INTERNATIONAL MARKETING

REPORT

EXPORT OF SEAFOOD TO SPAIN

SUBMITTED TO: SUBMITTED BY:

PROF. NITIN GUPTA GROUP 5

ANTONY LAWRENCE 19A1HP098

K ADITYA MADHAV 19A1HP024
NIKITA JOHN 19A1HP090
NISHANT SHARMA 19A3HP640
P SAI ANJANA 19A1HP012
SHIVDATH PRADEEP 19A1HP128
Q.1. Explain what specific tariff and nontariff trade barriers are present
with respect to your chosen product/service in the country selected by you?
How would you deal with them?)

In the European Union, Spain is India's 7th largest trading partner. Bilateral trade stood at
US$ 6.31 billion during January-December 2018 (MINCOTUR, Govt. of Spain), posting a
rise of 8.68 percent and for the first time passing the US$ 6 billion mark. Exports from India
grew by 8.49% and stood at US$ 4.74 billion, whereas imports grew by 9.25% and stood at
US$ 1.57 billion. With a cumulative FDI stock of US$ 2.83 billion (April 2000-December
2019), Spain is the 15th largest investor in India. Textiles, organic chemicals, iron & steel,
seafood, automobiles, and leather are India's top exports to Spain. Mechanical equipment,
electrical machines, chemicals, plastic and mineral fuels are India's main imports.

Fish and Seafood Trade

Owing to its high demand figures and the enormous potential of the fish and seafood
industry, Spain depends on imports, primarily from third countries. It is also a major exporter,
primarily to the EU, which accounts for more than two-thirds of Spanish exports.

Imports

Imports of fish and seafood from all sources for Spain were $6.3 billion in 2016. Shrimps and
prawns were the key imported segment in 2016, followed by live molluscs, including squid
and octopus. Morocco was the biggest single nation exporting fish, being the principal source
of octopus and squid. The European Union was the root of Spanish fish and shrimp imports
in 2016. The key exporters of fish and seafood to Spain within the EU have been France and
Portugal. Excluding the EU, Morocco, the United States, and Vietnam were the leading
exporters.

In 2016, consistent with the previous year, Spain imported $134 million of fish and seafood
from the United States. U.S. seafood is commonly recognized as superior quality in Spain but
higher in price than rival nations. The United States was the 16th largest exporter of fish and
seafood to Spain in 2016, rising from its 18th position in 2011. In 2016, the most imported
types included Live Lobster ($36.6 million), frozen surimi ($23 million), Alaska Pollock
($17.4 million), squid ($16 million), hake frozen fillets ($11.6 million), frozen Albacore tuna
($7.8 million), and frozen Pacific salmon ($4.8 million).

Exports

The European Union was the top destination in 2016 for Spanish fish and seafood. Within the
EU, Italy, Portugal, and France are the most extensive Spanish fish and seafood importers.
Excluding the EU, the United States and Japan were the leading importers. Spanish exports
rose by 9.4% in 2016, relative to those in 2015.

Tariff for Seafood Products

EU being a customs union, the Community Customs Code defined by Council Regulation
2913/92 is enforced by the Member States' 28 customs administrations. For the enforcement
of the Code, Commission Regulation 2454/93 lays down provisions. These general laws
govern all the areas of trade with third parties. All the Member States levies the same tariff on
goods imported from outside the EU. The import duty rate is calculated per the commodities'
classification in the EU Tariff Schedule and the customs value.

Since January 2013, Tariff suspensions have been suspended and replaced by the
Autonomous Tariff Quotas (ATQs) granted annually for three years. Such tariff limits are
protected by Regulation 2015/2265 of the Council. On an annual basis, autonomous quotas
are opened up. A quantitative restriction is imposed on each commodity or category of goods.
The quota remains available until it has met its cap. Depending on the demands of Member
States, quantities and reduced duties can change every year, typically depending on national
business requirements. Compromises generally are made at the ministerial level.

'TARIC' is an acronym for the European Communities' Integrated Tariff, which was adopted
simultaneously as the coding method of the CN. Further fragmentation of the CN codes to the
10-digit standard is the codes utilized. The TARIC provides details on tariff limits, third-
country, preferential tariff rates, suspensions of tariffs, and other trade steps. TARIC does not
have a legal instrument's status, but customs declarations must use the 10-digit codes. It is
possible to consult the EU's online customs website to look up product codes and related
import duties. The agricultural, food, and fish items referred to in Chapters 1 to 24 are
mentioned.

