Ashleigh Robinson 21783

MKT100 Individual Assessment Task

Positioning and Segmentation

The Smiths Snackfood Company

Ashleigh Robinson 21783

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Table of Contents

Table of Contents
TABLE OF CONTENTS ................................................................................................................................2 EXECUTIVE SUMMARY ............................................................................................................................3 COMPANY PROFILE....................................................................................................................................4 A BRIEF HISTORY OF SMITHS SNACKFOOD COMPANY .................................................................................. 4 SMITHS TODAY ............................................................................................................................................................ 5 MARKET SEGMENTATION ......................................................................................................................7 PARTY SNACKERS ........................................................................................................................................................ 8 INDISCRIMINANT SNACKERS .................................................................................................................................... 8 ECONOMICAL SNACKERS ........................................................................................................................................... 8 NUTRITIONAL SNACKERS .......................................................................................................................................... 9 WEIGHT WATCHERS .................................................................................................................................................... 9 GUILTY SNACKERS ................................................................................................................................................... 10 PERCEPTUAL MAPS ................................................................................................................................. 10 SMITHS CHIPS PERCEPTUAL MAP ....................................................................................................................... 11 SAKATA RICE CRACKERS PERCEPTUAL MAP .................................................................................................. 12 NOBBYS NUTS PERCEPTUAL MAP ...................................................................................................................... 13 COMPETITIVE ADVANTAGE ............................................................................................................... 14 PRODUCT: SMITHS CRINKLE CUT CHIPS .......................................................................................................... 14 POSITIONING STATEMENT ...................................................................................................................................... 15 CONSUMER PROFILE .............................................................................................................................. 16 VALUE PROPOSITION ............................................................................................................................. 18 REFERENCES .............................................................................................................................................. 20 APPENDICES ................................................................................................................................................ 21

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Executive Summary
This report provides an analysis of positioning and segmentation in regards to the snack food market within Australia. It will specifically focus on The Smiths Snackfood Company, which currently operates within the Australian snack food market. Some topics that will be covered in this report include; A brief company profile and description of the Smiths Snackfood Companys product range including; Smiths Chips, Doritos, Twisties, Burger Rings, Parkers Pretzels, Nobbys Nuts, Cheetos Cheese and Bacon Balls, Tasty Toobs, Cool Pak Popcorn, Red Rock Deli, Grain Waves and Sakata Rice Crackers. A detailed segmentation of the snack food industry into six categories of snackers; party snackers, indiscriminant snackers, economical snackers, nutritional snakers, weight watchers and guilty snackers. A number of product specific positioning matrices including; Smiths Crinkle Cut Chips, Sakata Rice Crackers and Nobbys Nuts.

Ashleigh Robinson 21783 A detailed explanation of the competitive advantages The Smiths Snackfood Company holds over its major competitors, as well as specific competitive advantages and a positioning statement for the individual product of Smiths Crinkle Cut Chips. A specific personal profile of a potential consumer for the individual product of Smiths Crinkle Cut Chips An in depth value proposition and brief for an advertising agency promoting Smiths Crinkle Cut Chips and the specific features and benefits of this particular product, which include; flavour, the use of local produce, product differentiation and convenience as well as the ability for cross promotion.

Company Profile
A Brief History of Smiths Snackfood Company
Francis Leigh Smith originally founded Smiths Potato Crisps Ltd. in the United Kingdom after World War 1. Throughout the Great Depression, Smith moved to Australia with his associate, George Ensor, to expand his business, and the first Smiths chips were manufactured within Australia in 1931.

Over the years, there had been number of ownership changes and a number of new products were added to the original Smiths potato chip including; Twisties, Parkers Pretzels, Burger Rings and Nobbyss Nuts (Smiths, 2011a, para. 5). Finally in August of 1998, PepsiCo Inc. purchased the Smiths Snackfood Company. (Please refer to appendices 1, 2 and 3).

