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SITUATION ANALYSIS
SAXONVILLETHE COMPANY
70 years old company
Well established German brand in the US
1.5 $ billion sales in 2005
Mainly producing fresh pork sausages
MAIN BRANDS1. Bratwurst
70% sales, mainly used during weekend BQ
Declining sales in a flat market
2. Breakfast sausages 20% revenues
3. Store brand sausage5% of sales
VIVIO Italian sausages brand
Regional distrib.: Eastern US
5% of company sales
Growing segment (+15% national growth in 2005)
VIVIO IN SAXONVILLE PORTFOLIO
MARKET SHARE
MA
RK
ETG
RO
WTH VIVIO VIVIO
BRATZ
STARQUESTION
MARK
CASH COW DOG
SAXONVILLE PORTFOLIO
HIGH
LOW
HIG
HLO W
VIVIOEastern US VIVIO
Nationwide
bratz Breakfast sausage
PRODUCT
•Undifferentiated product
•No clear positioning
•Italian name to create consistency
PRICE
•In line with competition
•Inconsistent with Saxonville pricing strategy (15 % premium)
PLACE
•16% of national supermarkets
•Mainly Eastern part of US
PROMOTION
• Discounted price during the launching period
•No communication
VIVIO: CURRENT MARKETING SITUATION
SWOT ANALYSIS
Strengths• Vivio’s success in the existing
market
• Saxonville’s strong national
distribution Network
• Saxonville’s strong brand
Recognition
• Saxonville’s association with high
quality productsThreats• Competition from 29 local,
already established brands
• Some competition from national
• Risk of cannibalization with Brats
• Appealing to Western region?
Weaknesses• Vivio’s lack of clear positioning• No product differentiation• Italian brand, German company
Opportunities
• Growing market for Italian
sausages
• No national competitors for fresh
sausages
• Capitalizing on Saxonville
nationwide brand awareness
• Exploiting Saxonville’s retail
power
OBJECTIVES
1. Successful launch of a national Italian Sausage brand▪ Take advantage of high annual growth rates (2004 – 9%, 2005 – 15%)
▪ Increase market share and contribution to total revenues
2. Limit cannibalization of other market segments (Brats and Breakfast Sausage)
3. Decrease problems associated with distributing outside of core geography
SEGMENTATION AND TARGET
SegmentationDEMOGRAPHICGender, status, number of kids, age of children,, education level, working stausPSYCOGRAPHIClyfestile: busy life, short time available for family needs BEHAVIORALfrequence: heavy, medium and light users
Target
•Busy female head
of household
• age: between 20
and 50
•Geography:
everywhere in the
US
Values
•good, nutritious
meal
•satisfy everyone’s
needs
•time spent with
family
•get everything
done
•creativity
POSITIONING ALTERNATIVESFA
MIL
Y
CO
NN
EC
TIO
N
PROs:Recalled by the Italian brand: opportunity to make it strongerEmotional boundNot yet exploitedConsistent with Saxonville moniker: “The Family Company”Aspirational value1° concept choice
CONs:Already implied copiable Unrealistic idea C
LEV
ER
CO
OK
ING
PROs:Add more value to the general family concept Easier tactical application1° choice in “buying intent” test
CONs:Loss of focus on the original targetEvery sausage is “easy and fast”Less aspirational
PRODUCT BENEFITS
EMOTIONAL BENEFITS
Family happiness
CONSUMER BENEFITMore time for the mother, make meal that everybody
loves
FUNCTIONAL BENEFITSCreativity, ease of use, quickness
PRODUCT ATTRIBUTESNutritious, short cooking time, ingredient for other meals
POSITIONING
FUNCTIONAL BENEFITS: Quick, easy, creative,
nutritious
EMOTIONAL BENEFITS: everybody loves it, the family
is happy, the mom spends less time cooking,happy
memories
CHOSEN POSITIONING:
FAMILY CONNECTION
REASONING:CLEVER COOKING already perceived by Vivio’s customersEnrich the brand with emotional contentExploit the first mover advantage and bind the customer
For the obsessing question “what do we have for dinner tonight?” busy mothers have now the right remedy: Vivio by Saxonville.Thanks to its high nutritional value and ease
of use, this brand of Italian sausages allows moms to prepare a variety of recipes that everybody loves in only a
few minutes. The rest is all about sharing moments!