What about specific tariffs for sea-foods being imported from India?

Non-Tariff

Non-tariffs barriers are not quantifiable and are therefore hidden. Usually, it entails quotas,
boycotts, permits, standards and regulations, local content requirements, and foreign
investment limits. Once goods enter the EU, they need to be declared to customs in
compliance with their category in the Combined Nomenclature (CN). The Combined
Nomenclature is an instrument for the classification of products defined to conform with the
specifications of both the Common Customs Tariff and the EU's external trade statistics.

The European Union has set up a modern scheme of import controls (ICS) as part of the
'SAFE' standards laid down by the World Customs Organization (WCO) to protect the
movement of goods and services. It has been in operation since the first of January 2011.
Since then, operators must send to the country's customs of entry an entry summary
declaration (ENS) before the arrival of goods into the customs territory. Since the first of July
2009, all companies formed outside the EU, whether they wish to apply a customs declaration
or an entry/exit overview declaration, must have an Economic Operator Registration and
Identification (EORI) number.
These tariff and non-tariff barriers raise the commodity's price, thus limiting its demand, thus
separating the domestic producer from international competition to a certain degree. This is
why every nation maintains higher tariffs on items found to be vulnerable to imports.

What about specific non-tariffs for sea-foods being imported from India?

Elimination of trade barriers:

To address these challenges in the EU, we could get into the EU markets through the CETA
Agreement. Also, in four OECD European countries, EFTA reduces barriers. Use of the
Internet would be the easiest and most appropriate way, or businesses could establish brick
and mortar business by collaborating with a local company in a joint venture or partnership
for a strengthened local presence. Doing so bypasses many trade barriers. If it does not make
sense to create a local presence, there are always other choices, including forming a
partnership with a dealer and/or using a customs broker's expertise.

Trade barriers in the form of tariffs and non-tariff restrict trade. Free Trade Agreements
(FTAs), however, eliminate barriers and generate fresh opportunities. The primary aim may
be to remove tariffs, but agreements may broaden to other fields to cover non-tariff barriers,
including quotas, commodity standards, labor, and intellectual property.

Marks: 2 out of 4

Q.2. Provide details of the Product, Place, Promotion and Pricing strategies
for the chosen product/service to be followed by you in the selected
country.

PRODUCT
Demand of Seafood in Spanish Market

Spain is one of the biggest markets for fish and seafood in the world. Spain has the largest
fish processing industry in Europe and also has a high per capita consumption on fish and
seafood products. Moreover, Fish and seafood production in Spain through commercial
fishing & aquaculture is not sufficient to meet their domestic demand. Hence, imports remain
a key element in meeting market demand.

Fish and seafood holds a remarkable place in Spanish cuisine and are viewed as a healthy and
nutritional diet. In Spain, Seafood is consumed in many ways: frozen, processed, fresh and
even raw because of the fashionable Japanese influence. In Spain, Fresh fish is considered to
be superior quality to processed alternatives and consumers eat fish and seafood very
regularly, often several times a week, and many traditional dishes include fish and seafood.

Packaging
Consumers in Spain are demanding for sustainable packaging and, as a result, the seafood
industry is developing new initiatives to promote better practices. Responding to consumer’s
need of visual impact and convenient packages, Sealed Air’s Cryovac packaging will be used
for seafood in Spanish supermarkets which uses a soft vacuum which does not distort the tray
support. This packaging allows the customers to examine the food before purchasing and
ensure extended shelf life of the product.

Labelling

Following information is required to be labelled on seafood products and pre-packed products

need to have an additional information as compared to products that have not been pre-
packed.

All products:

 The name of the product, both the commercial and scientific names.
 List of ingredients to be added to the outer carton label.
 Method of Production – Cultured product or wild catch.
 Country of origin.
 Net weight.
 Date of minimum durability which consists the day, month and year & preceded by
the words “best before” or “use by”.
 The business name & address of the manufacturer, packer or seller.
 The packaging must contain an approval number.
 The packaging of the product must have a “lot number”, given to products belonging
to the same batch from the same exporter.
 Nutritional value.

Additional information for pre-packed seafood products:

 Packed in a protective atmosphere;

 Date of first freezing
 Added proteins.
 If processed, then information needs to be mentioned.
 Added water needs to be included.

Regulations and Quality Standards

As a member of the European Union (EU), Spain follows all EU directives and regulations.
European Union is a customs union so all Member States has to follow the same import
duties on goods imported from outside the EU and they are free to move throughout the EU
territory.

