trade barrier (legal and factors)..page 12

a. Customs barriers.page 12
b. Non customs barriers page 13

Offer (environmental and human factors).page 14

a. Direct competitionpage 14
b. Indirect competition page 15

Demand (environmental and human factors)page 15

a. Consumer description.page 15

Distribution channels...page
16

Transport............page 17

Linguistic Factors........page 18

Political Factors........page 18

Reciprocity..page 19

Conclusion..page 20

References..page 21

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Mole Oaxaqueo

INTRODUCTION

Since the beginning of years the humanity has been trying to make the most
delicious plates, capable to take the palate into new places, where the flavors, the
mixes and even the smells became the main factors to reach this goal. Mexico is
not the exception to this rule, indeed Mexican cuisine owns one the most delightful
meals, product of a mixture of chilies, nuts, seeds and vegetables, known as
"Mole".

The "Mole" is originated in the southern region of Mxico, especially in the states of
Oaxaca, Puebla and Tlaxcala, it is the result of the blend of Spanish and Aztecan
culture and there are many varieties of it, being the mole poblano and the mole
negro from Oaxaca the most famous versions. To make it is quite complicated
because of all of the processes that the ingredients have to pass through, such as
the roasted, the fried and the grind, thanks to this multiple processes the mole
acquires a unique flavor that goes from sweet, to nutty, and to bitter, making this a
very unique meal that represents the old and the new flavors of Mexico.

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PRODUCT

3 different kinds of Handmade Oaxacan mole (negro, coloradito and rojo) whose
flavors and smells brings the authentic Mexican cuisine to your mouth. All this
moles are labeled under the brand Mole Juquilita.

a) Presentation

Mole negro: The most complex of all moles because of its 34 ingredients, it is a
mix of 6 different types of chilies, vegetables, nuts and other ingredients like
chocolate or roasted bread, all this mix give to the mole a very artisan flavor that
goes from sweet to spicy.

Mole rojo: The spiciest one, made with the exactly same ingredients as the mole
negro, with the difference that the chilies are less roasted giving it its characteristic
red color.

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Mole coloradito: It has a red burnt color and a strong smell, it is made with
chicostle chili and a mix of other different chilies and spices.

a. Packing

All of our products will be sold in 500 grs. octagonal glass containers that
represents the 8 regions of the state of Oaxaca, this glass container includes 2
types of labels, the one that help the costumer to identify which kind of mole is
being sold and the one where our customers and partners can find the nutritional
information, the ingredients and a short story about our brand legacy.

(This packing is a proposal and will be only available for international markets,
since the packing for Mexico is different)

b. Uses of the product

The three versions of Mole Juquilita can be used in the following ways:

As a whole meal accompanied with chicken and rice.

As a dip-in sauce.
As an ingredient for other Mexican dishes.

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c.

c. Product process

In order to create one of our moles we have to follow a process, this process
includes all steps into the preparation of our products, it is important to emphasize
that making a mole is not something easy to accomplish, thanks to all of the
ingredients that composes it and the special treatment they have to receive. In
some many ways we can say that making mole its more like a ritual than a cooking
experience.

This part could be difficult since not all the ingredients are available the whole year, so its
important to have a backup and a good provider, also the cost of many ingredients tend to vary
GET THE during some seasons of the year.
INGREDIENTS

Once we have the ingredients its time to roast the chilies, the nuts, the bread and the seeds, then
ROAST THE we proceed to open the chilies to remove the stem and the veins, and finally we immerse the
CHILLIES AND chilies under water.
THE NUTS

The next step it's to grind all the roasted ingredients in order to create a very dense sauce, with a
GRIND ALL very spicy flavor.
THE ROASTED
INGEDIENTS

Once we have our sauce, its time to put it in a big pan over low heat, in this part of the process
we add chicken soup, oaxaquean chocolate, tomatoes, garlic, onions, aromatic herbs, and all the
FRIED THIS rest of the ingredients. We let it boil till it acquires its characteristic flavor and texture.
MIXTURE

Once our mole is done, we put it into the glass containers that fits 500 grs. And then wit put the
FILL THE labels on it.
CONTAINERS
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d. Supply chain

The supply chain of Mole Juquilita has 5 import parts of the process, the first
one is to obtain all the ingredients that are necessary to make mole, since mole
has a lot of ingredients this part of the process can be difficult.
The second one is to transform all those ingredients into our 3 types of mole
Once our mole is made we put it into glass containers that fit exactly 500g. Then
we proceed to the vacuum sealed and at the end we put the label.
Now our product is ready to be sold, so we proceed to send it to our points of
sales, in this case our international point of sales will be the stores and the
restaurants that we have an alliance with.
The end of the process happens when a consumer buys the product for his or her
personal use.

e. Distribution channels in Mexico

Obtaining
Labeling and Sale to the
the Elaboration Distribution
packaging of final
ingredients of mole to POS
the product consumer
Currently our products are only available in 1 one distribution channel, which is the
physical store, we have 2 stores, one located in Oaxaca, Mexico and another in
Los Angeles, California.

