Professional Documents
Culture Documents
Show
Circuit
Table
of
Contents
Target
Market........................................................................................................................................3
Competitive
Analysis..............................................................................................................................................3
Porter's
5
Forces.......................................................................................................................................................3
Show
Circuit
SWOT.................................................................................................................................................8
Market
Definition.....................................................................................................................................................9
Segmentation............................................................................................................................................................10
Strategy
.............................................................................................................................................................
.........13
VALS
....................................................................................................................................................................
.........14
Market
Potential....................................................................................................................................................14
Market
Share...........................................................................................................................................................15
Target
Market
Market/Competitive
Analysis
Dog
food
industry
profile
Dog
foods
fall
into
three
categories:
dry,
canned,
and
treats
Dog
foods
are
marketed
either
as
complete
foods
or
as
supplementary
foods
Sales
of
dog
food
will
total
about
$10
billion
in
2009
at
MSRP
Supermarkets/grocery
stores
dispense
36%
of
all
dog
food
sold
in
U.S.,
which
represents
$3.6
billion
in
sales
at
MSRP
Other
64%
is
sold
at
mass
merchandisers
(Wal-Mart),
pet
super
stores
(Petco
and
Petsmart),
farm/feed
stores,
veterinarians,
Internet
retailers,
and
independent
pet
stores
Organic
dog
food
sales
grew
64%
last
year
Porters
Five
Forces
Threat
of
intense
segment
rivalry:
HIGH
50
dog
food
manufacturers
and
350
dog
food
brands
in
U.S.
Five
companies
accounted
for
about
75%
of
U.S.
dog
food
sales
in
2008
Well-known
brands
will
have
more
shelf
facings
because
of
larger
slotting
fee
budgets;
the
ratio
of
shelf
facings
typically
indicates
the
amount
market
share
and
awareness
ratio
Nestl Purina Pet Care, MasterFoods USA, and Del Monte Foods brands are most prominent in supermarket/grocery store and mass merchandiser channels
Private label dog food accounted for about 9% of total supermarket dog food sales
Nestl Purina PetCare is the leading U.S. dog food advertiser Major brands are spending $7 million to $8 million annually for ongoing nationwide media promotion
$34 million was spent on television and print ads to introduce Beneful (premium dry dog food); Alpo Lite was launched with a $10 million advertising effort. Show Circuit has $700,000 at most
There are some products similar to Show Circuit being sold in the freezer section of selected supermarkets in a few cities (Frosty Paws, Bil Jac, etc.)
Threat of new entrants: LOW to MEDIUM Product development is required; attaining the firm-specific knowledge of frozen dog food increases entry barriers Product category and location is unfamiliar for pet owners to associate with dog food; this raises advertising costs
15% of new products introduced to supermarkets each year are aimed at the freezer case; 80% fail
Frozen food brokers are unfamiliar with dog food, which reduces the ease of gaining distribution and shelf/freezer space
However, the sales of higher-priced/quality dog food is growing, and the potential profit margins are attractive
Threat of substitute products: MEDIUM to HIGH Canned and dry dog foods are cheaper and more widely distributed Reduced leisure time causes Americans to prefer ready-made food Owners can prepare their own complete dog meals with people food
