ANTENOR ORREGO PRIVATE UNIVERSITY

SCHOOL OF ECONOMICS

“EVALUCIATION OF THE VALUE CHAIN OF BALANCED DOG

FOOD PREPARED FROM INGREDIENTS OF PLANT ORIGIN
IN THE CITY OF TRUJILLO”
Executors:
EDDIE JORGE SAILING GAMARRA
MENDOCILLA AGUIRRE CESAR
VEGA CASTILLO HAROLD
Adviser:
Econ.EMILIO ROMAN CABANILLAS

TRUJILLO – PERU
2018

2
INDEX
YO. INTRODUCTION………………………………………………………….
1.1 Presentation…………………………………………………………
1.2 Problem…………………………………………………………
1.3. Problem formulation………………………………………..... 1.3.1
General Problem………………………………………..
1.3.2 Specific problems…………………………………….... 1.4
Justification………………………………………………………… 1.5
Objectives………………………………………………………….. ...
1.5.1 General objective…………………………………………….
1.5.2 Specific objectives …………………………………….....
1.6. Scope of the research………………………………………………..
II. LITERATURE REVIEW…………………………………………..
2.1. Background………………………………………………….........
2.1.1. Pet food market ……………………… 2.2.
Theoretical
framework……………………………………………………….
2.2.1. Porter's Value Chain………………………………
2.2.2. Porter's Five Competitive Forces………………….
2.2.3. Population estimation……………………………………..
2.2.4. Nutritional requirements of the dog……………………..
2.2.5. History of commercial dog food…………………
2.2.6. Food allergies in dogs………………………………
2.2.7. Types of dog food………………………………... 2.3
Conceptual
framework…………………………………………………….
III. MATERIALS AND METHODS…………………………………………….
3.1. Materials……………………………………………………………
3.2. Research location………………………………………………
3.3. Definition of the field of study…………………………………….

3.4. Methodology……………………………………………………........
3.4.1. Kind of investigation ……………………………………......
3.4.2. Design of the investigation…………………………………..
3.4.3. Limitations………………………………………………......
3.4.4. Phases of the research process………………………….
3.4.5. Hypotheses stated…………………………………………
 3.4.6. Operational definitions……………………………….....
3.5. Information sources……………………………………………..
3.6. Data collection instruments……………………………….
3.6.1. Main survey………………………………………………
3.6.2. Focus Group…………………………………………………
3.7. Methodological
techniques………………………………………………..
IV. RESULTS AND DISCUSSION…………………………………………..
4.1. Analysis of the value chain……………………………………….
4.1.1. Dog food value chain (constant)……….
4.1.2. Regular dog food value chain………
4.1.3. Hypoallergenic dog food value chain……
4.1.4. Vegetarian dog food value chain……… 4.2. Marketing
Mix………………………………………………..
4.2.1. Regular dog food……………………………………......
4.2.2. Hypoallergenic dog food…………………………..
4.2.3. Food made from ingredients of plant origin for
dogs…………………………………………………..
4.3. Offer estimate………..……………………………………....
4.3.1. Offer of dog foods made from ingredients of plant
origin……………………………………
4.3.2. Hypoallergenic dog food offer………………..
4.3.3. Regular dog food offer…………………………
4.3.4. Offer of balanced food for dogs in general………
4.4. Estimation of the dog population……………………………….
4.4.1. Canine population in Peru…………………………………….
4.4.2. Canine population based on DIGESA vaccination
records……...
…………………………………………………………
4.4.3. Estimated canine population based on daily food
intake………………………………………………………
…
4.4.4. Estimated canine population according to the person:can
relationship.…
4.5. Estimation of demand…………………………………………..
4.5.1. Demand for balanced dog food………………...
 4.5.2. Demand for hypoallergenic food made from ingredients of
plant origin……………………………………
4.5.3. Demand for regular dog food…………………..
V. CONCLUSIONS………………………………………………………….
SAW. RECOMMENDATIONS…………………………………………………..
VII. BIBLIOGRAPHIC REVIEW…………………………………………...
VIII. ANNEXES……………………………………………………………………
 The mind tends to wander!
Focus on what you want!
The more you concentrate the more you will learn!!!
Ignore distractions!
-Emilio Roman Cabanillas
 SUMMARY

The main objective of this thesis was to evaluate the critical factors of the value
chain of dog food made from ingredients of plant origin, and the specific
objectives were to provide an approximation of the dog population and estimate
the supply, as well as the demand for the product under study in the city of
Trujillo. The methodology consisted of exposing the configuration of the total
balanced dog food market, through observation and analysis of the environment
and the review of documents and statistical information. On the other hand,
different methodological tools were carried out, such as the Value Chain and the
analysis of Porter's 5 Forces, in order to achieve a better understanding of the
market dynamics through visits to distributors and marketers, interviews and
industry experts and surveys of dog owners. The main results found were: the
critical factors of the value chain of dog food made from ingredients of plant
origin are the distribution methods (External Logistics) and the choice of
intermediaries or commercial establishments (Marketing); The average canine
population in the city of Trujillo was estimated at a minimum of 1,393,000 dogs;
The supply of dog food based on ingredients of plant origin was approximately
60 tons and the minimum demand is constituted by approximately 80,508 dogs in
the city of Lima in 2014.

Keywords: vegetarian, formulation, distribution, suppliers

ABSTRACT
The main objective of this dissertation was to evaluate the critical factors of the
based in plaints-derived dog food value chain in Trujillo, Perú and the specific
objectives were to provide the approximate dog's population, and estimate the
supply and the demand of the mentioned product. The methodology used in this
dissertation involves the exposition of general dog food market characteristics in
Lima through the observation and analysis of the market environment, document
review and statistical information. On the other hand, the author also used
methodological tools, as the Value Chain and the Porter Five forces, through
visits to commercial and distributor companies, interviews with animal health
professionals and industry experts, buyer surveys in order to develop the basis on
plaints- derived dog food value chain and an investment proposal for business
man in Trujillo, Peru. The main findings in this thesis were: the main factors of
the based on plaints-derived dog food value chain are the distribution methods
and the commercialization strategies; the average dog population in Lima is
estimated in at least 1,393,000 dogs; the supply of the based on plaints-derived
dog food were about 60 tons, and the demand food includes a minimal population
of 80,508 dogs in 2014 in Trujillo, Peru.

Keywords: vegetarian, formulation, supply, providers.

I. INTRODUCTION
I.1 PRESENTATION
Since its origin, more than 200 years ago, the market dedicated to pet care has
remained constantly growing. In particular, the economic boom that Peru has been
experiencing for almost ten years has resulted in greater purchasing power among
the population, allowing Peruvian families to support an additional member;
According to Jaramillo and Zambrano (2013), representatives of the Inter-American
Development Bank, Peru enjoys one of the most dynamic economies in the region,
in an environment characterized by fiscal stability and low inflation.

Regarding the well-being of pets in our homes, their diet is a latent concern; In our
country alone, according to the newspaper El Comercio (09/15/2014), the pet food
market moved S/.166 million in 2013.

Within the range of pets raised in our country, one of great importance is the dog,
the protagonist of this research; However, in 2013, only 25% of dogs consumed
balanced food in the country according to Euromonitor (2014).

Nowadays, there is a significant population of dogs that suffer from food allergies to
proteins of animal origin and their owners find it necessary to look for alternative
foods to counteract this evil. Two types of alternative nutrition, very popular in the
21st century, are vegetarianism and veganism: an individual is considered
vegetarian when his or her diet is based mainly on the consumption of plant
products, although the use of live animal products is allowed. like eggs, milk, etc.
(RAE, 2012). On the other hand, an individual is considered vegan if they exclude
all products of animal origin from their diet (and also avoid products derived from
animals such as leather, silk and wool) (Encyclopedia Britannica, 2014). Currently,
both diets are considered a good feeding option for dogs, as long as they meet their
nutritional requirements.

With this work, the author seeks to provide a first study on the vegan and/or
vegetarian dog food market in the city of Trujillo. Likewise, there are no works on
the value chain of balanced food in general for dogs in Trujillo, which is why the
author felt the need to expand his research.

Thus, in the first chapter, the author establishes the research objectives, the main
objective being the identification of the critical factors of the value chain of
balanced dog food made from ingredients of plant origin in the city of Trujillo. The
specific objectives, limitations and justification of the work are also established.
In the second chapter, the theoretical reviews necessary to carry out the research are
described. The author presents all the information on dog food that is relevant to this
market research, as well as the theoretical foundation of the methodological tools
used and population estimation methods.

In the third chapter, the author details the methodology used, the necessary materials
and the field of study; Likewise, the data collection instruments used are explained.

In the fourth chapter, the results of the research are presented and, in chapters five
and six, the conclusions and recommendations reached by the author are presented.

I.2 PROBLEM

Around the world, a large amount of research and market studies have been carried
out on balanced dog food. However, in Peru there is very little market research on
dog products and there is no study on the value chain of balanced dog food in the
city of Trujillo.

On the other hand, a wide variety of dog food with different types of formulation is
offered in the world market; However, the supply of alternative foods in our country
is difficult to access, either due to scarcity or high price. Furthermore, there are no
works on alternative food or its market in the city of Trujillo.

Likewise, there is a general lack of information about the dog food market and the
dog population throughout the country.

I.3 PROBLEM FORMULATION

I.3.1 General Problem

What are the critical factors of the value chain of balanced dog food made from
ingredients of plant origin in the city of Trujillo?

I.3.2 Specific problems

  What are the primary and support activities in a company that produces
balanced dog food made from ingredients of plant origin in the city of
Trujillo?

 What is the Marketing Mix used by balanced dog food made from
ingredients of plant origin in the city of Trujillo?

 What is the current offer of balanced food made from plant-based

ingredients in the city of Trujillo?

 How many dogs live in the city of Trujillo?

 What is the current demand for balanced food made from ingredients of
plant origin in the city of Trujillo?

I.4 JUSTIFICATION

The author's goal was to provide the scientific community with the first work on the
value chain of balanced dog food made from ingredients of plant origin in the city of
Trujillo, exposing the characteristics of the balanced food industry in general, with
in order to evaluate the size, attractiveness and projections of the market.
In the same way, with this market research we sought to find a marketing alternative
that allows us to satisfy more than just a need. This research, in addition to breaking
paradigms about dog feeding, opens new paths for entrepreneurs who want to enter
the market for balanced vegetarian or vegan dog food, providing solutions to the
problems raised, providing information to clients and the community. in general and
establishing guidelines for entrepreneurs seeking to invest in an attractive and
constantly growing market.
Finally, this work generates theoretical value due to the reflection and discussion
both on the knowledge of the pet food market and within the field of administration,
since, in some way, the theories applied in the research are related.

I.5 GOALS

 Identify the primary and most important support activities of a company that
produces balanced dog food made from ingredients of plant origin in the city
of Trujillo.

 Study the existing Marketing Mix of balanced dog food made from
ingredients of plant origin in the city of Trujillo.
  Identify the current offer of balanced dog food made from ingredients of
plant origin in the city of Trujillo.

 Provide an approximation of the dog population in the city of Trujillo.

 Estimate the current demand for balanced dog food made from ingredients of
plant origin in the city of Trujillo.

II. LITERATURE REVIEW

In this chapter, the author presents the background, theoretical framework and concepts
that the reader needs to know to achieve full understanding of this research work. The
literature review includes basic concepts, description of the methodological tools used,
population estimation methods and a panoramic view of the current situation of the dog
food market.

