Contents

• • • • • • Executive Summary Problem Statement Data Analysis Key Decision Criteria Alternative Analysis Action & Implementation Plan

Executive Summary
• Kayem Foods Inc. was a medium-sized, privately held, and family-controlled meat processing company located in Chelsea, Massachusetts. • Experienced success as a processor and distributer of fresh delicatessen meats, hot dogs and sausage. • Trading area had been primarily New England and part of the Mid-Atlantic.

• Annual sales had been approximately 140 million in the fiscal year ending February 2004. • Its products were sold under several different brand names, with Kayem being the most wellknown. • Al Fresco was introduced in 1999, as a fully cooked chicken sausage, convenient, allnatural, low-carbohydrate, and low-fat main meal entrée which 75% less fat than traditional pork sausage.

• The product was available in 7 flavors: roasted garlic, teriyaki ginger, sun dried tomato and basil, spicy jalapeno, garden primavera, sweet apple and sweet Italian.

Kayem Sales, by Brand
Sales
Kayem 12% 16% 7% 27% 7% 6% 19% 1% 2% 3% Genoa McKenzie MeisterChef Schonland Triple M Al Fresco Co-Pack Private Label Re-Sale

Problem Statement
• Matt Monkiewicz, director of marketing for Kayem Foods, Inc., is challenged with a decision pertaining to a small but fast growing product, Al Fresco chicken sausage. • The product has become a brand leader in its market niche, and means on how to promote the product is in question. • A “buzz” marketing campaign was recently used, and while the company did increase in sales, there is no way to directly calculate the effect the campaign had on the product.

• Mr. Monkiewicz would like to continue to use the “buzz” marketing approach, but supermarket executives and food distributers are unwilling to increase buying and support for the brand. They do not believe that this small marketing campaign is solid enough to increase buyer recognition and increase sales. • Customers have remarked that the product is hard to find in stores, and some cannot find it entirely and have to visit other locations.

• Objectives:
– Sustain the growth – Increase market share – To do so with a very limited marketing budget of $185,000

Data Analysis
• Sausage Market and Distribution
– The sausage market, while growing, has several competitors who dominate the market. Al Fresco chicken sausage has become the number one brand in its market niche, but buyer power is high due to the low price and similarity of the product. – Kayem Foods Inc has primarily sold through supermarkets and other retail food stores in the Northeast. In the last two years, it had made a concerted effort to obtain distribution in the Midwest and the Southeast.

• Competitors
– Because the chicken sausage category was small, it was difficult to obtain many specifics about competition. – Aidell, made by a small West Coast meat processor, was one of the leading national brands, with 30% share and had strong distribution in food specialty stores such as Whole Foods. – Sara Lee sold its Emeril brand as part of its overall sausage marketing program. – Gerhard was a small specialty company in California.

• Consumers
– Consumers had used sausage as a staple foods at all 3 meals, often serving it as the main entrée or as a compliment to other center-plate dishes. – Families at all income level consumed sausage. 59% of all household bought sausage at least once. – Consumers seemed to like differentiated products because of their desire for variety in menu, and in some case to serve sausage product that were lower in fat content. – Residents in the South ate the most sausage, followed by those living in the Northeast.

SWOT ANALYSIS
• STRENGTH
1) Already established (almost 100 years of experience). 2) Wide variety of products. 3) Many different brands under the company. 4) Established distribution channel. 5) Expanded growth into other markets and territories.

SWOT ANALYSIS
• WEAKNESS
1) Unavailable at some supermarkets. 2) Lack of awareness among consumers for some of its products. 3) Lack of advertising and promotion. 4) Low profit margins. 5) Large amount of money spent on promotional allowance and discounts with supermarkets.

SWOT ANALYSIS
• OPPORTUNITIES
1) Capitalize on the growth of organic and grain-fed products. 2) Growth of consumer base demanding vegetarian sausage choices.

SWOT ANALYSIS
• THREATS
1) Established competition with larger advertising budgets. 2) Consumer lifestyles shift to healthier living and may not see sausage as a healthy product.

MARKET SEGMENTATION
GLUTEN INTORELANT

Al Fresco is gluten-free.

WILLING TO PAY
Al Fresco is lowfat, low carbohydrate, and all-natural.

HEALTH CONSCIOUS

MARKET POSITIONING
• Al Fresco sausages are made of chicken instead of pork. This makes the product low in fat and therefore suitable for weight-watchers and health enthusiasts. • Made from all natural ingredients. • Gluten-free, which makes Al Fresco sausages safe to consume for those who are glutenintolerant. • Low in nitrate and nitrite content.

TARGET MARKET
• 25 to 54 year old women. • Health-conscious individuals.

MARKETING MIX
PRODUCT PLACE
• Sold mostly at supermarkets & other retail food stores in Northeastern US. • Looking into Midwest & Southeast market. • 80% sold at delicatessen counters.

• Top product: Hot dogs • Others : Bologna, salami, sa usages, kielbasa, h ams.

PRICE
• Premium pricing strategy . Eg; Al Fresco. Other products are competitively priced. • Price for Kayem Foods’ products range from $2.49 to $5.99 depending on product & package size.

PROMOTION
• Traditional marketing. • Buzz marketing • In-store discounts and promotions. • Coupon programs. • Trade advertising. • Advertising in food magazines.

Key Decision Criteria
Profit concerns • eroding and declining because of supermarkets gaining power • Kayem in weak position and could not negotiate with supermarkets in term of price discount and allowances • private label brands has been at a financial breakeven point • co-pack brands were below break-even and slightly above variable cost

Key Decision Criteria
Growing brand in product category • Gourmet Food Category - higher prices and better margins - challenge to differentiate the product from the competition - Ex: Chicken sausage category was small with specific target market - Even it was small but it was growing and there was an opportunity for chicken sausage to hold high market share

Alternatives Analysis
Alternative 1 Advertise in supermarket trade magazine Cost: $80,000 Pro Cons • Reach required • Costly target market which for advert are supermarket executives and buyers • Convince decision makers by telling them about the brand’s sales and profit potential

Alternatives Analysis
Alternative 2 Pro Cons •Uncertain ty effect of the campaign Buzz Marketing • more credible than Cost: $72,000 to other media advert $75,000 • Low cost than other traditional method • influence supermarket executives by creating demand

Alternatives Analysis
Alternative 3 Magazines advertisement Cost: $ 32,000 Pro • wide exposure • sustain and built specific demand • influence supermarket executives by creating demand Cons • Costly for full page ads • Cost is beyond the brand could support

WEBSITES

• How-to video • Online recipe • Executive chef • Recipe from cust. • Nutritional info • Comment & Review • Coupons

RECOMMENDATIONS
EVENTS

SOCIAL NETWORKING

ONLINE ORDER

ACTION & IMPLEMENTATION PLAN
ACTION & IMPLEMENTATION PLAN
TRADE ADVERT WEB DEVELOPMENT •28.44% •$52,614 MAGAZINE ADVERT. •10.75% •$19,887.50

COUPONS •10.81% •$19,998.50

$185k

•50% •$92,500

EVALUATION
Sustain growth of Al Fresco? Increase market share? Meet limited $185k budget?

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