Threat of buyers growing bargaining power: MEDIUM to HIGH Channel members Frozen food brokers will be hesitant to promote a dog food because it is outside of their expertise and promises a lesser profit margin Retailers have limited shelf/freezer space and do not have to take on a product if they do not think it will create foot traffic Consumers During economic recession consumers will be more price sensitive and avoid premium products However, pets need to eat to survive, and if the owner wants complete frozen dog food (not treats), there are no other brands within Boston to switch to from Show Circuit
Threat of suppliers growing bargaining power: LOW The meat products can be provided by any supplier as long as they are federally inspected to fulfill the product claim The remaining fortified cereal may be more limited because Show Circuit requires high quality, but it is still a widely available commodity The freezing process or plastic packaging required is not highly specialized and can be performed by any supplier or the manufacturer itself if vertically integrated Major dog food brands Beneful (Nestl ) Strengths Well-known brand that claims quality, nutrition, and flavor Contains real chicken to offer protein and increase muscle strength Includes vegetables, vitamins, nutrients, and minerals
Weaknesses Contains some low-quality ingredients such as corn and chicken by-product meal Bad publicity because of protein claims supported by only chicken by-product meal
Kibbles N Bits Strengths Well-known, established brand Lower price in relation to competitors Healthful ingredient claims, such as protein and vitamins
Weaknesses Only a few varieties within brand lines Lower quality in relation to competitors Some unhealthy ingredients, such as corn, soybean meal, corn syrup, and wheat
Pedigree Strengths Well-known, established national brand Dry, wet, and dog treats with claims of healthiness Focuses on four core benefits: skin and coat, oral care, digestion, and immunity Weaknesses Iams Strengths Established, well-known brand with wide distribution High quality products with vitamins and minerals 7 Low quality ingredients, such as corn and chicken by-products Unspecified meat and bone meal from waste meat
Weaknesses Poor brand perception regarding healthiness Low quality ingredients, such as corn and corn by-products
SWOT analysis Strengths Claim that product improves dogs coats holds validity Used and recommended by professional show-dog owners for years Federally-inspected and high-quality meat ingredients History of blue-ribbon winning dogs, who used Show Circuit
Weaknesses New products need costly introductions to the retail market Costliest prepared dog food Needs refrigeration (perishable) Requires thawing time Large packaging will discourage owners to purchase large volumes because of the required freezer space Opportunities Growth in premium and superpremium dog foods Higher-priced dog foods fueled growth in dog food sales Increasing emphasis on all-natural, no additives/preservatives, and vitamin-and-mineral-enriched claims
Will be only dog food located right next to people food so there may be an advantage of gaining market share as a first-mover
Threats Well-known dog food brands with bigger promotional and slotting fee budgets Economic recession discourages purchase of premium products Frozen food brokers need to be persuaded that greater product turnover will compensate for potentially lower margin Being the only dog food located right next to people food also means that consumers will need to be directed to the new location inside retailers away from the dog food aisle
Define
Market
Demographics/behavior
Fewer
than
half
of
U.S.
dogs
are
regularly
fed
prepared
dog
food
U.S.
owned-dog
population
is
65
million
Owners
desire
companionship
and
protection
Owners
personify
pets
with
human
qualities
and
view
them
as
members
of
the
family
(75%
of
owners
consider
themselves
Mom
and
Dad
to
the
dog)
95%
of
owners
pet
and
hug
their
dog
every
day
Owners
spend
more
than
$20
billion
annually
for
vet
fees,
dog
medication,
dog
toys,
clothing,
accessories,
and
furniture
Greater
Boston
area
has
1.2%
of
U.S.