2.1. BACKGROUND

As mentioned previously (section 1.2), there are no previous works on the value chain
of balanced dog food in the country. However, we will work with existing secondary
information on the pet food market at a global, regional and local level.
2.1.1. Pet food market

a. Global context
Coriolis and the New Zealand Ministries of Business and Primary Industry (2014) state
that there is a significant population of dogs around the world, the overwhelming
majority of which are found in the United States, as shown in Figure 1.

Likewise, Coriolis et al. (2014) state that within this multi-billion dollar pet products
market, dog food has the highest sales volume with 41 billion US dollars (45% of total
sales), as shown in Figure 2.

Figure 1. Canine population in various countries around the world

 SOURCE: Coriolis et al., 2014

Figure 2. Sales distribution in the global pet market

SOURCE: Coriolis et al., 2014

According to Coriolis et al. (2014), the multinational Mars dominates the world market
with 37% of global dog food sales; This company stands out for its world-renowned
brands such as Royal Canin and Pedigree. Next is the multinational Nestlé, which with
brands such as Purina and Dog Chow, is the second company with the most sales of pet
food in the world. In Figure 3, you can see the market share of each of the
aforementioned multinationals for the year 2014.

Figure 3. Distribution of global pet food sales by company

 SOURCE: Coriolis et al., 2014

The 5 multinationals that dominate the pet food market and their best-known brands
worldwide are shown in Table 1.

Table 1. Leading pet food manufacturers in the world

SOURCE: Coriolis et al., 2014.

b. National context
Even though there are no official figures on the dog population in Peru, according to
Euromonitor (2015), the dog population in the country amounts to 3,865,000 dogs.

Regarding market dynamics, according to the most recent national study of balanced
dog food, prepared by Escalante et al. (2011), before Nestlé acquired the Mimaskot
brand in 2012, was in second place with a 28% market share, just after Rinti SA who
had a market share of 32%; More details on the market share of the industry leaders are
set out in Figure 4.

Figure 4. Market share per company in Peru

Source: Escalante et al. (2011)

On the other hand, according to Escalante et al. (2011), within the wide range of
balanced dog food, there are subcategories that seek to meet the needs of specific
market niches, these are: Super Premium food, Premium, Regular (known as Main
stream), Economical and Sandwich or Snacks. . The largest segment for 2010 was
Economic food (with brands such as Thor and Happy Can), with 38% penetration;
followed by Premium food (such as Eukanuba and Pro Pac) with 30% penetration.
Figure 5 details the market share by segment in the country in 2011.
 Figure 5. Market share by type of dog food in Peru

Source: Escalante et al. (2011)

c. Regional context: the city of Lima as a market niche

According to the latest reliable work on the characteristics of the canine population in
Metropolitan Trujillo (Málaga, 1972), the dog/person ratio in Trujillo was 1/10.3.
However, there are no current studies or censuses in this regard.

Regarding the relationship between dogs and people, Jaramillo and Zambrano (2013)
highlight important facts about the human population in the city of Trujillo: the first is
that the recent economic growth process was induced by a significant expansion of the
middle class, which went from approximately 25.9% of the total population in 2005 to
48.9% of the population in 2011. This growth is most evident in the city of Trujillo
where, according to the Peruvian Association of Market Research Companies, APEIM
(2014), Socio-Economic Levels “B”, “C” and “D” were the most important for the year.
2013; It should be noted that SES “C” is the largest and includes more than 3,908,000
people, which represent 43% of the total population of the city of Trujillo. The
distribution of the population of the city of Trujillo by Socioeconomic Level is detailed
in Figure 6.
 Figure 6. Distribution of people by SES in the city of Trujillo

*NSE: Socio-Economic Level

Source: APEIM, 2014

The second fact identified by Jaramillo and Zambrano (2013) is that not only has the
number of families classified as middle class increased, but also their income, which has
grown at a rate higher than the average for the economy in recent years. So much so
that, according to the APEIM (2014), the average monthly family expenditure of the
middle class in the city of Trujillo ranged between 2,800 and 4,400 nuevos soles in
2013, the highest figures recorded in history. The average income and expenses made
by households in the city of Trujillo according to Socioeconomic Level are shown in
Table 2.

Table 2. Average household expenses in the city of Trujillo according to NSE

SOURCE: APEIM, 2014

According to APEIM (2014), the areas with the largest population belonging to the
middle class are 2, 4, 6 and 7. Zones 6 and 7 have a higher percentage of the population
belonging to SES “B” and include districts such as Víctor Larco Herrera, Huanchaco
and Trujillo. On the other hand, zones 2 and 4, both with the highest percentages of
population belonging to the SES “C”, include districts such as La Esperanza and El
Porvenir. The distribution of people by Socio-Economic Levels in urban residential
areas of the city of Trujillo.

2.2. THEORETICAL FRAMEWORK

2.2.1. Porter's Value Chain

According to Joaquín Garralda (1999), the first successful tool that managed to
systematize and facilitate strategic analysis originated in the 60s at the School of
Strategic Thinking at Harvard University and is known as SWOT (Strengths,
Weaknesses, Opportunities and Threats). for its acronym in Spanish, and SWOT for its
acronym in English. However, Garralda (1999) also states that there are two drawbacks
when applying this analytical method in a company: the high level of difficulty when
classifying some events and the absence of a system to search for the facts that should
be included in a or another category.

It was not until the origin of Michael Porter's Value Chain in 1987 that companies had a
tool to systematically analyze their companies both internally and externally.

According to Kaplinsky (2010), the Value Chain describes the total variety of activities
required to drive a product or service from its conception to delivery to the consumer,
involving combinations of physical transformation and the inputs of different producer
services.

According to Porter (1997), the Value Chain is a link to the set of strategic activities
relevant to understanding the behavior of costs and the sources of differentiation of
companies; This is made up of primary activities, support activities and the profit
margin (difference between income and expenses). Below is a concise description of the
different activities included in the value chain, according to Carrión (2007):
 a. Primary activities

 Internal logistics: includes activities associated with the reception, storage,

control and scheduling of stocks, internal distribution of materials (until their
incorporation into the production process), among others.

 Operations: groups activities associated with the physical transformation of

inputs into finished products or services.

 External logistics: includes order processing, scheduling, material collection,

storage and physical distribution to buyers.

 Marketing and sales: associated with the sale of the product and the activities
aimed at achieving it.

 Service: is responsible for the support processes that allow maintaining and
improving the value of the product or service sold.

b. Support activities

 Procurement: focus on the purchase of inputs that will be used to obtain the final
product or service.

 Technological development: is related to obtaining, improving and managing

technologies in a company, both product and process.

 Human Resources Management: includes everything related to the development

of talent within a company.

 Business Infrastructure: covers the activities that support the entire Value Chain.

The Value Chain, according to Kaplinsky (2010) is an important construction to

understand the distribution of benefits that arise from the design, production, marketing,
coordination and recycling of a product or service; Such primary benefits accrue to
those parties that are protected from competition.
According to Garralda (2013), the definition of a company's Value Chain is necessary to
diagnose competitive advantage; Likewise, not only should activities be identified by
headings but an attempt should also be made to discover the interrelationships between
them, because their mutual influence can have strategic importance. Figure 6 shows
Michael Porter's Value Chain scheme referred to.
Figure 6. Porter's Value Chain

SOURCE: Michael Porter (1997)

2.2.2. Porter's five competitive forces

Porter (1997) states that the intensity of industrial competition and the potential for
profits in the market are determined based on five competitive forces:

 Threat of intense rivalry among competitors in the segment.

 Threat of new competitors.

 Threat of substitute products.

 Threat of greater bargaining power on the part of buyers

 Threat of greater negotiating capacity on the part of suppliers.

The first three forces are a direct threat to a company, while the last two represent an
indirect threat to its bargaining power (Porter, 1997).

The scheme provided by Porter allows for the diagnosis of a given industrial
environment, helping a business unit make decisions about its future operations.
According to Porter (1997), the attractiveness of specific industries and markets can
vary dramatically and this scheme is vital for companies to know their market in order
to determine how they can be successful.

When analyzing this scheme, Porter (1997) asserts that a market is less attractive when
most of the five forces are high. Next, in Figure 7 the author shows the diagram of
Porter's five competitive forces.

Figure 7. Porter's five competitive forces

 SOURCE: Porter, 1997

2.2.3. Population estimation

Some population estimation methods from an ecological point of view, according to
Margaleff (1982), are marking and recovery, selective predation, different types of
distributions and the distance between individuals. However, according to Smith and
Smith (2007), it is unlikely that a researcher will be able to gather observations
(measurements) on all members of a population; therefore, it is necessary to collect
observations from a subgroup of that population. Margaleff (1982) agrees with this last
statement and assures that samples are normally extracted that incorporate the
experience of the observer and subjective factors that influence the effectiveness of the
estimate and that constitute indirect methods of population estimation, which are
responsible for evaluating a population through a chain of more or less uncertain
hypotheses on which calculations are based to estimate the true population of a species.

According to Begon (1989), the consideration of problems and contexts must precede
that of mathematical techniques and it must be accepted above all that there is no
possibility of specifying the size of a population precisely. According to Ramírez
(1999), the choice of environmental variables can be determined by human activities,
such as partial or total dependence.

Regarding the variables to be evaluated when estimating a population, according to

Ramírez (1999), the relationship between one of them and the abundance of a certain
species follows a curve that resembles a parabola or a normal probability distribution
( also called coenoclimate). From the statistical point of view, we find the same
situation since, according to Ramírez Ramírez (1998) the Law of Large Numbers has
the consequence that if we observe n realizations of a random variable (large n) and said
realizations are independent of each other , then the average of the values obtained will
be very close to the mean of the variable, in a high percentage.

Similarly, Larson (1992) states that according to the Law of Large Numbers the mean of
n samples of a random variable remains constant, plus/minus one standard deviation;
That is, the use of samples is sufficient since the additional units will be distributed
normally. Likewise, Smith and Smith (2007) assure that the standard deviation is a
particularly informative calculation when the data have a normal distribution (identical
general shape with a greater number of values concentrated in the middle).

2.2.4. Dog nutritional requirements

According to Van Gelder (1978), the Canis Lupus Familiaris classification is
universally applied to dogs domesticated from one or more subspecies of Canis lupus.

The domestic dog, according to Walker (1980), due to its long association with man, is
one of the least carnivorous species in its metabolic capacity; Its nutritional needs are
more similar to those of man than to those of a carnivore such as the domestic cat.
Because of this, Walker (1980) states that the dog is, or can be, an omnivore.

The National Research Council -NRC, EU- (2006) states that the nutritional
requirements of the dog depend on its size, breed, life stage, among other factors. A
better understanding of how dogs use different nutrients in food and how much they
need can help owners choose a healthier diet for their pet.

According to the NRC (2006), dogs need different types of nutrients to survive: amino
acids from protein, fatty acids, carbohydrates, vitamins, minerals and water.

a. Proteins and amino acids:

According to Teijón (2001), proteins are linear polymers in which the

monomeric units are amino acids, which fold into a remarkable diversity of
three-dimensional shapes and provide them with a corresponding variety of
functions.

The NRC (2006) states that dogs cannot survive without protein in their diets.
The protein they need contains 10 specific amino acids that dogs do not produce
on their own; Known as essential amino acids, they provide the building blocks
for many important biological compounds and active proteins. In addition, they
donate the carbon chains necessary to produce glucose and obtain energy.

