How to create demand for your new product? The story of banana

How to create demand for your new product? The story of banana
  • Post last modified:September 4, 2020
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The banana is a fruit, whose many varieties are produced throughout the tropical world year-round. The world’s top exported fruit, the global banana demand is worth $4 billion annually. Therein lies an intrigue international success story with lessons to be learned about overseas trade.

Herein another great article, read more about export success stories.

Each year, almost 80 million tons (72.5 million metric tons) of bananas are grown around the world. Collectively, India, Ecuador, Brazil, and China produce more than half of the world’s bananas, though most of their crops are consumed at home. In fact, slightly more than 80 percent of all the world’s bananas are grown and consumed locally. Of the four biggest producers, only Ecuador grows bananas primarily for export.

Of the less than 20 percent of bananas exported, three-quarters go to the United States, the European Union and Japan. Seventy-five percent of all exported bananas come from plantations in only four countries: Ecuador, Costa Rica, Colombia, and The Philippines.

Photo by Louis Hansel @shotsoflouis on Unsplash

Dan Koeppel, from the author of the book banana, argues that the name “banana” in wolof comes from “benan”, meaning “finger” in Arabic.

Portuguese sailors who bought bananas from north Africa carried it to the continent of America for the first time in the 1500s.

Even by the 1870s, the banana was not yet a well-known and demanded fruit in Europe and the USA.

In 1870, Lorenzo Dow Baker arrived on the shores of New Jersey with a bold decision to load 160 bunches of bananas on his sailboat instead of fish from Jamaica. In 1873 Central American railroad developer Minor C. Keith began to experiment with banana production in Costa Rica. Later, he planted bananas alongside a Costa Rican railroad track to provide revenue for the railroad.

Mr. Baker earned $2 for each bunch of bananas he sold. That meant 1000 percent profit. Boston had become their main stop when 21-year-old young Boston entrepreneur Andrew Preston was included, who realized early on that bananas will be extremely popular in North America. Mr. Baker and Mr. Preston founded Boston Fruit Company in 1885.

yellow banana fruit photograph
Photo by Harshad Khandare on Unsplash

United Fruit Company was founded in 1899 when the Boston Fruit Company and various fruit exporting concerns controlled by Keith merged. In 1903, United Fruit Company was listed on the New York Stock Exchange and became the first company to use refrigeration during open sea transport. Thereby, the lead actor of our article thus was born.

How to create demand for your new product?

United Fruit Company has tried every marketing technique to create demand for bananas in the USA. Before them there is no demand for banana in the country, the first bananas arrived in the United States in 1804 from Cuba and for the next 60 years the fruit was considered a novelty. Consumer demand was scares.

While bananas may be the world’s oldest cultivated crop, first grown in Southeast Asia 8,000 years ago, they were not consumed in the United States until the 19th century.

what you must do first is to create awareness. In this case, they used the influence of medical doctors to manipulate parents that banana would have health benefit for children. Furthermore, they bribed authorities to reference bananas in children’s schoolbooks. Most products fail to create an emotional connection with customers that’s why Mr. Baker and Mr. Preston could not do better to create awareness and do connect with consumers.

Secondly, they asked, how do we own the market? Simply, give new customers a deal. For the first time in the history, they created vouchers for the sale of a fruit. That worked very well. Initially, customers may not be willing to try out a product at full price. They made sure the customers would order again.

Once customers have received your product and like it, they’ll more likely to purchase from you again at the regular price.

As a result, bananas have become a part of meals across the USA in a few years. They created a demand from scratch, generated a market from zero demand. And then, they started to design the supply. 

They built railway networks in the countries of Central America where bananas grow. They developed innovative technologies to control the ripening of bananas on the road. The combination of modern transportation methods (steamships and railroads) with refrigeration technology allowed bananas to be stored longer and travel further.

Banana Republic

In political science, the term banana republic describes a politically unstable country with an economy dependent upon the exportation of a limited-resource product, such as bananas or minerals.

Graffiti implying a banana republic in Slovenia.