Export Health Certificate

Seafood products that are exported to the Spain must be approved by a health certificate
released by the Authority of the country of origin. This export certificate is the official
document between the exporting country (India) and the Spain that provides the official
guarantees required.

Following are the regulations to be taken care of while exporting fish or seafood to Spain:

 Regulation (EC) No 470/2009 talks about the procedure for setting MRLs for residues
of active substances in food of animal origin.
 Regulation (EC) No 396/2005 focuses on European Union Maximum residue levels
for pesticides.
 Regulation (EC) No 1881/2006 talks about the residue levels for certain
environmental contaminants such as heavy metals, including mercury.
 What about impact of cultural factors and country of origin factors on the
products?

Marks: 3 out of 4

DISTRIBUTION STRATEGY (PLACE) –

Spain is a country with a rich heritage and culture that has greatly influenced the
consumption of seafood and has established a dominating presence in the cuisine and
lifestyle of the people due to several historical and geographical factors. With a consistent
demand and need for seafood, an intensive distribution strategy should be adopted that
will ensure that the products are made available to all consumers easily.

There are several channels of distribution that can be strategically utilized to bring the
seafood products to the consumers in an accessible and affordable manner. Being a
perishable product however poses certain limitations as cold storage facilities/freezers
would be required for product storage. The figure given below depicts the export
distribution channel of seafood in Spain.
i Source: Seafood Trade Intelligence Portal (2019)
The network allows a great deal of flexibility and convenience in terms of packaging and
processing with options to process after import although this will increase the length of
the chain through the addition of various other entities such as canners and other
middlemen.

Retail Channels –

Supermarkets, hypermarkets, and some grocery stores are the best places to place our
product as they would have the appropriate storage facilities and provide a wide coverage
to reach the target market. With the consistently growing consumption of seafood, it is
important to make the product available to the masses in as many places as possible.
Collaboration with local fish vendors can also be done by providing the essential setup for
the storage of the products as this would help with deeper market penetration by making
the product available through all local channels. Shrimp, squid, and other more expensive
seafood products can also be made available through several gourmet and specialty
stores.
 The figure above shows the percentage
share of the various retail channels in terms of seafood.

Non – Retail Channels –

With the culmination of rapid digitalization, setting up of non-retail channels especially

through the online mode prove beneficial as part of the distribution channel. This specific
channel can be used to collaborate with food services, restaurants, hotels, catering
services, bars and pubs, etc. and provide them with their seafood needs which is most
likely in bulk.

E-commerce is a viable option that can be explored that will further the distribution
network of seafood in Spain allowing convenient and easy sourcing by the various
channels and can be controlled from anywhere in the world while avoiding the
complexities of middlemen.

Could have provided further details regarding Six Cs of Channel Strategy in

International

Market, as well as details about channel management

Marks: 3 out of 4

PROMOTION
 Social media: Social media is one of the most important platforms for promotions,
and can be used to create awareness and spread the word about the product. Seafood
would be promoted on platforms like Facebook, Instagram, Snapchat, Twitter, and
YouTube. The brand would have its own page on these sites and regular posts
regarding the products would be posted regularly. There can be constant interaction
with the consumers in the form of stories, quizzes to win free products, or discount
coupons. YouTube can be used to share the advertisements of the brand and videos
like fishing or how the products are stored and packed can be taken and used to show
the quality of the product and engage the consumers.
 Presence at events: Spain is known for its carnivals and fests which are famous for
food. Stalls can be set up at such carnivals since most of the people come to taste
good food and enjoy such events, like The Madrid Gastro Festival where the top
restaurants and chefs come together and offer a wide range of delicacies. Food and
beverage trade shows like the Meat Attraction can also be used to promote the brand
as this is an event that showcases fresh meat, frozen meat, and different varieties of
meat. The brand can also be one of the sponsors for Masterchef Espana which is a
famous culinary show and this can be leveraged to increase brand awareness.
 Print ads: Food and travel magazines like Embutidos, Pintxos and Tapas can be used
as a medium to display ads along with billboards and newspapers.
 Secondary associations: The brand can use associations with famous personalities like
Jose Andres, a celebrity chef who can use the product in a cooking video and
recommend the brand to his followers. Influencer marketing can also be used where
people with good social media following can promote the product and spread the
word among their followers. Albert Bevia who runs a channel on YouTube called
Spain on a fork, with 1.15 lakh subscribers can be sponsored to use the brand in any
of his recipe videos.