According to the NRC (2006), dogs can survive on a vegetarian or vegan diet as
long as it contains sufficient protein and is supplemented with vitamin D.

b. Lipids (fat) and fatty acids

According to the NRC (2006), lipids, derived primarily from animal fats and
seed oils of various plants, offer the most concentrated source of energy in the
dog's diet. Likewise, fatty acids play a role in cell structure and function.
 Edney (1989) states that it is difficult to state the exact amounts of total fat
needed in a serving of dog food; The only demonstrable need for fat is as a
provider of Essential Fatty Acids (EFA). On the other hand, Case et. al (2001)
state that the AGE requirements of dogs are usually expressed in terms of
linoleic acid content, since the canine physiological needs for essential fatty
acids can be met with a sufficient amount of linoleic acid in the diet. However,
Edney (1989) states that alpha-linoleic and arachidonic acids are also considered
AGEs in the diet of dogs.

c. Carbohydrates

Ivan Burger (1989) points out that this group includes simple sugars (such as
glucose) and larger molecules (such as starch) composed of chains of simple
sugars.

Teijón (2001) states that carbohydrates act as structural elements, energy

reserves and components of fundamental metabolites. However, Edney (1989)
assures that it is likely that dogs can maintain themselves without consuming
carbohydrates if the food ration provides a sufficient amount of fat or protein,
from which the metabolic needs of glucose can be covered.

d. Minerals

The NRC (2006) establishes that the twelve essential minerals in dog nutrition
are: calcium, phosphorus, potassium, sodium, chlorine, magnesium, iron,
copper, manganese, zinc, iodine and selenium.

Edney (1989) states that calcium is involved in blood coagulation and the
transmission of nerve impulses; Likewise, it ensures that phosphorus performs
more functions than any other element in the body. Additionally, according to
the NRC (2006), calcium and phosphorus are essential for strong bones and
teeth.

According to the NRC (2006), potassium, sodium, and chlorine are necessary
for the transmission of nerve impulses, muscle contractions, and cell signaling.
In the same way, Edney (1989) states that these three substances are the main
electrolytes of body water and that, in addition, magnesium is important in the
metabolism of sodium and potassium since it performs key functions in
numerous essential enzymatic reactions.
 Trace elements, as indicated by the NRC (2006), are those that are present only
in trace amounts in the body and include iron, manganese, zinc, iodine, selenium
and copper; These act as helpers in a wide variety of enzymatic reactions.

e. Vitamins

According to Teijón (2001), the term vitamins can be generally defined as any
essential substance in minimum quantities necessary for normal cellular
function.

According to Edney (1989), vitamins are classified as fat-soluble and water-

soluble. Fat-soluble vitamins include vitamin A (related to vision), vitamin D
(known as the bone vitamin), vitamin E (antioxidant and stabilizer of cell
membranes) and vitamin K (regulator of blood clotting).

Water-soluble vitamins, according to Edney (1989), are almost all related to the
use of food and the production or interconversion of energy in the body; These
include Thiamine, Riboflavin, Niacin, Pyridoxine, Biotin, Choline, vitamin C,
folic acid, among others.

The Association of American Feed Control Officials or The Association of American

Feed Control Officials in its official language (AFFCO, EU), a subcommittee of the
National Academies (NRC), has established nutritional profiles for dogs and cats. These
profiles were designed to establish the minimum and maximum nutritional
concentrations for dog and cat foods formulated with commonly used ingredients that
are complex and unpurified (AAFCO, 2014). Likewise, according to Baldwin et. al
(2010), AAFCO provides a mechanism for the development and implementation of
uniform and equitable laws, regulations, standards and policies in the United States of
America, and establishes nutritional profiles of dog and cat foods. The nutritional
profiles established by AFFCO are set out below in Table 4.

Table 4. Dog Food Nutrient Profile Established by AAFCO

*CyR: Growth and Reproduction
**ND: Not Determined
SOURCE: AAFCO, 2014
Continuation

*CyR: Growth and Reproduction

**ND: Not Determined
SOURCE: AAFCO, 2014
The European pet food industry has also adapted recommendations for nutrient levels in
pet foods, in close collaboration with scientists. The European Pet Food Industry
Federation (FEDIAF, EU) represents the national associations of the pet food industry
in the European Union and Bosnia-Herzegovina, Croatia, Norway, Russia, Serbia and
Swiss. One of the main objectives of FEDIAF is to provide well-balanced and nutritious
pet food and thus ensure the well-being of domestic animals. (FEDIAF, 2013). The
FEDIAF agrees with the AAFCO on the nutritional requirements of dogs and cats
mentioned above and also provides the energy requirements of the dog at different
stages of growth; these are shown in Table 5 .

Table 5. Energy requirements in dogs according to their life stage

n= number of puppies;
L= 1.5 in week 1 of lactation; 0.95 in week 2; 1.1 in week 3 and 1.2 in week 4
Adapted from FEDIAF (2013)

2.2.5. History of commercial dog food

According to Case et. al (2001), the first marketed dog food was a biscuit produced and
sold in 1860 by James Spratt, an American living in London; According to the Pet Food
Institute of the United States or Pet Food Institute, in its language of origin (PFI, EU,
2014), said food consisted of a biscuit made with wheat, beets and beef blood and was
called Spratt's Patent Meat Fibrine Dog Cakes.

According to Case et. al (2001), after its success in England, Spratt began selling its
product in the United States. Beginning in the 1900s, several groups noted Spratt's
success and began developing and selling other pet foods. The Chappel brothers
manufactured the first canned foods called Ken-L-Ration and introduced dry food in the
1930s.

According to Case et. al (2001), dry foods did not become widespread until the
development of the extrusion process. In the 1950s, according to the PFI (2014), the
Purina company discovered this innovative concept; The extrusion process consisted of
combining and cooking the ingredients together in liquid form and then being
mechanically pressed by the machine, which expanded the piece of food and then baked
it again.

According to Case et. al (2001), given the limited knowledge about the nutrient
requirements of dogs and cats, the first extruded foods were usually marketed for both
species. The PFI (2014) also states that this situation changed in the 1960s, when the
National Research Council (NRC) developed the first of several nutritional profiles
based on research from leading American universities.

Case et. al (2001) state that as canine and feline nutrition becomes better known,
companies develop diets aimed at specific periods of life, physiological states and
health problems. The growing interest in nutrition and health, according to Case et. al
(2001), has caused many owners, hobbyists and professionals to critically evaluate the
type of food they choose for their animals.

2.2.6. Food allergies in dogs

A recurring problem related to feeding dogs is food allergies or hypersensitivity.
According to Case et. al (2001), food hypersensitivity is an inverse immune reaction to
a food component that usually manifests itself in the form of dermatosis. Some
researchers describe percentages of hypersensitivity that account for 23 - 62% of all
allergic dermatoses and, although the calculated incidence varies considerably, it is
generally accepted that food hypersensitivity is the third most common canine allergy.
Although the presence of a genetic component has not been demonstrated, Case et. al
(2001) state that purebred dogs, German Shepherds and Golden Retrievers seem to be at
greater risk of presenting food hypersensitivity or allergies.

The vast majority of balanced dog foods contain products of animal origin that can
cause food allergies; However, there are ingredients that can cause more than an allergic
problem in dogs, such as meat meal, blood meal, animal fat, among others. So much so
that Aldrich (2002) states that meat meal has brought recurring problems such as bovine
spongiform encephalopathy and raises concern about outbreaks of diseases such as foot
and mouth disease.

On the other hand, Weisman (2002) points out that chickens, pigs, lambs, cows and
turkeys have lean muscle intended for human consumption; and that the leftovers,
known as by-products (heads, intestines, hooves, beaks, ligaments and cysts) are used
for animal feed. Weisman (2002) also states that it is not a requirement, furthermore, to
define the health of the animals used in the formulation; That's how, pet food companies
can put sick chickens and lambs in their food without any problems.

Due to the aforementioned problems, Rainbird (1989) states that it is possible to keep
dogs perfectly healthy with rations that do not contain meat, and are composed of
chemical products that provide proteins as independent amino acids or as mixtures of
amino acids. Likewise, it highlights the fact that dogs can receive an adequate supply of
nutrients in different forms, and that no single food is necessarily the best or most
suitable for them.

2.2.7. Types of dog food

Nutral SA (1990) states that dog foods are classified as:

 a) Dry foods: according to Nutral (1990), with a moisture percentage of 6-10%, dry
dog foods are presented in extruded form, are more economical than canned
foods and, although they have lower digestibility than these, they prevent
accumulation of dental tartar and can be administered daily. According to Case
et. al (2001), the most common ingredients of dry foods are cereals, meat,
poultry or fish derivatives, dairy products, and vitamin and mineral supplements.
Walker (1980) highlights its maintenance for long periods of time without the
need for refrigeration in temperate climates.

b) Semi-moist foods: according to Nutral (1990), they have between 23% and 40%
humidity. However, Case et. al (2001) state that they contain from 15% moisture
and their main ingredients are fresh or frozen animal tissues, cereals, fats and
simple sugars. Likewise, he adds that their texture is finer than that of dry foods,
which improves their acceptance and palatability and they are attractive to some
owners since they generally smell less than canned foods and are presented in
convenient portion presentations. According to Nutral (1990), this type of food
does not require refrigeration and its cost is similar to that of canned foods.

c) Canned foods: Nutral (1990) claims that they are the moistest foods on the
market with a humidity index of between 68% and 78%. Canned foods provide
more calories per kilogram than dry foods; However, its high protein content
means that its intake is not recommended for long periods of time as it causes
greater kidney work. Case et. al (2001) state that there are two types of canned
foods: complete ones and supplements or treats; both may contain a mix of
ingredients such as meats, poultry or fish by-products, grains, textured vegetable
protein, and vitamins and minerals. Walker (1980) states that, like dry foods, it
is possible to keep them unrefrigerated for a long time in temperate climates.

On the other hand, according to Case et. al (2001), balanced dog food can be classified
into:

 Popular or Main stream: regular balanced food.

 Premium: food made with high quality or hypoallergenic ingredients.
 Generic: economical balanced food

2.3. CONCEPTUAL FRAMEWORK

 Linoleic acid: essential fatty acid found in oils of plant origin (MRL, 2000).

 Fatty acids: organic compounds that form lipids (FAO, 2012).

 Amino acids: basic units that, joined together, give rise to proteins. Non-
essential amino acids can be obtained through the diet or synthesized by the
dog's body. Essential amino acids must be provided with the animal's diet (Case
et al., 2001).

 Extrusion: process by which raw materials are transformed into a type of tube
by the combination of humidity, pressure, heat and mechanical force, and which
is widely used to produce dry pet food (FEDIAF, 2013).

 Foot and mouth disease: viral disease of cattle, pigs and other cloven-hoofed
animals. This disease is spread through direct contact with infected animals,
through the air or through contaminated objects (CFSPH, 2006).

 Focus Group: An in-depth, unlimited group discussion lasting between one and
two hours that explores a specific list of topics on a predetermined and limited
topic (Robinson, 1998).

 Market: set of all real and potential buyers of a product or service (Kotler,
2003).

 Metabolite: series of intermediates that are part of metabolic pathways

(Lehninger et al, 1995).

 Monomer: small units that repeat forming polymers (LG Wade, Jr, 2004).

 Nitrogen: chemical element essential for life whose net loss or gain in the dog's
body indicates the increase or decrease in total body protein reserves (Case et al,
2001).

 Product: anything that can be offered to a market for attention, acquisition, use
or consumption and that could satisfy a want or need. It includes physical
objects, services, people, places, organizations and ideas (Kotler, 2003).