population
and
1.2%
of
the
dog
population,
assuming
direct
correlation
Expenditures for pet products in the Boston market approximate the national average Owners in general are price sensitive but willing to pay premium prices for organic dog foods Owners are concerned about the health and welfare of their animal companion
Segmentation
Criteria
Demographics
Income
$25,000+;
Show
Circuit
is
the
costliest
dog
food
to
prepare
63%
of
households
with
incomes
greater
than
$25,000
invest
in
pet
food,
supplies,
and
care
Ages
21-54
Marital status Single: owners want companionship, protection Married: act as moms and dads of pets 10
Family life cycle 2-4 kids: (79% of parents with school-age children buy pet food and supplies compared to 71% of parents with younger or older children) No kids: (72% of roommate households buy pet food and supplies, 73% of young, childless couples)
Behavior Decision-roles Decider: parents/singles Buyer: women are more likely to do the grocery shopping User: dogs may not enjoy the flavor and refuse to eat it up to the point they begin starving Usage: heavy users are less likely to shop on price User status: first-time users because product is just being introduced to the retail dog food market Loyalty: we need shifting loyals to switch to Show Circuit but remain loyal Product features The frozen aspect will mostly attract those who are familiar with eating and storing frozen foods The product improves dogs coats; this will attract show dog owners or those that value their dogs physical beauty
11
Healthy, organic, and other premium quality features will attract those concerned with dogs health trends and are willing to pay to do more than the bare minimum for their pet
Geographic Show Circuit will launch in its headquarters, Boston, as a test market and will hopefully gain concentrated market share If successful, First in Show Pet Foods, Inc. may take Show Circuit into Texas to compete against Bil Jac Frozen food brokers Although dogs are the end users, and owners are the purchasers, a portion of the campaign will need to be designated to the frozen food broker segment to convince them to help distribute the product through retailers. These brokers are characterized by the following: Profile Market client products to a range of frozen food retailers and wholesalers to get the maximum volume of sales possible Offer either basic service or advanced options such as inventory control and promotional efforts Motivation Work on a commission basis; you only have to pay them for the sales they make
12
Access to segment Most are very well advertised on the Internet through their own websites Geographic Most standard frozen food brokers only work in a small geographic area, such as a specific town or county. Brokers within the Boston area will be targeted Strategy Differentiation Although there will be a concentration in the (frozen) dog food market, various segments of dog owners exist with varying wants and needs Product specialization First in Show Pet Foods, Inc. does provide multiple dog food product lines; however, this particular campaign is only focused on the frozen Show Circuit product, which will be marketed to multiple segments within the retail dog food market not limited to the following: Show dog owners/kennel market General household dog owners Frozen food brokers
13
VALS Innovators Purchases reflect cultivated tastes for relatively upscale, niche- oriented products and services Most receptive to new ideas and technologies
Believers Conservative, conventional, and traditional people with concrete beliefs They follow established routines, organized in large part around home, family, community, and social or religious organizations to which they belong Achievers Successful, goal-oriented people who focus on career and family Favor premium products that demonstrate success to peers Because of their busy lives, they are often interested in a variety of time-saving devices
Market
Potential
There
is
growth
in
premium
and
superpremium
dog
foods
and
an
increasing
emphasis
on
all-natural,
no
additives/preservatives,
and
vitamin-and-mineral- enriched
claims
Boston,
Massachusetts
has
an
estimated
population
of
1.2%
of
the
U.S.
population,
which
was
305
million
in
2009;
therefore,
Show
Circuit
can
reach
3,660,000
owners
since
dog
and
human
populations
are
highly
correlated.
Fewer
than
half
of
the
dogs
14
in the United States are regularly fed prepared dog food, so we can assume that half of Bostons dogs, or 1,878,000 dogs eat prepared food and are potential customers.
Market
Share
Major
Dog
Food
Categories
and
Brands
in
Supermarkets
Category
Dry
Category
Share
of
Total
Dog
Food
65%
Dog
Food
Brand
and
Category
Share
Category
Brands
National
brands,
such
as
Beneful
(Nestl);
Kibbles
N
Bits
(Del
Monte);
Dog
Chow
(Nestl);
Pedigree
Mealtime
(Masterfoods);
Iams
(Iams)
Private
Label
(Store)
brands
Other
(Regional/Local)
brands
Canned
Treats
20%
15%
National
brands,
such
as
Alpo
(Nestl);
Cesar
Select
(Masterfoods);
Mighty
Dog
(Nestl);
Iams
(Iams)
Private
Label
(Store)
brands
Other
(Regional/Local)
brands
National
brands,
such
as
Milk
Bone
(Del
Monte);
Beggin
Strips
(Nestl);
Busy
Bones
(Nestl)
Private
Label
(Store)
brands
Other
(Regional/Local)
brands
12
15
100%
8
4
100%
73%
7
25
100%
88%
Category
Share
68%
15