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Smiths Today
The Smiths Snackfood Company (Smiths) is a subsidiary of PepsiCo Inc. It is the snack food operating division within Australia and as stated by PepsiCo, it is considered to be Australias leading snack food company. (PepsiCo, 2012, para. 1). The Smiths Snackfood Company has a reasonably large product range of which fall under four of the five product categories of salty or savory snacks including: salty snacks, crackers, nut snacks and popcorn the product range can be seen detailed below in Table 1, which is located on the following page. Further, Smiths is manufactured all over Australia with manufacturing sites and distribution centers located in New South Wales, Western Australia, South Australia and Queensland.

(Please refer to appendices 4).

Table 1 Summary of Smiths Snackfood Company Brands

Smiths Chips (Crinkle Cut and Thin Cut)

Doritos Corn Chips

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Twisties

Burger Rings

Parkers Pretzels

Nobbys Nuts

Cheetos Cheese and Bacon Balls

Tasty Toobs

Cool Pak Popcorn

Red Rock Deli

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Grain Waves

Sakata Rice Crackers

Market Segmentation
Market segmentation can be described as a process by which a market is divided into relatively similar, meaningful and identifiable segments or groups. (MKTG, 2009, p69).

Further, as stated by Long (2012, p1), within the snack food market, consumers will fall into six identifiable groups: (1) Party Snackers; (2) Indiscriminant Snackers; (3) Economical Snackers; (4)

Ashleigh Robinson 21783 Nutritional Snackers; (5) Weight Watchers; and (6) Guilty Snackers. These segments are further detailed below.

Party Snackers
Party Snackers can be described as middle-aged consumers, between the ages of 40 to 60 years old. Their psychographic characteristics can include being very sociable and outgoing. Some benefits sought include snacks that is easy to serve to guests when holding functions and parties as well as a snack that compliments a variety of beverages and tastes excellent. Further, this particular market can be segmented into a medium or average user group, as they only snack occasionally. Items from Smiths which fall under this market segment include: Nobbys Nuts and Parkers Pretzels.

Indiscriminant Snackers
Indiscriminate Snackers can usually be described as teenagers, from the ages of 15 to 19 years old. Their psychographic characteristics can include being self-indulgent and pleasure seeking. The main benefits sought include a snack that tastes good and satisfies their hunger cravings. This market can be segmented into a high or heavy user group, as they tend to snack often. Items from Smiths which fall under this market include: Doritos, Cheetos Cheese and Bacon Balls, Twisties, Tasty Toobs and Burger Rings.

Economical Snackers
Economical Snackers can be described as large families, usually with 5 or more members as well as single parent families, due to the fact that they only have one source of income. Their psychographic characteristics can be described as confident, educated and price-orientated - being aware of available discounts and competition prices. The main benefits sought include a snack that has good value for money, as well as one that is priced reasonably low. This market can be segmented into a medium or average user group.

Ashleigh Robinson 21783 Items from Smiths which fall under this specific market include: Smiths Chips (Crinkle Cut and Thin Cut) as these products are reasonably low priced, with regular specials as well as being included in value packs to provide value for money for consumers and potential customers.

Nutritional Snackers
Nutritional Snackers can be described as educated parents, usually with a family consisting of young children. Some psychographic characteristics include being self-assured, in control and knowledgeable. The main benefits sought include a nutritional and natural snack, with low artificial colouring and substitutes for flavouring. This market can be segmented into a low or light user group. Items from Smiths that fall into this segmented market include; Grain Waves and Sakata Rice Crackers.

Weight Watchers
Weight Watchers can usually be described as young males and females, usually of a single marital status. Their psychographic characteristics can include; being adventurous, as well as someone who loves the outdoors and is into health and fitness. Some of the benefits sought from snack products include; a snack that has low calories and provides energy. This market can be segmented into a low or light user group.

The item from Smiths that falls under this segmented market is the Sakata Rice Crackers. The reason Sakata rice crackers have been included within both the nutritional snackers and weight watchers segments is that they are known to be 100% natural with no artificial flavours, colours, preservatives and no added MSG. These benefits would appeal to both individuals who are interested in nutrition and eating healthy, as well as those who are watching their weight and being fit.