 Competitive advantage: advantage over competitors that is gained by offering

consumers greater value, either through lower prices or through greater benefits
that justify higher prices (Kotler, 2003).
 III. MATERIALS AND METHODS

In this chapter, the author explains how the research was carried out, the field of study,
the hypotheses to be tested, and the analytical techniques and procedures used.

3.1. MATERIALS

In this research work, the following materials were used:

 Computer
 Tape recorder
  Printer
 Phone
 Office supplies
 Reference books
 Scientific reports
 Government reports

3.2. PLACE OF INVESTIGATION

The investigation covers the province of Trujillo, department of La Libertad, as shown

in Figure 8.

Figure 8. Trujillo
city map
SOURCE: National Directorate of Citizen Civic Education and Training (DNEF)

The city of Trujillo, according to the General Directorate of Medicines, Supplies and
Drugs (DIGEMID), is made up of 11 provinces: Trujillo, El Porvenir, Florencia de
Mora, Huanchaco, La Esperanza, Laredo, Moche, Poroto, Salaverr, Simbal and Victor
Larco Herrera. The present research work covers the city of Trujillo which, according to
the INEI (2014), is made up of the province of Trujillo.

3.3. DEFINITION OF THE FIELD OF STUDY

The field of study of this research includes people who have at least one dog at home in
the city or province of Trujillo.
3.4. METHODOLOGY

3.4.1. Kind of investigation

This marketing research has characteristics of both exploratory and descriptive research.
The present research is exploratory because, according to Hernández et. al, (2006), the
objective is to examine an understudied research topic or problem; These types of
studies are common, especially in situations where there is little information, such as in
the case of dog food made from ingredients of plant origin. Likewise, it also falls within
the descriptive classification since, according to the UNALM thesis regulations (2014),
it is limited to describing certain characteristics of the group of elements analyzed, as
well as situations of the phenomenon under study.
Hernandez et. al (2006) state that, just as exploratory studies fundamentally serve to
discover and prefigure, descriptive studies are useful to show the angles and dimensions
of a phenomenon, event, community, context or situation. What this research work
seeks is to expose the existing value chain, without altering the characteristics and
conditions found; In the same way, it lacks predictive character.

3.4.2. Design of the investigation

The Research Design to be followed in the study was of a non-experimental type that,
following what is established in the UNALM thesis Regulation (2014), includes
descriptive research, since the author did not seek to intervene or alter the course of an
event; It was only limited to observing the course of said event in the groups with the
characteristics to be studied and without them.

Due to the scarcity of information and the tiny size of the dog food market made from
ingredients of plant origin in the city of Trujillo, the existing information on balanced
food in general was taken as a reference throughout the work with the objective to
provide the reader with a broader view of the balanced dog food market. For the same
purpose, hypoallergenic dog food was also taken as a reference.

The specific objectives (approximation of the canine population and estimation of the
supply and demand of dog food made from ingredients of plant origin) were met
through the application and analysis of qualitative estimation methods.
Through the analysis of Porter's 5 forces of regular, hypoallergenic food made from
ingredients of plant origin, the market conditions faced by companies were established
and the causes of the low supply of dog food were determined. made from ingredients
of plant origin.

Finally, a simulation was carried out for a small company that ventures into the dog
food market made from ingredients of plant origin, establishing recommended
guidelines for future investors in the industry of the city of Trujillo.

3.4.3. Limitations

 There are no official figures on the dog population in the city of Trujillo. Only
some municipalities have dog registration in their districts and this does not
 imply that all dogs are registered by their owners; That is, there is a gap between
municipal data and reality.

 Records about dogs and their health status in Peru are practically non-existent.
The last official work on estimating the canine population in Metropolitan
Trujillo was carried out in 1973 and a census has never been carried out in our
capital city or in the country.

 There are no official statistical data on the internal production of balanced dog
food. All official statistical information refers to pet food in general.

 The scope of the investigation is limited to a single product, balanced dog food
made from ingredients of plant origin in the city of Trujillo, in different
presentations.

 The investigation was carried out in the city or province of Trujillo. The data
collection instruments were used in the districts with the highest percentage of
the population belonging to Socio-Economic Levels “B” and “C” (established
market niche for dog food made from ingredients of plant origin).

 The vegetarian and/or vegan population - who would be the main buyers of the
food under study - is not quantified and there is no figure or population estimate
in the country.

3.4.4. Phases of the research process

Figure 9. Phases of the research process

PHASE 1
Pet food market situation

Dog food market made

Pet food market in Balanced dog food market from ingredients of plant
Trujillo, and the world. in Trujillo, Peru and the origin in Trujillo, Peru and
world. the world.

PHASE 2
Collection of primary information in the city of Trujillo
 Conducting interviews Conducting surveys Conducting Focus Group

PHASE 3
Information analysis and diagnosis

Value chain and Estimation of supply, Porter's 5 competitive

Marketing Mix demand and dog forces
population

Simulation and
recommended guidelines Conclusions recommendations
for investors
This research had 4 main phases; These are shown in Figure 9 and were developed as
follows:

Phase 1. Investigation of the situation of the pet food sector in Trujillo, Peru and the
world based on:

 Collection of secondary information on the pet food market.

 Collection of secondary information on the balanced dog food market in general.

 Collection of secondary information on the market for balanced dog food made
from ingredients of plant origin.

Phase 2. Collection of primary information based on:

 Conducting interviews/visits to 18 markets and/or supply centers.

  Conducting surveys with 151 dog owners.

 Conducting a Focus Group with 8 dog owners.

Phase 3. Analysis of information on regular, hypoallergenic food made from ingredients

of plant origin in the city of Lima and description of:

 Value Chains and Marketing Mix.

 Estimation of Supply and Demand and calculation of the population of dogs as

pets in the city of Trujillo.

 Analysis of Porter's 5 competitive forces.

Phase 4. Analysis and presentation of consolidated results in:

 Simulation for a small business and recommended guidelines for investors.

 Conclusions.

 Recommendations.

3.4.5. Hypotheses raised

a. General hypothesis

The critical factors of the value chain of balanced dog food made from ingredients of
plant origin in the city of Trujillo are explained by the divergence between the supply
chain and market demand.

b. Specific hypotheses
  The primary activity of Marketing and the support activity of Supply of raw
materials are determining factors for the success of companies producing
balanced dog food made from ingredients of plant origin in the city of Trujillo.

 The most important aspects of the Marketing Mix of balanced dog food made
from ingredients of plant origin in the city of Trujillo are the Place and the
Promotion.

 The low supply of balanced dog food made from ingredients of plant origin in
the city of Lima is due to the lack of a specialized distribution network and the
high prices of raw materials that are used as a source of protein.

 There is a significant population of dogs in the city of Lima that constitute an

attractive market niche.
 The demand for balanced dog food made from ingredients of plant origin in the
city of Lima opens new business opportunities and its main critical factor is the
presentation of the final product.

3.4.6. Operational definitions

a. Dependent variables

Y1 . Food purchase provision

Y2. Food sales

b. Independent variables

X1. Approximate canine population

X2 . Input suppliers
X3 . Food promotion.
X4. Food distributors.
X5 . Food prices.

3.5. INFORMATION SOURCES

Primary and secondary sources were used to collect data for this research:

 Primary Sources: visits and interviews with the personnel in charge of the
Supermarkets, markets/supply centers, and Focus Group, which will be
explained in section 3.6.

 Secondary Sources: secondary sources include empirical studies, various reports

from individuals and government organizations, official documents from the
Ministries of Agriculture and Health, municipal records, market studies, books
for students and professionals, the Internet, specialized magazines, theses,
among others. others.

3.6. DATA COLLECTION INSTRUMENTS

For this research, different data collection techniques and instruments were used; These
were applied to establishments and people residing in the districts with the highest
percentage of the population belonging to Socio-Economic Levels (SES) “B” and “C”.
The choice of said NSE as the target market for food made from ingredients of plant
origin is due to its importance in the city of Trujillo, its high level of income, level of
education and breeds of dogs residing in the homes.

The data collection instruments used were surveys of dog owners, visits and interviews
to markets/supply centers and Focus Group.

3.6.1. Main survey

The main survey was developed through 16 closed dichotomous and multiple choice
questions in the month of November 2018, of which 11 questions aimed to find out the
consumption habits and preferences of dog food buyers: attributes and presentation of
the product. product, place and usual purchase price, among others. The remaining 5
questions were asked in order to find out the willingness to purchase and the desired
characteristics in a vegetarian/vegan product for dogs.

The sample size was 151 dog owners and the information collected was used to:
  Estimate the demand for dog food made from ingredients of plant origin in the
city of Trujillo.

 Find the current Marketing Mix of regular, hypoallergenic food made from
plant-based ingredients for dogs in the city of Trujillo.

 Carry out a simulation on a company that produces food made from ingredients
of plant origin and provide a recommendation on the guidelines to follow by
future investors in the city of Trujillo.

3.6.2. Interviews
3.6.3. Visit to markets/supply centers
3.6.4. Focus Group

On November 18, 2018, a group was formed made up of 4 people who have at least one
dog at home, with an age range of between 20 and 50 years and residents of the districts
chosen for having the highest percentage of the population belonging to the SES “B”
and “C”.

The objective of the Focus Group was to know the opinion of buyers about the existing
dog foods in the Peruvian market and their preferences, as well as the problems that
these can cause in their dogs. In the same way, we sought to know the neglected needs
of dogs and their owners. Information about the participants and the full transcript of the
Focus Group can be found in Annex 1.

Said information collected in the Focus Group was used to:

 Find the current Marketing Mix of regular, hypoallergenic food made from
plant-based ingredients for dogs in the city of Trujillo.

 Carry out a simulation on a company that produces food made from ingredients
of plant origin and provide a recommendation on the guidelines to follow by
future investors in the city of Trujillo.
3.7. METHODOLOGICAL TECHNIQUES

In order to carry out a complete analysis of the dog food market in the city of Trujillo,
the author used, in addition to Porter's value chain and 5 competitive forces, the
Marketing Mix or analysis of the 4 P's for food. regular balanced, hypoallergenic and
vegetarian for dogs.

Subsequently, a simulation was carried out for a small company that produces and
markets dog food made from ingredients of plant origin, which includes the
recommended Marketing Mix, the SWOT analysis and the Internal Factors Evaluation
(EFI) matrices. and Evaluation of External Factors (EFE) that investors should consider
when considering their commercial strategies.

IV. DISCUSSION AND RESULTS

In the next chapter, the results are presented based on the objectives set out in
Chapter 1. In order to achieve them, various methodological tools were analyzed for
regular food, hypoallergenic food and food made from ingredients of plant origin;
This was necessary because the little information and limited supply of the food
under study in the city of Trujillo do not allow the reader to understand the real
dynamics of the market. Thus, regular and hypoallergenic foods were taken as a
reference throughout this research work.

First, the aforementioned food value chains were described and the critical activities
in each of them were identified. The main finding was that the critical activities of the
dog food Value Chain in general are the distribution methods (External Logistics) and
the choice of marketing establishments (Marketing); Likewise, the most important
support activity is the Supply of inputs.

Then, the Marketing Mixes of the three foods analyzed were studied and it was found
that the determination of Place and Promotion significantly influences the success of
the business, thus coinciding with the results of the Value Chain analysis.

Subsequently, work was done to achieve the last three specific objectives. The first
important finding was that there are no reliable records on the canine population in
our city due to the lack of a census or current population estimate; Therefore, the
calculation of the dog population was carried out with the help of indirect population
evaluation methods and it was obtained that the estimated average dog population is
between 1,393,000 and 1,560,000 dogs in the city of Trujillo.

