American Egg Board Case

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American Egg Board Case SITUATION ANALYSIS The Product and Organization As a consumer product, few products are as undifferentiated as eggs. Despite a few minor variations in size and shell color the differences between all varieties of eggs is miniscule compared to most products. The majority of consumers looking to purchase eggs would think of eggs as a homogeneous product, with no differences in variety or quality.

The American Egg Board is the industry association responsible for marketing eggs on behalf of all independent American egg farmers and producers. The key goal of the American Egg Board is to stimulate increased demand for eggs among consumers, particularly by increasing awareness of eggs, emphasizing the health benefits, combating fears about inaccurate health risks, and combating indirect competitors like cereal makers.

The Market and Competition Who buys eggs? In terms of age demographics, consumers aged 18-54 are above average consumers of eggs. Heavy use is found in the 18-54 age group, and is strongest among the 35-54 age group. Light use is also common among the 18-34 age group. The 55+ age group have below average egg consumption, especially for heavy use. Light use in this group is slightly below average. Education demographics reveal that consumers with some degree of college education are more often users of eggs than are consumers with less education, although those lower educated consumers are more likely to be heavy users. The college educated consumers more often fall into the light user category.

Occupational demographics indicate that Professional and Managerial/Administrative consumers tend to be light users whereas Precision/Craft and Other Employed consumers tend to be heavy users. Ethnic Group demographics show that Whites are more likely to be light users of eggs whereas Blacks and Hispanics tend to be heavy users. I hesitate to draw a conclusion about racial differences without more detailed information, including income levels. Regionally, variation in egg consumption varies less than in other categories, but consumers in the South tend to have the highest incidence of heavy use and consumers in the west tend to have the highest incidence of light use. Consumers in the West and Northeast seem to use eggs less frequently than those in the North Central and South. In terms of household income, households with less than $10,000 annual income are more likely to be light than heavy users. Households between $10,000 and $30,000 annual income tend to be heavy users more often than light users. Households above $30,000 are more frequent users of eggs and are equally likely to be light or heavy users. In terms of household structure, the large the household the greater frequency of egg consumption and the more likely the household is a heavy user. Households of only one or two members are more likely to be light users than heavy users.

Eggs as a product faces no direct competition because eggs are generally homogeneous and the American Egg Board represents the interests of all egg producers who are not in competition with each other in the retail market. Competing brands of eggs do not exist.

Despite a lack of direct competition, eggs as a product faces fierce indirect competition from products that serve as breakfast alternatives. The category giants are the cereal makers who have stolen a great deal of the breakfast market away from eggs since 1945 when egg consumption was 402 per capita. Egg consumption has fallen down to 176 per capita in 1999. Cereals, along with bagels, yogurt, toast, waffles, toaster pastries, cereal bars, and a few other breakfast products have battered the market share of eggs due to higher advertising budgets and greater convenience in the morning where families have less time now than 50 years ago, when fewer women worked and commutes were shorter.

The progression away from eggs as a breakfast food has gotten to the point where many consumers no...
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