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Guilty Snackers
Guilty Snackers can be described as consisting mainly of females with no specific age limit. Their psychographic characteristics can include loneliness, as well as a sense of worry or anxiety. Some benefits sought from this market include; a snack that tastes good, one that is quick and easy as well as relatively low in calories. Further, it can be common for this segment to use snacks to create a personal space, a way to take a minute for themselves away from the burden of daily life. This market can be segmented into a high or heavy user group. Some items from Smiths that fall under this segmented market include Red Rock Deli chips and Cool Pak Popcorn.

Perceptual Maps

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Smiths Chips Perceptual Map

Explanation: As can be seen in the Perceptual Map featured above, Smiths Crinkle Cut Chips have a number of different competitors within the marketplace, which can include; Pringles, Samboy, Thins, The Natural Chip Company and Coles Simply Less. Smiths can be considered to be a more classic and original flavour than some of its other competitors. Further, the majority of other competitors including Thins, Samboy and Pringles can be viewed as more synthetic due to the fact that Smiths Chips are cooked using healthy sunflower oil and have 75% less saturated fat compared to other chips cooked in 100% palmolein oil.

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Sakata Rice Crackers Perceptual Map

Explanation: As can be seen in the Perceptual Map featured above, Sakata Rice Crackers has a wide range of competitors within the market place including: Fantastic Crackers, Peckish Rice Crackers, Coles Brand Crackers and Vita Wheat Rice Crackers. As can be seen in the perceptual map above, the Sakata Rice Crackers have the most visual appeal compared to some of their other competitors, which is achieved through the use of bright and attractive colours. Further, Sakata also has the lowest amount of calories, with only 397 calories per 100g.

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Nobbys Nuts Perceptual Map

Explanation: As can be seen in the perceptual map above, there are a number of competitors within the snack food market that compete with Nobbys Nuts. Some of these competitors include; Coles Salted Peanuts, Majas Bhuja Mixed Nuts, Mother Earth Cashews and the Gourmet Nut Co. Flavour Escapes. As can be seen above, Nobbys Nuts are considered available to a mass market, unlike some of its other competitors that are very much targeted toward a niche market, such as Majas Bhuja Mixed Nuts. Further, Nobbys Nuts are the second least expensive option available to consumers, only after Coles generic brand peanuts.

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Competitive Advantage
Competitive advantage is defined as the ability of one organisation to outperform other organisations because it produces desired goods or services more efficiently and effectively than its competitors. (Waddell, Jones & George, 2011, p21). The Smiths Snackfood Company is considered one of Australias largest snack food companies, which is a competitive advantage in itself in relation to other smaller competitors within the snack food market. Being such a large industry player within this market, Smiths has the benefit of high brand awareness and consumer loyalty. Further, being such a large company poses a threat to new entrants within the snack food market, which is due largely to Smiths product differentiation strategies, forward integration that is used to provide greater economies of scale, as well as efficiency and effectiveness of production and wide distribution channels.

Product: Smiths Crinkle Cut Chips

Smiths crinkle cut chips are an extremely well known and recognised product, which has been branded as the original and the best within Australia for over 80 years. They have a number of competitive advantages over their main competitors, which consist largely of brands such as Thins, Samboy, and Pringles. Firstly, Smiths chips are cooked in sunflower oil, an oil which is naturally less is saturated fat and contains 75% less saturated fat than other competitors chips which may be cooked in 100% palmolein oil. This offers consumers a healthy alternative to some of its other competitors within the market for snack foods. Further, Smiths is a very large company and in turn has a substantial amount of resources that they can allocate and invest into various promotions and advertising, which helps to secure and develop their brand within a fiercely competitive market. One example of a Smiths Chips consumer promotion is the Do us a Flavour campaign, where consumers had the chance to enter a competition to create a new flavour for Smiths Crinkle Cut Chips. Further, one other successful consumer promotion was the Track-A-Pack campaign, where Smiths teamed up with Sony Music to offer consumers an incentive in the form of a free music download with every purchase. In addition, one example of Smiths successful advertising is the 48 Hour campaign. This promotes the fact that Smiths chips travel from the farm to the packet in 48 hours. (Please refer to Appendices 5, 6 and 7) 14

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Positioning Statement
Smiths Crinkle Cut Chips are a snack food product that aims to provide a great tasting and value for money snack through locally provided ingredients and produce, to delight and exceed customers expectations, Australia wide.