Likewise, there is no historical information on the supply and demand of balanced

dog food in the city of Trujillo; Therefore, qualitative estimation methods were used
and it was found that the supply of dog food made from ingredients of plant origin
was approximately 60 tons in 2014 and that the estimate of the demand for said food
is made up of at least 80,500 dogs in the city of Trujillo.

On the other hand, in order to describe market conditions, Porter's 5 Competitive

Forces were analyzed. The main results were that both the barriers to entry into the
industry and the threat of substitute products are high.

Finally, a simulation of the start-up of a dog food company made from plant-based
ingredients in the city of Trujillo is presented, where guidelines are recommended for
future investors and possible internal and environmental factors are analyzed. that
would determine the success or failure of the business. The research indicates that the
product under study opens business opportunities and that it has the necessary
qualities to be successful in the Trujillo market.

A summary of these results is presented in Table 6. Furthermore, the Consistency

Matrix can be found.
 Table 6. Summary of Results
Main goal Main Hypothesis
The critical factors of the
Identify and evaluate value chain of balanced
the critical factors of dog food made from
the value chain of plant-based ingredients in
balanced dog food the city of Trujillo are
made from ingredients explained by the
of plant origin in the divergence between the
city of Trujillo. supply chain and market
demand.
Results
 The value chains of regular, hypoallergenic and plant-based dog food
remain practically constant and it was found that the differentiating
factor and the success of the business depend on the distribution
mechanisms of the final product (External Logistics) and of the choice
of commercial establishments according to the financial support that
the company has (Marketing).
 To give greater reliability to these results, the Marketing Mix was
analyzed and it was found that the way of reaching the final buyer
(Plaza) represents a clear differentiating factor, thus coinciding with
what was found in the analysis of the Value Chain.
 The divergence between the supply chain and market demand is due to
the lack of identification of a neglected market niche and the
application of marketing strategies aimed at satisfying it. Therefore,
the proposed hypothesis is ACCEPTED.
Continuation

Objective 1 Hypothesis 1 Results

The primary Marketing

activity and the Supply
Identify support activity of  The most important primary activity in the value chain of dog food
raw materials are made from ingredients of plant origin in the city of Trujillo is
the primary and most decisive for the success Marketing, as mentioned above.
important support of companies that
activities in a company produce balanced dog  The most important support activity of the value chain of dog food
that produces balanced food made from made from ingredients of plant origin in the city of Trujillo is the
dog food made from ingredients of plant Supply of inputs, even more so when economies of scale are sought
ingredients of plant origin in the city of (regular foods).
origin in the city of Trujillo.
Trujillo.  The proposed hypothesis is ACCEPTED.
Continuation

Objective 2 Hypothesis 2 Results

The most important

Study the existing aspects of the Marketing  The Plaza ensures the degree of availability of the product to buyers,
Marketing Mix of Mix of balanced dog while the Promotion ensures that the attributes of the product are
balanced dog food food made from transmitted according to the target market niche; Both aspects are
made from ingredients ingredients of plant important in the Marketing Mix of dog food made from ingredients of
of plant origin in the origin in the city of plant origin in the city of Trujillo.
city of Trujillo. Trujillo are the Place and
the Promotion.
 Therefore, the proposed hypothesis is ACCEPTED
Continuation

Objective 3 Hypothesis 3 Results 3

The low supply of
balanced dog food made
from ingredients of plant
Identify the current origin in the city of
offer of balanced dog Trujillo is due to the lack
food made from of a specialized
ingredients of plant distribution network and
origin in the city of
the high prices of raw
Trujillo.
materials that are used as
sources of protein.
 The supply of dog food made from plant-based ingredients in the city of
Trujillo was approximately 60 tons in 2014.
 The supply of hypoallergenic dog food in the city of Trujillo is
estimated at 3,145 tons in 2014.
 The supply of regular balanced food for dogs in the city of Trujllo is
estimated at 49,555 tons in 2014.
 The low supply of dog food made from ingredients
of plant origin is due to the lack of significant specific demand.
Therefore, the proposed hypothesis is REJECTED.
Continuation

Objective 4 Hypothesis 4 Results

 The canine population registered for 2014 in the city of Trujillo,

according to DIGESA, was estimated at 732,642 individuals.

 The minimum canine population in the city of Trujillo for 2014 is

There is a significant estimated at 1,114,000 dogs.
Provide an approximate population of dogs in the
 The maximum dog population in the city of Trujillo for 2014 is
of the dog population city of Trujillo that estimated at 2,628,000 dogs.
in the city of Trujillo. constitute an attractive
market niche.
 The average canine population in the city of Trujillo for 2014 is
estimated between 1,393,000 and 1,560,000 dogs.

 Therefore, the proposed hypothesis is ACCEPTED

Continuation

Objective 5 Hypothesis 5 Results

 The demand for dog food made from ingredients of plant origin and
hypoallergenic food was made up of an estimated minimum of 80,508
dogs in 2014. Likewise, it was found that said demand for food, in
The demand for balanced
tons, was at least 15,245 in 2014.
dog food made from
Estimate the current
ingredients of plant
demand for balanced
origin in the city of  The demand for regular dog food is made up of an estimated minimum
dog food made from
Trujillo opens new of 156,263 dogs in the city of Trujillo for the year 2014.
ingredients of plant
business opportunities
origin in the city of
and its main critical
Trujillo.  Therefore, the proposed hypothesis is PARTIALLY ACCEPTED since
factor is the presentation
the interviews and surveys carried out (Annexes) demonstrate that the
of the final product.
main critical factor is the formulation of the food.

Own elaboration
 IV.1 ANALYSIS OF THE VALUE CHAIN

In order to describe the Value Chain of dog food made from ingredients of plant
origin, we worked only with dry food or in pellet form because the interviews
indicate that it is the product preferred by buyers.

Firstly, the author establishes the activities that are constant in the Value Chains of
regular, hypoallergenic and vegetarian food for dogs; In all of them, it was found that
the distribution of the final product and marketing strategies are critical activities that,
with liquidity and good financial support, allow the product to reach more buyers
and, therefore, promote the success of the organizations.

Subsequently, the particular activities of each of the three Value Chains analyzed are
presented.

The sources of information were: regulations of various government entities, visits to

dog food plants and marketing establishments and interviews with businessmen,
veterinarians and industry specialists.

The most notable findings are summarized in Table 7 and the Value Chain scheme
that is constant for the three types of dog food is shown in Figure 11.
 Table 7. Summary of Dog Food Value Chains

Primary activities Support activities

Balanced food
for dogs in - Service only in machinery maintenance
general: constant Internal and External Logistics and Operations regulated - Supply of inputs is critical
activities by the Ministry of Health - underdeveloped technology
- Basic Business Infrastructure

- External Logistics: Own and outsourced

Regular dog food distribution.
- Marketing: in supermarkets, markets and - Sales force training
some veterinary/pet shops with aggressive
promotion strategies and
establishment of low prices.
Hypoallergenic dog
food - External Logistics: Own distribution.
- Highly specialized supplies
- Marketing: in veterinary/pet shops
- Sales force training according to target market
with promotion strategies based on benefits
niche
and establishing high prices.

Vegetarian dog - External Logistics: Own distribution.

food - Marketing: in veterinary/pet shops and - Obtaining critical vegetable protein (soy)
markets with little promotion and low price - Sales force training
establishment.

Figure 11. Balanced dog food value chain

 INFRASTRUCTURE

Administrative support, accounting support, operations support, marketing and sales support

HUMAN RESOURCES MANAGEMENT

Hiring, management and training of personnel

TECHNOLOGICAL DEVELOPMENT
Information Technical Information
systems support, quality systems
support
CATERING
Supply of raw
Transportatio Transportatio Desk supplies and
materials and
n supply n supply furniture
machinery
LOGISTICS LOGISTICS
OPERATIONS COMMERCIALIZATIO SERVICE
INTERNAL EXTERNAL
N

Reception, Packing,
Preparation: own evaluation and Processing storage and Election of the place, Technical
sales force, promotion, support
storage food distribution of advertising,
of subjects product
cousins finished
 IV.1.1 Value chain of balanced dog food in pellet form (constant)

The Value Chain activities that are constant for regular food in the city of Trujillo are
illustrated below.

PRIMARY ACTIVITIES

a. Internal logistics

The primary activity of Internal Logistics ensures the efficient transportation and
storage of supplies. According to the General Director of DIGESA, Mónica Saavedra
(December 2014), all raw material transportation processes must follow the
regulations indicated in Titles IV and V of the Regulation on Sanitary Surveillance
and Control of Food and Beverages. In any case, Internal Logistics activities are
carried out directly by the company.

The raw materials warehouse and its location may vary. However, the acquisition or
rental of a warehouse is necessary because, according to SENASA's Livestock Inputs
veterinarian, Jhony Angulo (June 2014), said entity requests information about the
warehouses used by companies and carries out inspections to verify compliance with
the guidelines established by civil defense and by the aforementioned Regulation on
Health Surveillance and Control of Food and Beverages.

b. Operations

The Operations activity includes the processing of inputs, drying and packaging of
the product. The flow of processes necessary for the production of any balanced food
for dogs, according to Luis Salazar (2008), is explained in Figure 12. This flow is
also regulated by the Ministry of Health, according to Mónica Saavedra (2014),
through Chapter IV of Title IV of the Regulation on Sanitary Surveillance and
Control of Food and Beverages.
Figure 12. Simplified flowchart for the production of dog food

Heavy

Grinding
 Source: Salazar, 2008
Preparation: Own

The duration of the complete operations flow will depend on the capacity of the
machines used, the nature of the inputs and the volume of final product desired. The
suitable machines for processing can be purchased at high prices in the Trujillo
market; However, feed processing can also be outsourced.
c. External logistics

External logistics includes collection, storage, order receipt and physical distribution
of the finished product. Regarding the collection and storage of the finished product,
this depends on the location of the plant and the warehouse. Both the conditions of
the warehouse and the delivery vehicles depend on the size of the production and
must comply with the provisions of Titles IV and V of the Regulation on Health
Surveillance and Control of Food and Beverages.

It was found that the receipt of orders is done through email, telephone or in person
and depends on the size of each organization. The physical distribution of the product
is a critical activity and varies depending on the volume of production and the
financial support of each organization: the smallest companies, also called artisanal,
carry out the distribution of food in their own vehicles, as the author confirmed in his
visit to the Happy Can EIRL company plant (2014); On the other hand, larger
companies with greater liquidity such as Rinti SA, in addition to using their own
vehicles, use independent zonal distributors, as was found during the visit to the plant
and interview with their Production Manager (2014). These distribution methods will
be explained later in the different value chains analyzed.

d. Commercialization

The Marketing or Marketing and Sales activity includes channel selections,

promotion, advertising and sales force. Due to the strong competition and
characteristics of the balanced dog food market, marketing strategies will define the
production volume and, therefore, the other primary activities such as Internal
Logistics and Operations. Likewise, this activity will define the competitive
advantage of each company.

According to what was found, marketing strategies are chosen based on the financial
support of each company and the market niche to which the product is oriented. Table
8 shows a summary of the conditions established by each distributor/marketer.
Table 8. Summary of conditions by marketing channel

Conditions of
Square Margin of gain Minimum
pay stock

Veterinarians/ 22% - 35% of the sales

30 days According to
pet shops* price demand

41% - 47% of the sales

Supermarkets** 75 - 120 days 300 bags
price

Markets/supply 10% – 19% of the

30 days According to
centers*** sales price demand

Source: Rescued interview, survey and focus group

Preparation: own

SUPPORT ACTIVITIES

e. Service

It includes activities such as machinery maintenance and product adjustment (after-

sales service). The most important activity is the maintenance of the machinery since
its correct operation will ensure adequate processing.

