First in Show

First in Show Case Analysis Denise K Mason Davenport University

MKTG610 Dr. Cronin-Gilmore May 29, 2012

First in Show Case Recap

First in Show Pet Foods, Inc., a producer of Show Circuit, a high quality 85% fresh meat, frozen, show-dog brand kennel dog food is considering introducing their offering into the retailer market in Boston, MA. First in Show is consulting with marking, advertising firm Marketing Unlimited to review the market entry plan (Kerin and Peterson, 2007). Problem Identification The problem being discussed is whether there is room for a quality, frozen, unknown brand, high cost offering in market that already has 350 brands manufactured by 50 companies. Additionally, the public will have to be educated to search for the offering in the frozen food section of the supermarket. Another problem is that the pricing of the offering has not yet been determined. Case Analysis First in show is contemplating spending between $500,000 and $700,000 on an advertising campaign to target the single and married dog owners in the Boston market before rolling out a national campaign. The anticipated high cost of Show Circuit has further segmented the target market to those consumers with a household income greater than $25,000. First in Show believes that selling Show Circuit in the frozen section of the supermarket next to people food is an advantage over other brands of dry and canned dog foods. Since Show Circuit is 85% fresh meat mixed with 15% fortified cereal with no additives or preservatives it must be offered frozen. The plan is to package Snow Circuit in 15-oz plastic tubs with 12 tubs per case (Kerin and Peterson, 2007). At the present time only the variable production, freight and packaging costs of $7.87 per case are known. First in Show needs to add fixed costs; slotting fees for freezer space in the supermarket, which are estimated to be between $30,000 and $50,000, as well as advertising costs and a 15% desired profit margin need to be added to the product costs before a selling price can be determined. Additional costs would also include the 7% fee that food brokers

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would command in order to place Show Circuit in supermarkets as well as the 22% gross margin the supermarket would expect. First in Show plans to try and persuade frozen-food buyers to offer freezer space to Show Circuit at a possibly lower margin with the possibility of greater product turnover to make up the loss of the lower margin. In essence First in Show will be asking the buyers to share some of the risks. The advertising program consists of creating new brand awareness, gaining supermarket freezer space, offering coupons in newspaper and magazine ads and two planned television ads to be shown during The Late Show with David Letterman as well as during daytime as well as nighttime shows. Four concepts will be used during the introductory period; luxurious fur coat, worlds finest dog food, guilt shouldnt Fido eat as well as its owner and finally keeping up with the Jones Fido eating the same as show champions. The American dog food market has been expanding over the years, with an estimated 65 million dogs to feed. Additionally, the growing appreciation for healthy no additive or preservative people food, the demand for dog food having the same attributes are probably not far behind (Kerin and Peterson, 2007). The Boston area has approximately 1.2 % of the human and dog population so it should be a good market in which to gain entry. While meeting with Marketing Momentum Unlimited the executives of First in Show had several questions answered; however, one question that seemed to occur to the executives but went unanswered was whether there was a place in the market for Show Circuit (Kerin and Peterson, 2007). Identifying the Root Problem Components The root problem is that a new pricey offering, in a new delivery method- frozen, in a new market, will be entering a field where Nestle Purina PetCare, Iams, MasterFoods USA, Del Monte Foods, Hills Pet Nutrition make up 75% of the dry, canned food market (Kerin and Peterson, 2007). Even if these companies do not offer a frozen fresh meat alternative at this time they will be watching Show Circuit