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Consumer Profile
The main market segment that Smiths Crinkle Cut Chips fall under is the Economical Snackers. Please see detailed below the personal profile of a potential customer within this specific segment.

This is Tricia Jones. She is 42-years-old and works hard as a full-time legal executive assistant in Sydney CBD. She earns an annual income of $50,000.00. Tricia lives with her husband and three children in Hornsby. This is a well-educated, middle socio-economic household. Her children are all young boys, aged 5, 9 and 13. Tricia spends a large portion of her income on her three children, mainly on items such as clothes, sporting equipment and groceries. A smaller portion of her income is put into savings, which is put towards travel to keep-in-touch and visit her family that lives overseas. Tricias interests include spending quality time with her husband and children; going to parks, playing video games, watching TV and movies as well as playing sports such as tennis and going bowling together. Tricia and her family mostly eat at home, they only go out for dinner once or twice a month.

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Ashleigh Robinson 21783 With three children and a husband, Tricia is a bargain-hunter when it comes to the family shopping, and specifically in regards to her weekly food and grocery shopping. Tricia and her family tend to eat a lot of packaged foods convenience is important in this family! She loves good value for money and is always looking for discounts and value packets to get more for her money. Smiths Chips specifically provide value and benefits that meet the specific target market and needs of Economical Snackers such as Trish Jones. They regularly provide discounts on their products, as well as have a range of value packs available for purchase.

(Please refer to Appendices 8 and 9).

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Value Proposition
Smiths Crinkle Cut Chips provide consumers with a number of features and benefits that can be used to provide an advertising campaign with the aims of increasing brand awareness and loyalty as well as increasing sales and overall profits.

Some of the outstanding elements of this product include; -

Flavour: Smiths Chips are known as the original and the best and have been for over 80 years. Further, the crinkle cut chips comes in a range of different flavours to suit different consumer tastes and preferences. These include; original, salt and vinegar, chicken, cheese and onion, as well as barbeque.

The Use of Local Produce: Smiths Chips are cooked with raw products including corn and wheat flour. The products are sourced locally from within Australia (Smiths, 2011b, para. 3), which in turn promotes buying within the community and helps farmers to build the local economy.

Product Differentiation and Convenience: Smiths has partnered with Visy, an Australian cardboard company, and have introduced an innovation and sustainable alternative to the regular packets for the Smiths chips range. (Bean Media, 2012, p4). This alternative not only offers a point of difference compared to other competitive products in the snack food market, but it also offers consumers value for money, product protection and convenience - as it is easy to handle with handles to carry and an easy access window to retrieve products. (Please refer to appendices 10).

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Ashleigh Robinson 21783 Ability for Cross Promotion: As previously mentioned, Smiths is a subsidiary of PepsiCo Inc. This allows for the opportunity for cross promotion, with items from PepsiCo such as Pepsi, the soft drink. This is a form of marketing promotion with has already occurred in the UK, with one of Smiths products, Doritos, and PepsiCos product of Pepsi and is something which can be considered within Australia to help increase sales of Smiths Crinkle Cut Chips and overall profit. Further as stated by Indra Nooyi, the current Chairman and Chief Executive Officer of PepsiCo Inc. we benefit from the opportunity to cross-merchandise and promote our products. But in emerging markets, in particular, our Snacks business benefits massively from the scale of our Beverage business (Guru Focus, 2012, para. 8). (Please refer to appendices 11).

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References
Bean Media (2012). Profile: Continuously Competitive. Visy & Smiths working together to chip away at climate change. Retrieved November 20th from: http://www.beanmedia.com.au/profiles/The%20Smiths%20Snackfood%20Company. pdf Guru Focus (2012). PepsiCo: Management Stands Behind Power of One. Retrieved November 23rd 2012 from: http://www.gurufocus.com/news/161266/pepsico-managementstands-behind-power-of-one Lamb, W.C. , Hair, J.F. , McDaniel, C. , Summers, J. & Gardiner, M. (2009). MKTG. (1st Asia Pacific Ed). Australia: Cengage Learning Australia Pty Ltd. Long (2012). MKT100 Individual Assessment Task 2012. Retrieved November 2nd 2012 from http://lms.icms.edu.au/mod/resource/view.php?id=27770 PepsiCo (2012). The Smiths Snackfood Company Brands. Retrieved November 3rd 2012, from http://www.pepsico.com.au/brands/Smiths/ Smiths (2011). The Smiths Story. Retrieved November 4th 2012 from http://www.Smiths.com.au/index.php/Smiths_history (a.) Smiths (2011). Performance With Purpose. Retrieved November 10th from http://www.Smiths.com.au/index.php/performance_with_purpose (b.) Waddell D., Jones, G.R. & George, J. (2011). Contemporary Management. (2nd Ed). Australia: McGraw-Hill Australia Pty Ltd.

