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Saxonville Sausage Case Study Analysis

Group 6

Robert Graham Arnold

Jon Hardwick
Rebecca Godwin
Landon White
Grant Guidroz
Chris Gremillion
Jeigh Hymel
Michael Floyd
Donald Derham
Isaac Woo
Christian Frierson
Michael Gvoich
Corey Roblin

Dr. Roger Hinson

Louisiana State University
March 14, 2011

Table of Contents

Subject
Background Information
Goals
Constraints
Central Issue
Alternatives
Competitive Analysis
Best Alternative
Implementation Plan
Executive Summary
Bibliography

Page Number
3
3-4
4-6
6
6-10
10-12
12
13
13-14
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Saxonville Sausage
Background Information
Saxonville Sausage is a private family owned company in Saxonville, Ohio, with 2005
revenues of approximately $1.5 billion. Their main focus is on pork sausage products that are
always fresh. Saxonvilles main product is their bratwurst line, which makes up seventy percent
of their revenues, breakfast sausage that consists of twenty percent of their revenues and their
small Italian sausage line, named Vivio that only makes up five percent.
Unfortunately, Saxonville's sales in bratwursts have been flat and their breakfast sausage line
has been steadily underperforming in the market resulting in a double-digit decline in revenue.
However, the Italian sausage was the one category showing growth across producers in the retail
sausage market, having an annual increasing rate of 9% in 2004 and 15% in 2005. The one area
where they have been consistently increasing is their Vivio Italian sausage line, primarily in the
New England area. Saxonville hired a new marketing director in Ann Banks to "make her mark"
and launch a national Italian sausage brand that Saxonville needed to bring to market in order to
achieve profit objectives for the next fiscal year.
Saxonville Sausage needs a well-thought-out positioning marketing plan to move their
Italian sausage brand to national category leader and match up core values in the hearts and
minds, of consumers with the attributes of a product portfolios to meet their specific needs.

Goals
Successfully launch a national Italian sausage product in order to meet profit objectives for
the next fiscal year.

Choose the best positioning strategy

Establish a connection between the brand and the customers core values

Choose the best positioning strategy: Family Connection, Clever Cooking,

Confidence, Appreciation, Quick and Easy, Tradition

Exhibit 9: Positioning Concept Voting, reveals Family Connection and Clever

Cooking as the top 2

Choose a brand name that appeals to the expanded market

Should Saxonville keep the Vivio name or change to a different name? Saxonville wants
to alleviate concerns about Focus groups revealed that the top-scoring names were
Italys Best, Primo, and Perfecto. Vivio, ranked seventh. Research shows that
there is brand vagueness under the Saxonville flag, because the name Saxonville appears
too German, to produce a quality Italian sausage. The current packaging with Vivio
fresh Italian sausage, and the Italian flag in one corner creates some confusion for
customers. In order to demonstrate innovation and quality within Saxonvilles product, a
new brand needs to be set up to help with the companys positioning. However, such a
move will fail to make use of the existing loyalist that have become accustomed to the
Vivio name.

Constraints

Senior managements lack of marketing orientation

Senior management was skeptical of positioning and referred to it as one of

those business-school buzz words (Moore).

They didnt have a well thought out plan for launching their Vivio product

Management is not willing to discount the products price (Moore).

Management is not willing to discount the products price for initial promotion

Consumer Taste and Preferences

Management needs to consider the change in consumer tastes and preferences.

One of the top global trends is that, Consumers are increasingly choosing
naturally healthy foods such as fruit, vegetables, salads, nuts and yogurt. Fruit is
now Americas second-favorite snack (Haynes).

Misallocation of Resources

Since 2004, brats and breakfast categories across all sausage producers have
been flat nationwide (Moore).

Breakfast sausage resulted in double digit decline (Moore).

Italian sausage was the only group showing annual growth but they havent
dedicated enough resources to it.

Freshness
By branching out nationally, freshness levels may be compromised because of the
time length of delivery to west coast supermarkets.

Cannibalization
Careful consideration must be taken in positioning the Italian sausage line to
avoid cannibalization in Saxonville Sausages other brands.