Its important to emphasize that in both countries, our target market its almost the
same, but with the difference that in the USA the target market buys our products
thanks to the nostalgic felling they have about Mexico.

f. Why going international

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Going international for a company is a great opportunity for the business

to grow, and to increase brand awareness in the world, is a great way to
find new markets that our product can easily satisfy and also we can contribute to
the growth of the country.

According to the economist A Small businesses that decide to export, has a

growth of up to 20% and the probability of failure is 9% lower compared with
companies that do not. I consider that as we enter the international market is an
effective measure to achieve the expansion of our company. We can offer our
products in a larger and of course we can increase our portfolio of customers and
revenue.

g. International sales price

All of our moles will be sold in 7.49 euros, this prices include taxes and the
production and shipment cost.

Mole Negro Juquilita 500 grs. 7,49

Mole Rojo Juquilita 500 grs. 7,49
Mole Coloradito Juquilita 500 grs. 7,49

h. Harmonized tariff system

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The tariff treatment provided by Mexico for mole is a tariff of 20% for the
import of mole to Mexican territory, to export mole beyond Mexican
territory there is no tariff and its excluded of the IVA payment.

Section IV Products of the food

industries;
Beverages, alcoholic
drinks and vinegar;
Tobacco and
manufactured
tobacco substitutes
Chapter 21 Diverse Food
Preparations
Departure 2103 Preparations for
sauces, condiments
and seasonings.
Subheading 210390 Others
Fraction 21039099 Others
Rest of the territory Border Region
UM: Kg Tariff IVA Tariff IVA Tariff IVA
Import 20 Ex.* Note border Note border Ex.*
Export Ex. 0% 0%

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MARKET

Germany is a great place to sell Mexican products in Europe, since the second
largest Mexican community in the continent is located there, there are proximally
15,000 Mexicans living there, especially in cities like Berlin, Baviera, and North
Renania, they represent a big market opportunity that we can take advantage of.
Recently the expansion and appearance of Mexican stores has proliferated, both in
online and physical formats in all over German territory.

As we know the Mexican consumer is a very nostalgic kind of client being the food
the thing that they miss the most about their country, the mole is one of the most
representative Mexican meals that is well known for almost every Mexican, so
thats why we consider that our product have a good opportunity in German
territory, beside in recent years the mole has become into a gourmet meal that is
winning a big territory referring to global consumers awareness, which opens new
business possibilities that not only apply to Mexicans but also to gourmet
consumers who cares not only about the flavor of the food, but also about its
history and tradition.

Also the modernization of the Free Trade Agreement between Mexico and the EU
represents security to all the investments made in the continent. Currently the 80%
of Mexican exportations to Europe goes to Germany which means that Mexican
products are well accepted in that country, this percentage is expected to increase
because of the new negotiations of the agreement.

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MARKET RISKS

Like in all commercial decisions, there are some risks about selling our product in a
foreign market. To face this risks and analyze them in a very detailed manner can
be a determining factor in the success of Mole Juquilitas products.

The risks that we can have when selling our products in Germany are the following:

Economic risk: This risk is mainly due to the economic loss that the
company can have when doing business in a foreign currency, it will be
originated if Mexican or German currency have gained value against other
countries currencies, which means that our profits can increase or decrease
in a way that is out of our control. Also this risk includes the variability that
the demand and the sales could have if any of the 2 countries involved in
the transaction pass through an economic crisis.

Commercial risk: This risk is due to the possibility that the needs and
desires of German Market would change, which will means loss sales and
the necessity to re adapt our product to the new German market.

Transport risk: During the transport of the merchandise delays may occur,
products may be damaged, stolen or lost in the transport, all this things may
cause new costs and damage the brand image.

TRADE BARRIERS

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a) Customs barriers

Being that Germany is part of the European Union since 1993 its international
commerce is ruled by the European Unions Import Trade Regime, this regime
situates mole under the code 2103909010, in the section IV of prepared foodstuffs,
miscellaneous edible preparations, sauces and preparations, containing tomato.

Under this Trade Regime we will have to pay a third country duty of 7.70% of the
total value of our merchandise, and a 7% additional for the charge of VAT.

b) Non customs barriers

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Also the European Unions Import Trade Regime includes some barriers,
besides the customs barriers. If in any case our products do not fully
accomplish this requirements the entrance of our products to German market will
be denied.

Control of contaminants in foodstuffs: In order to ensure a high level of

consumer protection, imports into the European Union (EU) of foodstuffs
should comply with EU legislation designed to ensure that food placed on
the market is safe to eat and does not contain contaminants at levels which
could threaten human health. Some of the contaminants that are not
allowed to entry into European market in certain levels are nitrate,
mycotoxins, heavy metals, dioxins, PAHs and oils and fats.