The United Fruit Company turned into the most effective power, especially with the bribery order it established in Honduras and Guatemala. This is the period when the American author O. Henry first brought it to the literature by using the phrase banana republic. He fled to Honduras in 1896, at the age of 34 because of the judgment against him, made the scene he saw in the first months of the country as the basis for his story cabbages and kings. This story tells of what happened in the fictional dictatorship “republic of anchuria”, whose only production is banana, and which stands by distributing bribe shares to its supporters. The Republic of Anchuria was the banana republic.

United Fruit Company “UFC” became the largest employer in Central America and the Caribbean in 1930’s. Behind the scenes, United Fruit Company ruled the Caribbean countries. The people of Honduras nicknamed UFC “el pulpo, octopus” because all the transportation infrastructure of Honduras (ports, railways, and highways) is under the control of this company.

By 1930s, UFC alone controlled 85 percent of all the banana market in the USA. The most unusual name in the banana industry was also Samuel Zemurray, the founder of the Cuyamel fruit company, Thereafter, Mr. Zemurray became CEO of our lead actor company in 1924.

United Fruit Company “UFC” became the largest employer in Central America and the Caribbean in 1930’s. Behind the scenes, United Fruit Company ruled the Caribbean countries. The people of Honduras nicknamed UFC “el pulpo, octopus” because all the transportation infrastructure of Honduras (ports, railways, and highways) is under the control of this company.

By 1930s, UFC alone controlled 85 percent of all the banana market in the USA.

The most unusual name in the banana industry was also Samuel Zemurray, the founder of the Cuyamel fruit company, Thereafter, Mr. Zemurray became CEO of our lead actor company in 1924.

Mr. Zemurray, a Russian immigrant and businessman, helped make the exotic banana a common food in the United States. Zemurray was a shadowy figure who ran the powerful United Fruit Company, expanding banana production into Central America—now the world’s top banana exporting region.

In 1924, Dole fruit company founded by the Vaccaro Brothers started to have the remaining share of the sector.

The United Fruit Company has consistently supported authoritarian governments, dictators, to comfortably maintain profits and market dominance through bribery. That prevented the development of democracy and law and becoming transparent.

In 1928, workers went on strike in protest against poor pay and working conditions in the company plantations Ciénaga in Colombia. The company lobbied the US government forces to assist with repressing the outbreak, however, the Colombian government opted to quell the strike on its own, sending military forces into the town of Ciénaga, where the strikers had gathered, on the 6th of December. The repression resulted in the deaths of scores of plantation workers and their families.

This episode is known in the history of Colombia as the Massacre de las Bananeras (Banana massacre). Gabriel García Márquez alludes to the event in his novel One Hundred Years of Solitude by describing

“a military suppression that resulted in the death of 3,000 dead plantation workers in the fictional town of Macondo.”

Gabriel García Márquez, One Hundred Years of Solitude

Bananagate

Eli Black, one of the shareholders of UFC, which later became United Brands Company, appointed as CEO in 1968 by acquiring most of the company shares.

When the US authorities (SEC) investigated Mr. Black’s suicide, it uncovered a scandal that was named Bananagate.

United Brands had paid a $1.25 million bribe to Honduran President Oswaldo López Arellano, followed by another $1.25 million the next year. The money was to be put in a Swiss bank account. The operation was managed via the Honduran Minister of the Economy, Abraham Bennaton Ramos. After the bribe, the Honduran tax was reduced from fifty cents to twenty-five cents per box. This reduction saved United Brands Company about $7.5 million in tax payments.

In addition, it was discovered that United Brands Company had paid another $750,000 in bribes to an Italian official to prevent restrictions on United’s banana exports to Italy, beginning in 1970. The SEC determined that none of the bribes could have been paid without the knowledge and approval of Mr. Black. What is referred to as the Bananagate scandal paved the way for the U.S. Congress to create the 1977 Foreign Corrupt Practices Act.

After Mr. Black’s suicide, United Fruit Company had fallen into the hands of Cincinnati-based billionaire Carl Lindner. Having acquired all the shares in 1984, Mr. Lindner changed the company’s name to Chiquita Brands International…

Articles referenced

en.wikipedia.org/wiki/United_Fruit_Company

en.wikipedia.org/wiki/Lorenzo_Dow_Baker

www.goodreads.com/book/show/1260005.Banana

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