Timing
With the following years profit objectives in mind, the time line of the launch
should be carefully thought out, and coincide with peak sausage season.

Peak volume season: October- February

Each tactic has to be realized by the slated date for the brands national launch
early in 2007 (Moore).

Before the launch, we have to consider an advertising company to handle a

multifaceted national campaign and the training of regional sales managers and
retailers about how our product is differentiated from the competition.

Central Issue
The central issue facing Saxonville Sausage is the successful launch of a national Italian
sausage brand. The development of a new brand name and positioning strategy will be key to
reaching the target market. The implementation of an effective brand is the most important
problem because the brand is the first thing a consumer can relate to. When a brand taps into
what really matters to customers, customers feel good about using that brand (Moore). The
resolution of the central issue will provide the most benefit to Saxonville by increasing profits of
the Italian sausage brand.

Alternatives
When analyzing the marketing approach there are different choices that have to be made.
Careful thought must be taken to understand which way is the best road for the company. For
Saxonville Sausage and Ann Banks, the new marketing director, they need to focus and develop
a strategic plan before expanding into this Blue Ocean area of the market and figure out a way to
differentiate their product from other companies. The goals have been developed, which include
launching a successful line of Italian sausage and creating a name that appeals to the market to

achieve profit objectives. Three alternatives have been developed to leave Saxonville Sausage
Company to success.

Alternative One

Keep Vivio name

Family Connection Strategy
Our first alternative includes keeping the Vivo brand name when launching it
nationally, and also using the Family Connection strategy. By keeping the name the same they
can build off the success experienced in the regional market from the loyalist they already have.
The Family Connection positioning strategy scored the highest in the quantitative
marketing research and seems to best match up core values of the consumers with the attributes
of the product. Female heads of households are the primary purchasers of Italian sausage. The
value ladder developed from focus group of the target audience revealed that they value: feeding
her family good food, hoping her children have happy memories, making home cooked food that
all will love, not being remembered for doing laundry and nagging, bringing a sense of tradition
to their lives, gathering people together and facilitating their experience, and creating the kind of
home she wants her family to have.
Disadvantages for alternative one would be not doing anything to make the name Vivio
look more Italian to customers. Customers like their Italian sausage to look as authentic and
Italian as possible. If they kept their name and packaging the same then they could possibly lose
the appeal of being an authentic Italian sausage brand to new customers. Another disadvantage
would be not offering coupons or discounted incentives to retailers or consumers. This does not
attract new retailers as well as new customers.

Alternative Two

Change to Primo name

Clever Cooking Strategy
The second alternative is to change the name to Primo Italian Sausage. Primo was one of
the top names when respondents were given 20 brand names including, Vivio and Saxonville,
and asked to select the names that fit best with their ideal Italian sausage product. Vivo scored
seventh. While the Primo name is more popular and could enhance marketing the product,
Saxonville risks confusing and losing the Vivio following by changing the name.
In this alternative the Clever Cooking positioning strategy will be used. This strategy
complements the product because of the versatility of Italian sausage because it can be used in a
number of different ways. Clever cooking also plays to some of the top values of the target
customer such as: using her creativity to come up with interesting meals, knowing about easy
meals she can make quickly. Ann Banks also thinks that it would be easier to provide tactical
support for the Clever Cooking positioning, and that she can better explain away the risk of
cannibalization.
Some disadvantages would be by changing their name to Primo, they would be changing
their already existing customers recognition of their brand, Vivio. A disadvantage of the clever
cooking strategy would be that Saxonville is not able to put recipes on their packaging because
the package is relatively small with limited space for such literature. Non Italian consumers
might not know any versatile methods of preparing the Italian sausage.