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to see how consumers react. If Show Circuit does well it is probable that the named familiar companies will produce a like product with conceivable lower prices. First in Show has a lot to overcome. A subtle problem is First in Shows executives failure to ask the consultants about their changes to enter the market. There is either a failure to communicate or a lack of trust that could hamper any expansion efforts that First in Show may have. Evaluation of Alternatives In order to get Show Circuit to market a joint venture with an established dog food company would be a way to lower the market entry barriers. If the product really does improve a dogs coat and provide a nutritious healthy alternative to dry and canned dog foods it should not be too difficult to find a partner. Sharing the costs and risks may be a way to limit the possible loss and failure that are typical of new offerings in the freezer section. A joint venture may also enable First in Show a way in which to enter markets all over the country rather that put most of their eggs in the Boston basket. The problem with a joint venture with an established company is that First in Show would probably be taken over. The second alternative is to do nothing except to stay with and expand the Kennel market. By staying in a market where they are already well placed with brand recognition they should examine the opportunity to expand their expertise and business to the overseas show dog market where there are more pampered high maintenance dogs where a beautiful coat is part of their image. Striving for number one in a niche market may satisfy First in Shows desire to expand. The down side is that name brand recognition may never go beyond the show dog crowd. The third alternative is to go with the plan to introduce the Boston, MA, market to Show Circuit. While entry into the market may give First in Show a told hold it is also very risky. Competing against nationally recognized name brand foods with huge advertising budgets is very risky. Eighty percent of all foods that are introduced to the freezer section of supermarkets fail each year. First in Show seems to be in the exploratory stage of expansion, waiting to enter the market when they are surer of the pricing and willingness of consumers to purchase frozen dog food seems a good plan.

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The fourth and final alternative would be to place Show Circuit in pet superstores and veterinarian offices where consumers expect to find specialty dog foods. Providing showcase freezers may also be a way to avoid slotting fees. Having the offering in a venue where consumers can bring their pets to actually sample Show Circuit would be a marketing tool. Setting up booths where potential customers can see dogs with their extra glossy coats could also be another marketing strategy. By placing the product in a veterinarians office where travel kennels are sold Show Circuit could be marketed as a travel along food that could be stored in a cooler. Recommendation A combination of expanding their market to the overseas show dog circuit as well as formulating plans to enter the pet superstore market would mitigate risks and serve to advance brand recognition as well as help First in Show expand their business. Not having to compete for supermarket freezer space or direct consumers out of the pet food section of the supermarket to find the offering are advantages to stocking the product at pet superstores. Additionally, testing the offering at a superstore may even help reduce marketing costs if the superstore wants to stock Show Circuit within any of their chain stores. Conclusion While First in Show appears to be thinking about stepping outside their comfort zone to enter a new market they do not seem to be well prepared for the move. Their lack of a pricing strategy seems to support that theory. By slowly expanding their show dog share and slowly entering the pet superstore market they will gain experience as well as give them the opportunity to rethink their mission statement and business objectives.

References

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Kerin, R. A. & Peterson, R. A. (2007). Strategic Marketing Problems. New Jersey: Pearson Prentice Hall.

First in Show Analysis

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Internal Strengths and Weaknesses SWOT Internal Strengths Distribution Food brokers advise that offering be made through supermarkets. Supermarkets make up 36% of dog food sales. Need to package differently from Kennel to retail market. New machinery will be needed. Packaging Advertising Has robust advertising plan to introduce product to Boston before national roll out. Lack of Brand awareness outside show dog circuit. Segmentatio n Already familiar to the show dog market. Product already producing beautiful coats good for referrals. Product unknown to general public. Offerings 85% fresh meat fortified with high quality cereal.

Need to convince Internal Weaknesses markets to make room in freezer section.

In order to maintain freshness product must be sold and stored frozen

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External Opportunities and Threats Consumer Trends Consumers include their pets in the quest for more natural health conscious environment. Industry Market Share Can develop new place within 36% of dog food sold in supermarket Known brand names have 75% of supermarket share

SWOT External Opportunities

Economic

Competition Similar produced not offered in area other than SW US. Not much competition in frozen dog food yet.

Some dog owners willing to pay for organic dog food. Cost conscious consumers will avoid high priced dog food.

External Threats

People like to take their pets to super pet stores when they shop.

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Suggested Marketing Strategies 1. Make sure to survey non-pet owners to see how they feel about having dog food next to people food. Dont want to antagonize supermarket customers. 2. Increase brand awareness using show dogs and mutts to compare coats before and after. 3. Stay ahead of competition with aggressive R and D. 4. Look at putting freezers in super pet stores probably a market worth pursuing. 5. Back off on the guilt concept could backfire and anger consumers.