No evidence of after-sales service was found in companies that produce and/or

market regular, hypoallergenic food made from plant-based ingredients for dogs,
except in the case of returns.

f. Catering

It focuses on the purchase of raw materials, supplies, furniture, among others. All
supply activities remain constant for any dog food manufacturing company;
However, it is important to emphasize that the purchase of machinery is not essential
since processing can be outsourced to various companies, such as Happy Can EIRL
and Abales SAC, who provide this service for an average of one thousand new soles
per ton.

Thanks to the research carried out, the author can affirm that the purchase of inputs is
the most important supply activity; However, the acquisition of basic inputs does not
represent a problem since they are very diverse and easily available in the market.
According to the latest Registry of industrial companies - 2007 Census - of the
Ministry of Production, in Metropolitan Trujillo there are 89 companies that produce
milling products, 207 companies that process and preserve fruits, legumes and
vegetables, 145 companies that process and preserve fish, 132 meat production,
processing and preservation companies.

On the other hand, Engineer Valentino Arnaiz, Regional Technical Manager of the
Montana company (May 2014), stated that all recognized brands of dog food use a
nutritious mixture in their formulation, created through specialized software, which
ensures the of nutrients desired in the final product; This mixture is easily accessible,
but its initial cost is high (over a thousand US dollars, according to what was found in
the research). Likewise, according to Arnaiz, any type of dog food requires the
addition of a fungicide to prevent the growth and proliferation of fungi; Its required
percentage is less than 1% of the total formula, so it does not significantly affect the
cost, but it is of great importance. Said fungicide is also easily accessible and low
cost.
Finally, according to Jhony Angulo, SENASA veterinarian (June 2014), it is essential
that all inputs used in the production of dog food have quality and health certificates
granted by SENASA or allied entities.
g. Technological development

The technological level involved in the processing of balanced dog food is low
because the flow of operations is standard in any type of product and various types of
machinery can be used; Likewise, the formulas remain constant for long periods of
time. This is why the author can infer that little technological development is
necessary to produce balanced dog food.

Other activities that use technology in a dog food company are the installation of
machinery and the development of virtual information (web pages and social
networks); These activities remain constant in the 3 value chains analyzed and do not
represent a significant level of complexity.

h. Human resources management

Human Resources Management brings together the activities of selection, hiring and
development of personnel. The presence and market knowledge of sellers, promoters
and public relations managers is very important since they are the ones who will
choose the market niche, the channel and the ideal promotion for each brand and type
of dog food.

i. Business infrastructure

The basic infrastructure of a balanced dog food manufacturing company includes the
administrative, accounting, processing, and marketing and sales areas. As mentioned
above, solid financial planning is needed to allow timely supply and waiting for
payments from each distributor/marketer (Supermarkets, markets, veterinary clinics
and/or pet shops).
 IV.2 MARKETING MIX

Firstly, the Marketing Mix used by regular and hypoallergenic dog food was
analyzed, due to its abundance and greater availability of information in our city.
Subsequently, thanks to the research and the similarities between the different
products, the author was able to find the current Marketing Mix of the food made
from plant-based ingredients for dogs in the city of Trujillo.

To describe the Marketing Mixes or 4 P's of regular, hypoallergenic and vegetarian

dog food, the author used the results of surveys, visits and interviews and the Focus
Group. The information found shows that the choice of marketing establishments
(Plaza) is decisive for the success of the product, thus reaffirming what was found in
the analysis of the Value Chain. Likewise, inconsistencies were found in the current
Marketing Mix of vegetarian dog food, such as the choice of markets as marketing
centers and the establishment of low prices, similar to regular food.

In Table 9, the author presents a short summary of the Marketing Mixes or 4 P's of
the balanced dog foods under study.
 Table 9. Marketing mix of regulated, hypoallergenic and vegetarian food

Product Squa Prices Promotion

re
Standard, there is no
real nutritional Supermarkets,
Regular dog food
differentiation, markets, veterinary Low Aggressive
presentation in all clinics, pet shops
the sizes
Highly differentiated
Hypoallergenic food
by inputs and Veterinarians Based on benefits,
for High
nutritional content, and/or pet word of mouth
dogs
various presentations shops
Moderately
Food vegetarian differentiated Markets, some Low (similar to
Limited
for dogs by inputs, two veterinarians regular)
presentations

Preparation: own
 IV.2.1 Regular dog food

a. Product
The author found that the characteristics shared by regular balanced dog foods in the
city of Trujillo are:

 Dry food in the form of balls or pellets , ready for consumption, wet food in the
form of pate, and sandwiches or snacks .
 Presentation in polyethylene or polypropylene bags of 3, 4, 7, 8, 15, 17 and 24
kilograms, 100 gram cans. and 200 grs. and in bulk.
 Colorful and eye-catching labeling.
 Made with ingredients of animal and plant origin.
 Free availability.

It was found that the type of balanced food preferred by those surveyed is dry food in
the form of balls or pellets because, as mentioned previously, 99% of dog owners
stated that they use this product for the daily feeding of their dogs.

Regarding the brands of regular dog food, the surveys showed that the most
consumed foods by the Socioeconomic Level of interest for the following work are
Ricocan (Rinti SA) and Pedigree (Master Foods), both with a preference of 19% .

Regular foods are presented in presentations according to age and type of activity.
However, no real differentiating factors were found between them since the
formulations are similar and the nutritional contributions do not present significant
variations; For example, Pedigree meat and vegetable adult food contains similar
amounts of nutrients as Ricocan lamb and cereal adult food.

Regarding the presentation, the surveys showed that there is a high preference for
both small presentations and those with greater capacity; Thus, 26% of those
surveyed say they prefer presentations of between 1 and 3 kilograms, while 23%
usually buy larger presentations, with a capacity of 15 kilograms or more. As all the
dog foods analyzed are sold in presentations of all sizes, the author does not consider
the size of the packaging as a differentiating factor.

b. Square

Regular dog food was found in supermarkets, markets/supply centers, veterinarians

and pet shops throughout the city; That is why availability represents a clear
competitive advantage. However, the choice of the Plaza depends largely on the
financial support and productive capacity of each company since each type of
commercial establishment has conditions that suppliers must meet and different
established payment times, as mentioned in the analysis of the value chain.

Regarding buyer preference, surveys showed that 45% of dog owners purchase food
in Supermarkets. In these establishments, large brands such as Ricocan, Pedigree and
Dog Chow are marketed, which have the productive capacity to fully supply the
premises and the financial support to manage the long payment times established
through a contract.

On the other hand, according to the results of the Focus Group, markets/supply
centers, veterinary clinics and/or pet shops are also considered important marketing
channels because they allow buyers to purchase food in bulk, a fact that provides a
temporary solution and gives the opportunity to purchase pet food in smaller
quantities; In addition, they have more flexible and accessible payment and supply
conditions for small brands/companies. For example, in markets and/or supply
centers, in addition to the best-known brands already mentioned, brands such as
Bandido and Happy Can are marketed, while sales of regular food in veterinarians
and pet shops vary considerably depending on the criteria of their customers. owners
and target market niches of each establishment.

c. Price

In the investigation carried out, it was found that the price per kilogram of regular
dog food ranges between 5 and 12 nuevos soles and varies according to the brand and
the Plaza. Table 10 shows the price range of regular balanced food, as well as
hypoallergenic and vegetarian dog food, so that the reader can view and compare
them. This price range is the result of visiting more than 70 veterinary and/or pet
shops, 19 markets and/or supply centers and the Wong, Vivanda, Metro and Plaza
Vea Supermarkets.

51% of dog owners surveyed stated that they usually purchase regular dog food;
Likewise, 38% stated they made their purchases monthly, while 35% stated they did
so every 15 days.

Regular dog food is characterized by being the cheapest on the market; Therefore, it
can be classified as a consumer product for convenience since, reaffirming what was
established by Kotler (2003), the purchase is frequent and little planning and little
purchasing effort is made.
 Table 10. Price range of dog food in the city of Trujillo

5
0

4
5

4
0

3
5

30

2
5

2
0
Regular balanced food Hypoallergenic food vegetarian food
High regular price (s/. per kg) 12 38 10
Maximum Price (s/. per kg.) 13 45 12
Minimum Price (s/. per kg. ) 4 18 6
Low regular price (s/. per kg. ) 5 20 8

Preparation: own
 d. Promotion

Regular balanced dog food uses aggressive promotion through mass media, such as
radio, television and the Internet; So much so that 56% of those surveyed remember
dog food advertising broadcast on television. There are also numerous advertising
panels, newspaper advertisements and Supermarket inserts in print and online.

Regular food advertising is quite simple and is aimed at touching the sensitive side of
the public to create loyalty towards the brand. Likewise, the work of the promoters in
commercial establishments and social events where dogs and their owners participate
(such as contests and parades) helps the recognition of brands such as Ricocan and
Pedrigree, considered the leaders in the market.

IV.3 ESTIMATION OF THE SUPPLY OF DOG FOOD PREPARED

WITH INGREDIENTS OF VEGETABLE ORIGIN

To meet the first specific objective of the research, an estimate was made of the
current supply of vegetarian food or food made from plant-based ingredients for dogs
in the city of Trujillo. Likewise, the supply of the other types of food mentioned
(regular and hypoallergenic) was estimated to understand the real size of the market.

Adapting Campbell's (1981) concept to the present market research, supply can be
defined as an inventory that shows the quantities of dog food that companies can
produce and keep available to the public at a specific price during a period of time. .
To obtain these estimates, primary sources were used, such as interviews and surveys;
and secondary sources, such as reports from government entities and global
information providers, in order to estimate current supply. Table 11 shows a summary
of the estimates of the supply of balanced dog food in the city of Trujillo for the year
2014.
 Table 11. Estimation of the supply of dog food in Trujillo

Internal Import (t.) Export (t.)

Total (%) Total (t.)
production
(t.)

Vegetarian dog food* 0.04 60 60 - -

Food hypoallergenic for

5.96 3 145 - 3 145 -
dogs**

Regular dog food*** 94 49 553 37 012 12 541 2

Food balanced for

100 52 760 37 072 15 686 2
dogs****
Own elaboration
To calculate the current supply, a series of factors were analyzed which, according to
Semyraz (2006), are:

- Producers: companies that produce/market regular, hypoallergenic and

vegetarian dog food were analyzed.

- Location of producers: internal production for national companies was

analyzed. On the other hand, for foods produced abroad, it was also necessary
to analyze imports.

- Installed and used capacity: no evidence was found that indicates

underutilization of machinery or inputs, so it will not be taken into account.

- Prices: due to the economic stability that the city of Trujillo has experienced in
the last 4 years, there have been no significant changes in prices that affect the
total supply of dog food.

- Expansion plans: the growth of the market in recent years has generated a
sustained expansion of companies; For example, Rinti will inaugurate two
plants in the province in 2015 (Sifuentes, 2014). Therefore, the market is
expected to continue expanding, causing an increase in supply in the long term.

- Fixed investment: varies depending on the production volume of each

company. However, this remains constant for any type of balanced dog food.

- Distribution channels and supply mechanisms: as mentioned above,

distribution can be in-house or outsourced and the marketing establishments are
supermarkets, markets/supply centers, veterinary clinics and/or pet shops.