POSITIONING STATEMENT
Italian sausages
by Saxonville
Saxonville
Vivio
•Unknown•brand1.
• German heritage
• Italian product
2.•Italian
brand• Quality
recognition
3.
PRODUCTBrand name - alternatives
PRODUCT
WHY VIVIO ?
◼ Well established in Atlantic areas▪ Cost of reintroduction of new
brand?▪ Necessity?
◼ Italian Name▪ Placed 7th out of 20 choices of
Brand Names▪ How much value does moving from
7th to 1st add?▪ Italian family message is still
conveyed
◼ Nationwide recognition and popularity
◼ Signifies quality/credibility for an unknown brand
◼ Preferable placement with retailers
WHY BY SAXONVILLE?
Brand name – Vivio by Saxonville
◼ Packaging:▪ Uniform/ large window to make fresh product visible ▪ Large Vivio Brand/ Family Image▪ Italian colors in the brand▪ “Back-Placed” recipes
PRODUCT
◼ SKU choices:▪ 4 highest performing SKUs from 2005 ▪ 91% of 2005 Italian Sausage revenue▪ Limits product variability/eases distribution problems
PRICE
◼ 5-10% premium above competitive brands▪ Brats and Breakfast sausage both priced above SRP of competing brands
▪ Price must signal quality
▪ 5-10% on a low price product doesn’t impact that much
▪ Consistent with overall brand image
▪ Especially if we are going to keep “by Saxonville” in the brand
▪ Especially after the emotional positioning and communication effort
◼ Must be careful not to overprice too much:▪ Multiple regional competitors as opposed to brats and breakfast
▪ Regional brands will have “homegrown” differentiation and firm established
customer base
PLACE
National Supermarket ChainsSupercenter concept
Prominent placement in the Italian Sausage section in the store
Currently stay out of Discount Warehouses despite increasing popularity
PROMOTION
Influence FHH @ home•83% of shoppers make their
purchase decision before they leave the house
•90% of Mothers prefer brands recommended by other mothers
Magazines/Websites•Older vs. Younger (Babble.com &
Family Circle)•Family theme ads/Sponsored
Recipes
Complements/Coupons•Rice, Pasta, etc.•Online Coupons
On-Site•BOGOs•Sampling/Events
CANNIBALIZATION WORRY
Cannibalization ?
Seasonality
Different Peak Purchasing Periods
TargetFHH vs. MHH
Eating Habits
Special Events vs. Everyday Dinner
LOW
Financial Projections
Base Year 1 Year 2 Year 3
Sweet Sausage $3,714,499.00 $9,576,442.73 $10,725,615.86 $12,012,689.77
Hot Sausage $18,858,587.00 $48,619,794.61 $54,454,169.96 $60,988,670.36
Mild Sausage $42,414,884.00 $109,350,872.81 $122,472,977.55 $137,169,734.86
Mild Sausage (55oz) $2,829,047.00 $7,293,636.80 $8,168,873.21 $9,149,138.00
Totals $67,817,017.00 $174,840,746.95 $195,821,636.59 $219,320,232.98
% of Revenue 5% 10% 12% 13%
55% National Supermarket Penetration
75% Relative to Current Sales
ASSUMPTIONS:
ACTION PLAN-PRELAUNCH
Pre-LaunchMarch 2006 - Dec 2006
LaunchJanuary 2007 – Feb
2007
Post-Launch
Jan 2007 – Jan 2008
IMMEDIATEDistributor CoordinationAd CampaignWebsiteSales Info
2 Weeks Prior to LaunchMagazine/Online AdvertisingAmbassadors/Word of Mouth
Launch (First 2 Weeks)On-Site Sampling/PromotionBuy One/Get One
Launch (Following 4 Weeks)Complementary Products
Post-LaunchMeasurement/ControlNew Growth Ideas
MEASUREMENT/CONTROL
Product Ideas
•Additional SKUs/Flavors•Differentiated Packaging
Promotional Ideas
•Television/Radio?•New Target/Target
Expansion
Measurement/
ControlBroader Geographic
FocusRaw Sales Data
Sales Force/On-Site Feedback
DwDeclaration
Created byDivya Agarwal, during an internship under Prof. Sameer Mathur, IIM
Lucknow.www.IIMinternship.com