Health control of foodstuffs of non-animal origin: Imports of foodstuffs

of non-animal origin into the European Union (EU) must comply with
general conditions and specific provisions designed to prevent risk to public
health and protect consumers' interests. All of our products must comply
with General foodstuffs hygiene rules according to Regulation of the
European Parliament and of the Council, general conditions concerning
contaminants in food, and general conditions of preparation of foodstuffs.

Labelling for foodstuffs: All foodstuffs marketed in the European Union

(EU) must comply with EU labelling rules, which aim at ensuring that
consumers get all the essential information to make an informed choice
while purchasing their foodstuffs. All of our products must include the
name of the food, the list of ingredients, the net quantity, the minimum
durability day, storage conditions or conditions of use, country of origin,
instructions of use, lot marking and the nutrition declaration, all this
information must be written in German language, in order to comply with all
specifications.

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OFFER

3 different kinds of Handmade Oaxacan mole (negro, coloradito and rojo) in a

500g. Presentation which comes in an octagonal glass container.

a) Direct competition

In German market there are some mole brands that are already being sold by
Mexican online stores, this brands are:

Doa Chonita: Comes in a 35o grs. Tetra pack box and its own by the
brand La Costea, even though this is one of the largest food manufacturers
in Mexico this isnt a popular mole version.

La Costea Mole: Comes in a 235 grs. Glass container, its also own by La
Costea and even though its more popular than Doa Chonita its not the
most famous version of mole.

Doa Mara Mole: Comes in a 235 grs. Glass container, this is the most
popular version that you can find in a Mexican super market, this doesnt
mean its the best mole, since due to its big commercialization it has lost the
classic artesian flavor.

Mayordomo Mole: Comes in a 450 grs. Glass container this version is the
most attached to the original mole flavor, and its the direct competition of
Mole Juquilita since both companies are based in Oaxaca, Mexico.

b) Indirect competition

Even though the texture, the smells, and the flavors of mole are hard to imitate,
there are some products that satisfy similar needs, the products that satisfy those
needs and are available in German Market are the following:

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Powder Mole Don Pancho: Comes in a 220 grs. Plastic bag, this
kind of mole in brand new to the market and difficult to accept to
the target, because it is inferred to the public that the product have pass
through a very industrial process.

Chilaquiles Sauce: Comes in a 16 onz. Plastic bag.

DEMAND

a. Consumer description

As an international enterprise its important to have our target market well defined
in order to know who our client will be, to know their needs and desires and in this
way provide them with our product, in the right moment, quantity and quality.

Geographic

People living or traveling through German territory principally in the cities of Berlin,
Baviera, and North Renania.

Demographic

Men and woman from 18 to 50 years old belonging to the middle class, and upper
middle class. Who were born in Mexico or have ever visited it.

Psychographic

Mexicans that reside in Germany or that have been out of the country for a very
long time, who are nostalgic about Mexicos culture, food and traditions. That are
looking for places where they can find an authentic Mexican experience. Also this
kind of costumer its not afraid of order online merchandise and food.

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It is important to emphasize that the minimum salary in Germany is 8.84

euros per hour, which means that a regular non specialized worker will
have to work 50 minutes in order to get one of our moles.

DISTRIBUTION CHANNELS

E-commerce: Selling the products through specific web sites specialized in

Mexican products. For example http://www.holamexico.de,
https://www.mercadomexicano.de/, https://www.mex-al.de/shop/ .

Retail: Selling the products to restaurants and stores specialized in Mexican

or Latin-American products. For example Tin Tan. Mexikanische Street Food
Kultur, Mara Bonita Restaurant, Agevo! Restaurant.

The alliances will play a main role in order to get our product into the final
consumer hands.

TRANSPORT

Our product will be packaged in boxes that will have 6 moles per box, they will
have our logo in front and inside this will have a certificate of authenticity. This are
going to be send in cardboard boxes that will contain about 800 to 1000, this with
the idea that each product has enough space to arrive without suffering any
damage.

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Dates of departure and delivery.

We will send our products to Veracruz Port on December 20 .

The package with our products in it will arrive to Veracruz port on December
21, in this same day our package will be sent to Hamburg Port in Germany.
(there is an estimate of 30 days in travel)
Our package will arrive to Hamburg Port proximally on January 21.
In January 21 our package will be transfer to our client.

Services and fees Price

Transpor from Oaxaca to Veracruz Port $ 324.00
Transport from Veracruz Port to Hamburg Port $ 89.00
Total $ 413.00

This prices are in dollars*

LINGUISTIC FACTORS

As we know, we are about to do businesses with a country that speaks a different

language than us, so in order to clear up all the differences that our languages may
have we will communicate in English, speaking English is a great way to do
businesses since its consider a global language, that its easy to understand, and
in some way very technical. Also if we want to be protected under the
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International Chamber of Commerce all of our negotiations and our

contracts must be written in English in order to avoid any
misunderstandings during the whole transaction.