Thus, the supply estimate was made based on domestic production, imports and
exports of balanced dog food. The analysis carried out is described below.
 IV.3.1 Offer of dog food made from plant-based ingredients

According to the Head of Production of Abales SAC, Alfredo Alegre (2014), the
production of the only food made from plant-based ingredients on the market
(Knino Vegetariano) was 60 tons for 2014.

On the other hand, there are no exports of the product or imports of similar
products. Therefore, the author can infer that the total supply of food made from
ingredients of plant origin is constituted by the production of the Knino Vegetarian
food, which is estimated at 60 tons per year in the city of Trujillo for 2017.

IV.3.2 Regular dog food offer

The entire supply of hypoallergenic dog food is made up of imports since there are
no national companies that produce said product; That is, both internal production
and exports are zero.

Thus, the supply of hypoallergenic food is determined by imports which, according

to Adex Data Trade, were approximately 3,145 tons in 2017.

IV.3.3 Regular dog food offer

a. Imports

According to Adex Data Trade (2014), imports of balanced dog food exceeded 13,640
tons in 2013, showing a growth rate of 15% compared to 2012. However, data on
imports of dog food In 2014 they are not yet available to the public.

Since the country is going through a process of economic slowdown, it was assumed
that the growth rate is maintained. Therefore, it is estimated that balanced feed imports
were 15,686 tons for 2014.

As imports of hypoallergenic dog food were estimated at 3,145 tons, it is estimated

that at least 12,541 tons of regular dog food were imported in 2014.

b. Exports

According to the foreign trade portal Trademap, pet food exports were 2 tons in 2014;
However, there is no disaggregated data by pet species.

Due to the quantities of domestic production and imports, this export figure (which
would range between 1 and 2 tons) does not significantly affect the total supply of
dog food.

c. Internal production

Due to the large number of informal producers and product adulterations, it was
impossible to find the volume of internal production with precision. However,
according to the Plant Manager of Rinti SA, Antonio Sifuentes (2014), his company
owns 75% of the dog food market and its closest competitor, the transnational Mars
(Pedigree), has 17% of the market. . However, both Mars products and those of other
large companies, such as Nestlé and P&G, are imported.

The market share of the most important regular dog food companies, product of the
analysis of the work of Escalante et al. (2011) and the information provided by
Antonio Sifuentes (2014), is detailed in Figure 13 below.

Figure 13. Regular dog food market share by company

5% 3%

17% Rinti SA
 Master Foods

Source: Escalante et al. (2011), Rinti SA Plant Manager, Antonio Sifuentes (2014)

Thus, at least 83% of national production belongs to Rinti, whose sales volume of
dog food in the city of Trujillo was 30,720 tons in 2014. Therefore, it is estimated
that the internal production of regular food in the city of Trujillo was at least 37,012
tons in that year.

Finally, it can be stated that the supply of regular dog food (Domestic Production +
Imports – Exports) is estimated at 49,553 tons in 2014.

IV.3.4 Offer balanced food for dogs in general

a. Imports

As mentioned previously (section 4.3.3), the import of balanced dog food for 2014 is
estimated at 15,686 tons.

b. Exports

The author used the figure of 2 tons per year – Trademap (2015) – as a maximum
estimate of dog food exports.

c. Internal production

The internal production of balanced feed is made up of the production of regular and
vegetarian feed, which is estimated at more than 37,072 tons in 2014.

Finally, it can be stated that the supply of balanced feed in general (Domestic
Production + Imports – Exports) is estimated at 52,760 tons for 2014. This shows
that, according to Official Letter No. 0140-2015-MINAGRI-SG-OACID/TRANSP,
CUT: 39621-2015, the supply of dog food represents at least 63% of the supply of pet
food and indicates the importance of the dogs in our capital city.

IV.4 DOG POPULATION ESTIMATION

Estimates were made according to ecological and statistical methods based on the
secondary information collected and the primary information sources used (surveys
and interviews). The result found was that the average population of dogs in the city
of Trujillo for 2017 is between 1,393,143 and 1,563,250 dogs.

Table 12 shows a summary of the main results obtained.

 Table 12. Estimated dog population in the city of Trujillo (2017)

Number of dogs

DIGESA vaccination records 732 642

Minimum population estimated based on food intake ** 1´114 491

Maximum population estimated based on food intake ** 2´628 799

Average population estimated based on food intake and person:can ratio *** <1´393 143; 1´563 259>

Dog population at country level**** 3´780 000

Sources: * Official Letter No. 495-2015-DHAZ/DIGESA.

** MINAGRI-2015
*** MINAGRI-2015

****Passport database, Euromonitor (2015) Own

elaboration
 IV.4.1 Dog population in Peru

According to the Euromonitor Passport database (2015), the dog population in Peru
amounted to 3,780,000 in 2014, but there is no data disaggregated by city.

IV.4.2 Canine population based on DIGESA vaccination records

According to the veterinary doctor of the Zoonoses area of DIGESA, Rosa Gutierrez
(2015), said entity has canine records that, according to Official Letter No. 495-
2015-DHAZ/DIGESA, amount to 732,642 in the city of Trujillo.

On the other hand, Euromonitor International (2014) and the Plant Manager of Rinti
SA, Antonio Sifuentes (2014), agree that only 25% of the country's dogs consume
balanced food. Because there is no data on this matter by city, this figure was used
as the minimum percentage of dogs fed with balanced food in our city since both
household income and expenses are higher in the city of Trujillo than in the rest of
the country. country (APEIM, 2014).

When this information was analyzed with the previously estimated balanced food
supply, the author observed that each dog would consume 800 grams of food daily.
This is inconsistent since only 7% of dog owners surveyed stated that they fed their
dog more than 750 grams per day. The results of said analysis are presented in Table
13.

Table 13. Demand estimate made with DIGESA figures

 Offer of Population Demand Kg/dog Possible
according to according to
food (Tn) Diary Conclusions
DIGESA (Un) DIGESA (Un)*
-Excessive
supply
52 760 732 642 183 161 0.8 -Population of
dogs incorrect
-High volume of
waste
*Population of dogs that consume balanced dog food according to the Rinti SA Plant Manager
(2014), annex 11, and Euromonitor (2014), which amounts to 25% of the total population

Source: DIGESA (2015), MINAGRI (2015), Adex Data Trade (2014), Trademap (2015),

These inconsistent results could be due to the following reasons:

1. There is an excess supply of balanced dog food.

2. The figures on the canine population provided by DIGESA are only
vaccination records.
3. There is a high volume of wasted food.

In the investigation carried out, it was found that there is no excess supply of dog
food since, if this were the problem, imports would not represent more than 28% of
the total supply. Likewise, no samples of dog food waste were found in our city.

This means that DIGESA data does not illustrate the total population. In this regard,
the director of DIGESA, Mónica Saavedra (2015), clarified in an interview that the
data from said entity are only vaccination records since no work has been carried out
to estimate the canine population in the city of Trujillo since 1972.

IV.4.3 Estimated canine population based on daily food intake

In the surveys carried out, it was found that 75% of dogs consume between 150 and
600 grams of food per day. However, this range is too wide to make estimates, so it
was assumed that it follows a normal distribution, also called coenoclimate.
Therefore, this range was processed into a triangular distribution in the @Risk
program in order to establish the limits, mean and standard deviation.

Subsequently, both the mean (0.375 kilos) and the standard deviation (0.0919 kilos)
were introduced to a normal distribution, obtaining a range of daily food ration per
dog of between 223 grams. and 526 gr. The results of the normal distribution, with a
confidence level of 90%, are shown in Figure 14.

Figure 14. Serving range (in gr.) of food per can consumed daily

Grams
Preparation: own

Together with the range of daily food consumption found, the supply and estimated
total consumption were processed. Finally, it was obtained that the minimum
population of dogs in the city of Trujillo for 2017 is estimated at 1,114,500, while
the maximum population is estimated at 2,629,000 dogs.
On the other hand, the average daily food intake is 375 grams, which would result in
an average dog population of 1,563,250 in 2014. Table 14 shows the population
estimate made according to the total supply found.
 Table 14. Estimated canine population based on daily food consumption

Claimants (number of Estimated total population

Daily ration (grs)*
dogs)** (number of dogs)

Minimu 0.223 657 199 2´628 799

m

Half 0.526 278 622 1´114 491

Maximu 0.375 390 815 1´563 259

m
Source: * Survey results and application of a normal distribution

**Assumption that only 25% of the canine population consumes balanced food from Euromonitor (2014) and the Rinti Plant Manager (2014).

Estimation according to total food supply.

Own elaboration
 IV.4.4 Estimated canine population according to the person:can relationship

One of the methods recommended by Margaleff (1989) to find pet populations is the
person:can index, which coincides with the Journal of Veterinary Sciences (Vol. 30,
No. 3, 2014 • Trujillo – Peru). Based on this estimate, the following was found:

a. In the last International Meeting on advances in the research and

control of Rabies in the Americas (2000), it was found that the
person-to-person ratio is between 10:1 and 6:1 on our continent.

b. According to the Estimation of the canine and feline population in

Metropolitan Trujillo carried out by the Ministry of Health in 1972,
the person: can ratio was 10:1.

c. According to the Health Estimation Analysis of the South Health

Directorate II (2010), the person:can ratio in the districts that make
up said jurisdiction is 7:1, and includes 13 districts such as Trujillo,
La Esperanza, El Porvenir , Huanchaco, among others.

d. The Veterinary Technological Health Magazine (2014; 2: 83-92.),

states that the person:can ratio in the Moche district is also 7:1.

e. According to Report 005138-2014-DHAZ-DIGESA, the person:can

ratio in the district of Laredo for 2014 was 7:1. Likewise, the
General Director of DIGESA, Mónica Saavedra (2014), states that
this relationship can be extrapolated to the city of Trujillo, due to
the demographic and socio-economic similarities that Huanchaco
presents in relation to the city of Trujillo.

The research thus shows that the person:can ratio in 37% of the districts of our city is
7:1. Extrapolating this relationship to the city of Trujillo, the dog population would
be approximately 1,393,143.

IV.5 DEMAND ESTIMATION

Adapting what Campbell (1981) claims to the present research work, food demand
shows the quantities of product that buyers want and can purchase at a specific price
in a certain period of time. Likewise, according to the interpretation of Keynesian
economics (Lawrence, 1988), Demand is equal to Apparent Consumption added to
Unsatisfied Demand, where Apparent Consumption is determined by the following
formula:

C= P + E – M – G - I

Where:
Q: Internal production
E: Exports
M: Imports
G: Government spending
I: Inventory

In the particular case of balanced dog food, government spending is zero since there
are no free feeding campaigns for dogs in the national territory. The same happens for
the Inventory since this is the responsibility of each of the producing and/or
marketing companies.

As mentioned above, there are no historical records on the demand for balanced dog
food. Therefore, subjective estimation methods were used which, according to Sapag
(2007), are useful when the necessary information does not exist or when the
antecedents are not reliable enough to predict the behavior of demand. These
techniques include opinions from experts through market research (customers and
suppliers) with the use of surveys and interviews. Table 15 shows a summary of the
estimated demands by type of food.
 Table 15. Estimation of the demand for dog food in Trujillo (2017)

Estimated daily ration (grs.)* Estimated offer (t.)** Estimated demand (# of dogs)***

Balanced meal 52 760 <236 771; 657 199>

regular food < 223 ; 526> 49 555 <156 263; 433 423>

Hypoallergenic and
3 205 <80 508; 223 776>
vegetarian food

Source: * Surveys of dog owners.

