Case | HBS Case Collection | May 2005 (Revised September 2005)

Gallardo's Goes to Mexico

by Clayton M. Christensen

Abstract

The theories of market segmentation and brand building in Chapter 3, What Products Will Customers Want to Buy? in The Innovator's Solution by Clayton Christensen and Michael Raynor suggest that when companies segment markets and build brands in ways that match how the customer sees the market--customers hire products to get jobs done--their success rate in innovation increases. Gallardo's is a privately held firm whose products--salsas, sauces, and seasonings for Latin American dishes--were sold primarily in the southwestern United States. When the company had saturated that geographical market, its CEO decided to invade Mexico. Describes how Gallardo's marketers learned what jobs Mexican housewives hired these products to do. Shows how the company used these market insights to segment the market along different lines than its competitors. Gallardo's products and advertisements ended up spurring significant growth in the market, but most of the growth was captured by its primary competitor. What went wrong? Were Gallardo's branding and segmentation strategies consistent with the jobs-to-be-done model? Does the company have the chance to relaunch its products more successfully?

Keywords: Innovation Strategy; Marketing Strategy; Global Strategy; Brands and Branding; Segmentation; Food and Beverage Industry; United States; Mexico;

Citation:

Christensen, Clayton M. "Gallardo's Goes to Mexico." Harvard Business School Case 605-072, May 2005. (Revised September 2005.)