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Appendices
1.

1946 Smiths truck - helping to feed the nation Source: (Commercial Motor, 2008, para. 1) Commercial Motor (2008). Albion helps to feed the nation. Retrieved November 3rd 2012 from http://www.commercialmotor.com/big-lorry-blog/albion-helps-to-feed-the-natio

2.

Advertising booklet issued by Smiths (1935). Source: (Flickr, 2010, para. 1) Flickr (2010). Holiday Tours of Scotland by Car advertising booklet issues by Smiths Potato Crisps, c1935. Retrieved November 4th 2012 from http://www.flickr.com/photos/36844288@N00/4356332954/in/pool-vintage_advertising/

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3.

Smiths Potato Crisps Advert (1935) Source: (Flickr, 2012, para. 1) Flickr (2012). Smiths Potato Crisps advert, c1935. Retrieved November 4th 2012 from: http://www.flickr.com/photos/36844288@N00/4355587055/in/pool-vintage_advertising/

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4.

Location of Smiths and Sakata manufacturing sites and distribution centers within Australia Source: (Smiths, 2012, p4) The Smiths Snackfood Company and Sakata Rice Snacks Australia: Australian Packaging Covenant Action Plan. (2011 2015). Location of Smiths and Sakata Operations within Australia. Retrieved November 4th 2012 from http://www.Smiths.com.au/app/webroot/downloads/ActionPlan.pdf

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5.

Smiths Do us a Flavour Competition Source: (Absoluteleigh, 2009, para. 1) Absoluteleigh (2009). New Smiths Chips Flavours. Retrieved November 23rd 2012 from http://absoluteleigh.com.au/new-Smiths-chips-flavours/

6.

Smiths Customer Promotion Track-a-Pack Source: (Brands Bands Fans, 2012, para. 1) Brands Bands Fans (2010). Download Bandit. Retrieved November 24th 2012 from http://www.brandsbandsfans.com/archives/1608

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7.

Smiths 48 hour Advertising Campaign Source: (POPAI, 2012, para. 1) POPAI (2012). Smiths 48 Hour Pre Packed Unit. Retrieved November 23rd 2012 from http://www.popai.com.au/awards/2010/details.aspx?GUID=1eec9969-cddb-49f3-ae4667a1abac3d1c

8.

Smiths Value for Money 6 Packs Source: (Product Revier, 2012, para. 1) Product Review. (2012). Smiths Crinkle Cut Potato Multipack Chip Reviews. Retrieved November 22nd 2012 from http://www.productreview.com.au/p/smith-s-crinkle-cut-potatomultipack.html 25

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9.

Smiths Chips Special Discounts Source: (ibuyforless, 2012, para. 1) ibuy4less (2012). Smiths Chips. Retrieved November 24th from http://www.ibuy4less.com.au/publics/productDetails.aspx?id=59421

10.

Smiths Example of Product Differentiation Source: (Woolworths, 2012, para. 1) Woolworths (2012). Smiths Chips Multi Packs Crinkle Cut Variety. Retrieved November 24th from: http://www2.woolworthsonline.com.au/Shop/ProductDetails?Stockcode=245856&name=Smithschips-multi-packs-crinkle-cut-variety

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11.

Cross Promotion Example Doritos and Pepsi Source: (Encounter Magazine, 2012, para. 10) Encounter Magazine. (2012). How to maximize sales when youre puckish for profits. Retrieved November 25th 2012 from http://www.encountermagazine.co.uk/uncategorized/maximise-salespeckish-profits

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