**MINAGRI, Adex Data Trade (2014), Trademap (2015), Rinti SA Plant Manager, interviews.

***Demand estimated based on the 25% of the canine population that is fed balanced food according to Euromonitor (2014) and the Rinti Plant Manager,
Antonio Sifuente.
 V. CONCLUSIONS
1. The dog food made from ingredients of plant origin has the characteristics and
qualities to satisfy the needs of dogs suffering from food hypersensitivity in the city of
Trujillo.

2. The main market niche for food made from ingredients of plant origin in the city
of Trujillo is made up of allergic dogs of Socio-Economic Levels “B” and “C”,
whose minimum calculation includes 80,508 dogs (in mostly purebred dogs such as
Beagles, Schanauzers, Fox Terriers, among others).

3. Only in Socio-Economic Levels “B” and “C” of the city of Trujillo, the unmet
demand for food by dogs suffering from food allergies is estimated at more than
12,000 tons annually.

4. The only brand of food made from ingredients of plant origin in the city of
Trujillo, Knino Vegetariano, is in the introduction stage and it was found that the
offer represents less than 0.05% of the total offer of balanced dog food in the city of
Trujillo, with an approximate production of 60 tons in 2014.

5.The low supply of food made from ingredients of plant origin in the city of Trujillo
is mainly due to the absence of a significant specific demand and the lack of
identification of an attractive market niche (dogs that suffer from food
hypersensitivity) .

6. The most important aspects of the Marketing Mix of dog food made from
ingredients of plant origin in the city of Trujillo are the Place and the Promotion.

7. The critical factors of the value chain of dog food made from ingredients of plant
origin in the city of Trujillo are the distribution methods (External Logistics) and the
chosen sales establishments (Marketing), according to the financial support that each
company has.
8. The most important support activity in the value chain of dog food made from
plant-based ingredients in the city of Trujillo is the supply of inputs, mainly plant-
based protein.
VI. RECOMMENDATIONS
 1. In addition to understanding the market niche of dogs that suffer from food
allergies, food made from plant-based ingredients can satisfy the desires of
vegan and/or vegetarian dog owners or those who are against animal abuse.
This is why establishing alliances with the vegan, vegetarian and anti-
bullfighting communities of Peru would be solid and innovative strategies.

2. Due to the lack of knowledge about the benefits of the food and prejudices about
vegetarian diets, an information campaign is necessary prior to the launch of the
product. The author recommends looking for free television spots and segments
in specialized magazines.

3. The ideal marketing of food made from ingredients of plant origin occurs
through veterinarians. It is important to establish alliances or at least a good
relationship with veterinary doctors so that they can sell and recommend the
product to their patients.

4. The price allocation must be made based on the value perceived by the client
and must range between 9 and 15 soles per kilo.

5. The recommended distribution is through own vehicles to reduce costs in

external logistics activities.

6. Advertising of the product under study can be carried out through social
networks and a large amount of merchandising that ensures brand recognition,
such as cups for food and bags for dog feces with the logo of the food brand.

7. It is recommended to have a sales force trained in animal nutrition, preferably

people with experience in the pet market.

8. Processing can be outsourced during the introduction stage. Likewise, during

this stage inputs can be purchased from large wholesalers since the increase in
prices is not significant for small lots.

9. It is recommended to have more than one supplier of vegetable protein to avoid

failures in Internal Logistics.

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 VIII. ANNEXES

Appendix 1. Operationalization of Independent variables

VARIABLE LEVEL OF TECHNIQUES E

CATEGORIES INDICATOR
GUY NAME MEASUREME INSTRUMENTS
NT
DIGESA canine records Discreet
Minimum estimated canine
population
Minimum daily food ration Keep going
Secondary information,
Dog population
Maximum daily food ration Keep going Interviews and surveys
Maximum estimated dog
population
Total canine population at country level Discreet

Number of suppliers Discreet

Raw material suppliers Secondary information,
Suppliers
Interviews
input prices Keep going
Independent
variable Number of Supermarkets Discreet Secondary information
Supermarkets
Supply and distribution conditions Nominal Interviews

Number of markets Discreet Secondary information

Markets
Supply conditions Nominal Interviews
 Distributors/
Number of veterinary and/or pet shops Discreet Secondary information
Intermediaries

Veterinarians and/or pet

shops Supply and distribution conditions Nominal Interviews

Markets
Interviews and visits
Independent Soles per kilogram Keep going
Prices Supermarkets to sales centers
variables
Veterinarians and/or pet
shops
Type of advertising found Nominal
Secondary information,
Promotion Broadcast media
visits and interviews
Amount of advertising found Discreet
 Annex 3. Operationalization of dependent variables
VARIABLE LEVEL OF TECHNIQUES
CATEGORIES INDICATOR
GUY NAME MEASUREMENT
AND
INSTRUMENTS
Internal production Keep going
Secondary information
Sales Offer Imports Keep going
Dependent and Interviews
variable Exports Keep going

Product knowledge Degree of knowledge of the food Nominal

Purchase disposition Surveys and interviews
Product acceptance Food acceptance degree Nominal
Annex 4. Survey of dog owners and results

a. Determination of sample size

To determine the sample of dog owners to be surveyed, the author used a formula to
determine the sample size for a qualitative variable for an infinite population - when the
total number of observation units that comprise it is unknown or the population is
greater than 10,000- (Aguilar-Barojas, 2005); This is due to the large number of dog
owners belonging to Socio-Economic Levels “B” and “C”.

In the formula, a margin of error of 0.08 was used, an adequate parameter to have a
good estimate, as was a variance of 0.5 (Aguilar-Barojas, 2005). The result of the
sampling was 151 dog owners belonging to SES “B” and “C”, the formula used is
shown below:

2 2
Z σ
n= 2
d
Where:

n = sample of dog owners

Z = level of reliability 𝐧 = 𝟏𝟓𝟏 owners of dogs to be surveyed
σ= variance d= margin of error

b. Survey template

The survey was based on 15 dichotomous or multiple choice questions and is

presented in Table 20.
 Table 20. Survey model for dog owners

1. How do you feed your dogs?

Balanced meal

Homemade food (survey ends)

2. How much food does your dog consume per day

Less than 150 gr.
From 150 to 300 gr.
From 300 to 500 gr.
From 500 to 650 gr.
From 650 to 800 gr.
More than 800 gr.
3. What type of dog food do you buy?

Premium

Regular

Economic
4. What attribute of food do you consider most important?
The ingredients or formulation
The price
The smell
The presentation
Other (specify)
5. What presentation do you purchase?
In bulk
Bag of 1 to 3 kilos
Bag of 4 to 7 kilos
Bag of 8 to 15 kilos
Bag of 15 kilos or more
Canned
Continuation

6. How often do you buy said food?

Daily
Three times per week
Biweekly
Weekly
Fortnightly
Monthly
7. How much do you invest in dog food?
s/. 3 as/. 5 per kilo
s/. 6 as/. 8 per kilo
s/. 9 as/. 12 per kilo
s/. 13 as/. 17 per kilo
s/. 18 and up per kilo
8. Where do you buy dog food?
Warehouses or supplies
Markets
Supermarkets
Veterinarians
other (specify)
9. Where do you receive dog food advertising?
Television
Written advertising
Panels or posters
Social networks and the internet
Veterinarians
Other (specify)

Continuation
 10. What brand of food do you usually buy?
dog Chow
Hills
Master Dog
Mimaskot
Nutram
Pedigree
Pro Pac
Pro Plan
Royal Canin
Ricocan
Others (specify)
11. Does your dog suffer from food allergies?
Yeah
No
12. Do you know about the benefits of vegan food in
cases of allergies?
Yeah
No
13. Would you buy vegan food for your dogs?
Yeah
Maybe
No
14. How much would you be willing to pay for food
vegan for your dogs?
s/. 3 as/. 5 per kilo
s/. 6 as/. 8 per kilo
s/. 9 as/. 12 per kilo
s/. 13 as/. 17 per kilo
s/. 18 and up

Continuation
 15. What presentation of vegan food would you prefer?
2 kilos
4 kilos
6 kilos
8 kilos
other (specify)
16. Where would you prefer to buy vegan food?
Warehouse or supply
Market
Pet Shops
Supermarket
Vet
other (specify)

c. Results

The complete results of the dog owner surveys are set out below:
Annex 5. Methodology and results of the Focus Group

Focus Group Location: Urb. La Alameda Mz.B Lt.26 Trujillo

Date: November 13, 2018
Number of participants: 4
Session duration: 25 minutes
Data analysis: Own elaboration

The Focus Group participants were:

S1: Andre Servat. 31-year-old professional owner of Lucas, a Siberian Wolf breed
dog, resident of La Rinconada.
S2: Consuelo Servat. 45-year-old professional, owner of Max, a Beagle breed dog,
resident of San Isidro.
S3: Jose Parimango. 37-year-old professional, owners of Draco and Zeus, a Golden
breed dog and the other Presacanario, resident of Golf.
S4: Paulo García. 29-year-old professional owner of Slash, a Cocker breed dog,
resident of Andre Razuri.

Below, the author presents a transcript of the most important information that was
found with the Focus Group:

M: What brand of balanced food do you feed your dog?

S4: Slash likes Pedigree, although he also accepts Mimaskot without problems.
S1: I give Eukanuba to Lucas and he does very well, especially with his skin wounds.
S2: Max eats anything (laughs) but we have to be careful at home because he is super
allergic. Generally, we give Nutram allergy but when the cows are thin we opt for the
Pro Plan lamb.
S3: Draco and Zeus also eat anything but the food I usually buy is Pedigree.

M: What do you look for when you go to buy food for your dog?
 S2: Because of Max's allergies we have to take the ingredients into account; definitely
no meat. The price is also important because Max eats for two
S3: Price is also important to me.
S1: The opposite happens to me; I prefer big bags because I don't have time to go to
the supermarket that often. Plus, it's cheaper for me.
S4: Well, I can't pay much attention to the price because of Slash's allergies, so
basically I look for the best formulation

M: Where do you usually buy food for your dog?

S1, S3: In Supermarkets

S2: In veterinary
S4: In markets

M: What presentation do you purchase and how often?

S1: I buy the 15 kilo bag every three weeks

S2: I generally buy the 4 kilo bag of Nutram every two weeks; Otherwise I buy the 8
kilo Pro Pac one monthly
S4: I also buy food every 2 weeks at the veterinarian. I usually buy the 8 kilo bag.
S3: I also buy the 30 kg one but every 3 months.

M: What problems do you find in regular food? Do they have any negative
consequences on your dog?

S2: Yes, the stock market is a problem. Max throws them away so he can eat the balls
(laughs). It would be nice if they had some kind of seal, something like a Ziploc bag. In
addition, familiar foods cause hives to appear all over the body.
S3 : Yes, the seal would be an excellent idea because over time they dry out, even
when I try to close the bag with a hook, and Draco doesn't want to eat them
anymore.

S1: Yes, bags are a problem. Also the smell of some foods, have you smelled
Ricocan? Its smell is horrible
S4: The same thing happens to Terrie. We have had to put a cone on him
thousands of times because the hives drive him crazy and he scratches himself
until he causes worse injuries.

M: Did you know that you can feed a dog vegan food? Would they buy it?

S1: I have never heard of it and I don't know if I would try it, as far as I know the
dog is carnivorous.

S3: I could try it but I have my doubts

S4: Sure, if Terrie accepts it and likes it, I would always buy it.

S2: I would buy it too, especially because it doesn't have meat. If anything, it
would have to be cheaper than Nutram or Hills.
Annex6. Photos and images