Alternative Three

Change to Primo Italian Sausage from Saxonville, Keep Vivio name in

existing market
Family Connection strategy
The third alternative will allow Saxonville to keep the Vivio name in the regional market
where is has had success, but make use of the more popular Primo name in the markets they are
expanding into. This alternative wont confuse the existing loyalist, and will allow them to
appeal more to the broader market. Sub-branding the product using the Saxonville brand will
exploit the perception of quality associated with their other sausages, and give them recognition
on the national stage.
This strategy will capitalize on the benefits of the Family Connection positioning strategy
mentioned above. It should be mentioned that while this strategy runs the risk of being too
generic and easily copied, the risk is mitigated because Saxonville will be the first national
player in this category.
Disadvantages would be losing the customers already loyal to the Vivio name but changing
the name to Primo Italian Sausage from Saxonville would not be significant as if they were to
change the name to Primo. At least they still have the companys name in the title of the sausage.
In this alternative, they are not expanding their Primo Italian sausage boundaries outside the New
England area.

Alternative Four

Expansion of the entire company west to the Mississippi River

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Keep the name Vivio but enlarge the Italian Flag on the packaging
to make it more recognizable that it is Italian Sausage
Offer bulk incentives to dealers and retailers
The advantages of option four is their expansion of all lines of productivity which means
that they can cover more volume and generate more profit. They are expanding into unchartered
territory as far as Italian sausage goes. This would be an example of Red Ocean strategy. Product
expansion will make the marginal value of the product decrease, allowing the company to obtain
more profits from bratwurst and breakfast patty sausage sales or lower prices. Saxonville is also
keeping the name Vivio while retaining the brand name. Keeping the brand name insures the
loyalty of their current customers while attempting to attract new customers. They would be
making the product look more Italian with the increased size of the Italian flag on the packaging
of the sausage. By offering bulk incentives to dealers and retailers, Saxonville is insuring that
their products will reach the shelves of local stores for their customers to enjoy. Also by offering
bulk incentives, Saxonville could offer lower prices to their retailers. With todays competition in
the food industry and threats of new entrants, retailers need incentives to save money anywhere
they can by purchasing Saxonvilles products.
Disadvantages of option four are that the name is still not generically Italian. Primo or
Italians best would have been a better name to start off with instead of Vivio. There will be huge
short term loses due to expansion and dealer incentives with unsure profits from new Red Ocean
markets. Bratwurst and breakfast sausage are still declining in sales volume in the New England
region so the expansion of these product lines could have risks on overall profits.

Competitive Analysis

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The major strengths of Saxonville are manufacturers have experienced the growth in
Italian sausage across the board as well as within our company. Another advantage Saxonville
has is they can be one of the first companies to develop a national Italian Sausage brand, and the
other national players are constricted by their frozen trucks. Their regional competitors have
picked a local positioning strategy hindering their ability to expand and distribute outside their
core geography. When Banks questioned the national sales manager about completion from the
other national giants, he responded, Ann, those guys are frozen producers not freshtheir
distributors drive freezer trucks. It would mean reconfiguring their whole distribution network to
play in this category (Moore). It seems Saxonville would be operating in a Blue Ocean for a
time if they developed a national Italian sausage brand. Saxonville also has the benefit that they
have an established a brand name, which will help launch this new line.
Saxonville also has a few weaknesses that will need to be improved if they want to see
increased future profits. One of the biggest flaws is that of an underdeveloped marketing
department. Saxonville has brought in a new marketing director, Ann Banks, who is helping the
company in implementing a new strategy to grow their Italian sausage line. Another problem is
their inability to gain market share into the Italian sausage line, due to the lack of supermarket
distributors. As of right now, there is no clear way to combat this problem but a few ideas could
be: offer a discount price to retailers, offer bulk discount prices to retailers, or give supermarket
retailers a percentage of profits of the sales they have participated in. Anything that will allow
Saxonville to gain more distributors will help them in the long run.
However, some external threats to Saxonville include substitute products and the threat of
new entrants. As of 2005, Saxonville was ranked sixth out of eight companies in breakfast

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sausage brands. This contributed to the cause of double-digit revenue declines. These declines
and flat lines are symptoms of problems of management. While it seems Saxonville will enjoy a
Blue Ocean for a time in the Italian sausage category, it wont last forever and new entrants
could come in.