 Could have explained your detailed advertising startegy through the 7 steps in
International Advertising. Would there be any legal constraints?
 Marks: 2 out of 4

PRICING
Spain’s import value was $4.7 billion in 2018 and $4.4 billion in 2019.

Using skimming pricing

India exports shrimp worth $19 billion to Spain.

Shrimps are usually cost in Spain. Due to a shortage of shrimp there is chance of price to
increase. This is a positive situation. So we would be using skimming pricing for shrimps.
In 2015 and 2016 was €7.50 and €7.40 respectively was the average import price. And
frozen shrimp cost almost €15.77to €29.9 per kg. Using skimming pricing strategy, we
will try to target the segment of market that is not much price sensitive and we will be
keeping a premium price for this product.

Using penetration strategy

India one of the leading supplier of squid to Spain. There was an increase of 25% import
from India in 2015. Prices of squid and cattle fish depends on its variety like they are
fresh, frozen, processed, etc., Prices of squid varies between €3.00 and €8.70 per
kilogram. Fresh squid imported from outside Europe is most expensive, due to the high
costs involved with this type of conditioned (refrigerated) transport. Prices of Cleaned
cuttlefish is around €8.63 and Frozen whole and cleaned cuttlefish10.0. There is a price
escalation due to unique transportation. So, we need to reduce our price without
compromising in its quality. And use penetration strategy to capture the market. We will
try to reduce the price escalation by lowering the reducing costs.

Cuttle fish price in Spain:

Quality Sold Prices in EUR/Kilos

Quantit Mi Ma Variation
y n x
MEDIU 617 7.1 7.5  - -
 M 2 1 2.2
0.16
QUALIT %
Y
TOP 3642 7.4 7.9  
-
QUALIT 1 6 -
3.26
Y 0.2
%
5

Historic retail value sales of fish and seafood in Spain

US$ millions and period growth (%) – Current prices – Fixed 2017 exchange rates
Category 2013 2014 2015 2016 2017 CAGR
*
2013-
2017
Total 8,546. 8,259. 8,051. 7,913. 7,723. −2.5%
fresh 5 3 1 9 5
fish/seafoo
d
Crustacean 1,671. 1,586. 1,531. 1,508. 1,467. −3.2%
s 5 6 9 9 0
Fish 4,964. 4,816. 4,730. 4,685. 4,583. −2.0%
0 5 9 9 4
Molluscs 1,911. 1,856. 1,788. 1,719. 1,673. −3.3%
and 0 2 3 1 0
cephalopo
ds
Total 2,405. 2,362. 2,337. 2,342. 2,360. −0.5%
processed 2 7 9 5 5
fish/seafoo
d
Shelf 1,922. 1,882. 1,857. 1,866. 1,884. −0.5%
stable 3 0 9 2 9
Chilled 293.2 290.0 287.5 284.6 283.5 −0.8%
Frozen 189.6 190.8 192.5 191.6 192.1 0.3%
Source: Euromonitor International, 2018

*CAGR= Compound Annual Growth Rate

Forecast retail value sales of fish and seafood in Spain

US$ millions and period growth (%) – Current prices – Fixed 2017 exchange rates
Category 2018F 2019F 2020F 2021F 2022F CAGR
*
2018-
2022
Total 7,556. 7,393. 7,302. 7,221. 7,161. −1.3%
 fresh 9 9 4 8 7
fish/seafoo
d
Crustacean 1,404. 1,332. 1,287. 1,245. 1,209. −3.7%
s 4 9 3 7 8
Fish 4,518. 4,456. 4,435. 4,418. 4,412. −0.6%
5 2 1 1 0
Molluscs 1,634. 1,604. 1,580. 1,558. 1,540. −1.5%
and 0 8 1 0 0
cephalopo
ds
Total 2,406. 2,457. 2,511. 2,566. 2,622. 2.2%
processed 6 4 1 8 3
fish/seafoo
d
Shelf 1,926. 1,969. 2,014. 2,061. 2,107. 2.3%
stable 4 6 9 6 8
Chilled 286.2 289.5 293.5 298.0 302.9 1.4%
Frozen 194.0 198.3 202.7 207.2 211.6 2.2%
Source: Euromonitor International, 2018

F = Forecast *CAGR= Compound Annual Growth Rate

Could have explained how foreign commercial payments would be made. Any other pricing
issues?
Marks 3 out of 4

Total Marks: 2+3+3+2+3 = 13 out of 20

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