Cer mica de Costaragua (CC) began producing ceramic tiles in 1953. The founders were interested in forming a vertically integrated chain. In the 1990s, CC suffered the consequences of the policy, which liberalized the economy and in the midst of a decline in sales, she has decided to enter into a new unexplored market in the ceramics industry: low-income consumers. Lack of knowledge about the behavior of low-income consumers was a challenge for CC. Therefore, he sought the assistance of a social leader who knew … Read more »

Cer mica de Costaragua (CC) began producing ceramic tiles in 1953. The founders were interested in forming a vertically integrated chain. In the 1990s, CC suffered the consequences of the policy, which liberalized the economy and in the midst of a decline in sales, she has decided to enter into a new unexplored market in the ceramics industry: low-income consumers. Lack of knowledge about the behavior of low-income consumers was a challenge for CC. Therefore, he sought the assistance of a social leader who knew the residents of low-income sectors. A program called “remodeling your home” was launched and the community was actively involved. Existing community organizations were responsible for convening and coordinating sales promoters. Two years after the initiative was founded, CC extended to other areas of the city and other cities. Strengthen the distribution channel with specific adjustments for the low-income population creates an increase in demand, which resulted in a medium-term sales forecast of one million m2 of ceramic tiles per month. To achieve this, Remodeling hung on the vertically integrated value chain of CC, but requires a new distribution channel that was for the extended sales expectations in this market. The case provides three options to achieve the most suitable distribution of the El nica products: The first successor nonprofit organizations the most active role in the distribution by them in the maintenance inventory in their offices to supply the demand for a zone ; The second proposal suggests that CC direct distributor of the product to be from the factory to the consumer’s home, maintaining the role of El nica service center that the company created in the neighborhood, and a third option provides greater service centers that. than warehouses near the consumer
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from
Roberto Gutierrez,
Diana M. Trujillo,
Luz E. Orozco,
Marcus Thiell
Source: Social Enterprise Knowledge Network
17 pages.
Release Date: 1 September 2009. Prod #: SKE127-PDF-ENG
Ceramicas of Costaragua: The Challenges of sale to low-income citizens HBR case solution