Best Alternative
Saxonville Sausages best alternative would be the fourth alternative:

Expansion of the entire company west to the Mississippi River

Keep the name Vivio but enlarge the Italian Flag on the packaging to make it more

recognizable that it is Italian Sausage

Offer bulk incentives to dealers and retailers

Out of all the alternatives we are not changing the name to retain our customers which

will insure brand loyalty. It will help establish a national Italian sausage brand outside the New
England area. By enlarging the Italian flag on the packaging, customers will recognize that it is
authentic Italian sausage and possibly purchase the product for this reason. Unlike alternative
one, alternative four offers bulk incentives to retailers making it easier for expansion. Expansion
allows the company, brand name, and brand equity to obtain more customers and establish a
larger market share. Instead of focusing on clever cooking like in alternative two, they are
allowing the Italian flag itself to sell the sausage. The new name in alternative three is too long
and could possibly confuse loyal customers who go to the grocery store looking for Vivio. These
are the reason that alterative four is the best alternative compared to the other alternatives.

Implementation Plan

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The first part of the implementation plan would be to change the packaging design to
where a large Italian flag is displayed to ensure the authenticity of their Italian sausage. The next
part of the implementation stage would be Saxonville sausage establishing new relationships
with dealers and retailers to ensure that they will have retailers and dealers that will purchase
their products after expansion is complete. Without having the contracts and relationships with
these new retailers, expansion would be extremely difficult if not impossible. The success of this
implementation plan relies heavily on the establishment of agreements and contracts with new
retailers. After these relationships and sufficient contacts have been made, Saxonville would
have to start demanding more resources from its suppliers to be able to produce more sausage.
Once demands from retailers exceed the production capacity of producing in just the New
England area, Saxonville sausage would then have to invest more capital into their infrastructure.
This would include expanding their entire manufacturing capabilities which would include
increasing the amount of inputs; purchasing new property; constructing new buildings and
warehouses; and developing a marketing channel functions to cover the companies transitional,
logistical, and facilitative functions. This ensures that Saxonville sausage will be able to handle
the expansion process while maintaining the quality of freshness that customers expect from
their product.

Executive Summary
Saxonville sausage is a privately owned company with revenues of $1.5 billion. Their
main lines of products are their bratwurst and breakfast patties. They also have an Italian sausage
line that is showing an increase in recent sales. Unfortunately, sales in bratwurst and breakfast
patties have been experiencing double digit declining revenues as of recent. In order for Ann
Banks to make her mark on the company, Saxonville has to expand to new market areas around

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the country. The goal of Saxonville sausage is to successfully establish a national Italian sausage
brand in the next fiscal year. Their goals can be maintained through expansion, development of a
new product image through a new packaging design, and offer incentives for retailers and dealers
to purchase their products in bulk. The development of a new package design will increase the
Italian product image, while enticing new customers to purchase Vivio. Keeping the brand name
Vivio is the most important aspect of this alternative because they will be able to maintain their
customers through this name retention. After the packaging has been modified, the next step will
be to target new retailers and dealers to attempt to gain their business through bulk incentives.
Once these relationships have been established, then it will be time to begin the expansion phase.
The expansion phase is the most costly aspect of this alternative for it involves reliance upon an
increase in the Italian Sausage market. This phase is also the most capital intensive phase and
will require a large amount of capital upfront. Once the expansion phase is complete, Saxonville
should have new distribution and manufacturing centers east of the Mississippi River. The
marginal value product will decrease for all of Saxonvilles products making it cheaper to
produce their products.
This best alternative demonstrates the most reasonable way to eliminate the constraints
previously stated. If Saxonville sausage goes through with this alternative, then they will obtain
new revenues from different areas of the country, avoiding cannibalization of their own products.
By implementing this plan, Saxonville will not only retain its current customers while gaining
new customers and a greater market share.

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Bibliography
Haynes, Fiona. "Top 10 Global Food Trends." Low Fat Cooking - Low Fat Recipes, Tips and
Suggestions for Cooking and Eating Low Fat Foods. Web. 14 Mar. 2011.
<http://lowfatcooking.about.com/od/healthandfitness/a/10foodtrends.htm>.
Moore, Kate. "Saxonville Sausage Company." Harvard Business School. Harvard Business
Publishing, 15 Jan. 2007. Web. 14 Mar. 2011.
<http://cb.hbsp.harvard.edu/cb/access/8290145>.