POLITICAL FACTORS

Incoterms

In this case we will use FOB (Free On Board) because its a good way to share
responsibility with our buyer in Germany, our responsibility begins when our
products starts its travel in order to get to Germany, well be responsible for the
documents, the packing, the freight and all the expenses till our merchandise its in
Hamburg Port, since this moment the responsibility its transferred to our buyer as
well as the expenses originated by the movement and traffic of our products.

Free On Board means that the seller delivers the goods on board the vessel
nominated by the buyer at the named port of shipment or procures the goods
already so delivered. The risk of loss of or damage to the goods passes when the
goods are on board the vessel, and the buyer bears all costs from that moment
onwards.

Contract

This agreement was made on November 14 th 2017, between Mole Juquilita,

located in Abastos Market, Store 280, Sector 3, Oaxaca, Mexico, and Hola Mexico
located in Berln, Germany.

It is agreed as follows:

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Product: The products of Mole Juquilita will have to have all the
specifications regarding, the European Union Import Trade Regime, such
as the labels, the language and the product specifications.

Quantity: Hola Mexico commits to acquire 1000 products of Mole Juquilita, 400
500grs. Mole Negro, 300 500grs. Mole Rojo and 300 500grs. Mole Coloradito.

Price: The two parts agreed to pay a cost of 3.75 euros per product, which means
Hola Mexico will have to pay to Mole Juquilita the quantity of 3,750 euros once the
product its in Hamburg Port.

Payment: The buyer is obligated to pay to the seller the quantity of 3,750 euros
once the merchandise is in German Territory, this will be an only one time payment
and it must be a bank transference.

Clauses

Entire agreement clause: This Agreement supersedes all previous

understandings and agreements between the parties, whether oral or
written.
Notices: If theres any change or problems in the dates and customs
processes, the part must notice to Juaquin Guzman, the chief of the
International shopping.
Expenses: Except as otherwise provided in this Agreement, each Party
shall pay all costs and expenses it incurs in connection with the negotiation,
preparation and execution of this Agreement.

a. The seller: Mole Juquilita will be responsible for all costs incurred up to
Hamburg Port.

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b. The buyer: Arriving the product to Hamburg Port, the buyer Hola
Mexico will be responsible for the costs for the transfer of the product to
Berlin.

Language: The language that will predominate in the present Contract, as

well as the documents derived from it, including those in the Annexes will be
English.
Applicable Law Clause: The binding provisions of this Contact will be
governed by and construed in accordance with the laws of the Alternative
Dispute Resolution Procedure established by the International Chamber of
Commerce.

CONCLUSION

As we have seen the mole has great business opportunities in Germany, because
of the 2 different kinds of markets that we can explode, this kinds of markets have
a good purchasing power and they are interested either in try a new kind of meal or
just to remember how the authentic Mexican food taste like, also the bilateral
situation between Germany and Mexico is in a very great place, being Germany
the principal country that Mexico trades within the EU. Of course all this situations
doesnt excludes from risk, but we consider that our mole will be a well-accepted
product in the German market.

REFERENCES

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El Economista. (2017, March 1). Retrieved from El economista:

http://www.eleconomista.es/economia/noticias/8061177/01/17/El-salario-minimo-
aumenta-a-884-euros-por-hora-en-Alemania.html

Euromonitor. (2016, november). Retrieved from Euromonitor:

http://www.euromonitor.com/sauces-dressings-and-condiments-in-mexico/report

Hola Mexico. (2017). Retrieved from Hola Mexico:

http://www.holamexico.de/epages/es10670038.sf/de_DE/?
ViewAction=FacetedSearchProducts&ObjectID=27558405&PageSize=20&SearchString=sals
a

International Chamber of Commerce . (n.d.). Retrieved from International Chamber of Commerce:

https://iccwbo.org/

Mercado Mexicano. (2017). Retrieved from Mercado Mexicano: https://www.mex-

al.de/shop/de/search?
page=search&page_action=query&desc=on&sdesc=on&keywords=salsa&x=0&y=0

Mex-AL. (2017). Retrieved from Mex-Al: https://www.mex-al.de/shop/de/search?

page=search&page_action=query&desc=on&sdesc=on&keywords=salsa&x=0&y=0

sea rates. (2017, november 21). Retrieved from sea rates:

https://www.searates.com/es/shipping/list/?link-office=true&id=465620

Trade Helpdesk. (2017). Retrieved from Trade Helpdesk:

http://trade.ec.europa.eu/tradehelp/myexport#?
product=2103909010&partner=MX&reporter=DE

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