• The growing popularity of organic food with the sales growing by 64 percent from last year. • The dog food industry can benefit from the absence of a completely frozen dog food market in the Boston metropolitan area. • More than fifty percent of the dog food market is still untapped thus there is an immense potential to grow in this market.
• There are almost 50 dog food manufacturers with 350 dog food brands in the U.S. However, there are five companies that have approximately 75 percent market share of U.S dog food sales in 2008. • The larger advertising budgets of competitors can be a threat to maintaining market share with a brand with flat sales. • The difficulty of convincing the distributors to provide freezer space due to the limited space in the freezers of supermarkets to keep frozen products. • The fact that frozen food requires a thawing time is another problem for the distributors because it requires a longer process.
• Show Circuit is a premium high quality dog food which contains fresh meats and cereals with no additives or preservatives. • It will be the first organic dog food that will be marketed in the Boston areas • The unique ingredients of Show Food improve the dogs’ coats remarkably, transforming a normal dog to a healthy and beautiful dog.
• Show Circuit price is quite high compared to the other dog food products in the market because of the premium quality that the product holds. • Show Circuit is the new product name in the market. It has no previous identity in the retail market. • The difficulties of product distribution and placement because of the frozen package form.
KEY MARKETING ISSUE
The dog food market is an enormous $10 billion market. Positioning within this market will require some careful consideration of the market dynamics. Due to the present environment in dog food market, First in Show Pet Foods, Inc. needs to decide on a strategy to establish their brand and capture this untapped market. The company’s executives have to figure out a plan to market their brand based on its strengths and capitalize on the favorable environment in the dog food market.
• By utilizing this opportunity, First in Show Pet Food will be able to create a unique dog food market targeted towards the niche customers in the Boston, metropolitan market area. • The company should also be able to achieve a 15 percent return on sales. • In the long-run, the company should aim to establish their brand nationwide as a special product targeted and continue to increase their profitability.
EVALUATION OF ALTERNATIVES
ALTERNATIVE 1: Increase the Retail Price and target a Niche Consumer Segment
A budget level of USD 500,000 for promotion is being used. Within this promotional budget, there will be only one television commercial with newspaper/magazine advertisements and collateral advertising. Presently Show Circuit’s retail price charged to consumers is $12.77 per case i.e. $0.07/oz ( Exhibit 2 ). Based on the competitor’s retail price (Exhibit 1) it is suggested that the retail price charged by Show Circuit can be raised to $0.30/oz ie.$4.50/15 oz. With this new retail price, the company will be able to achieve its objectives. Advantages: The market segment will be clearly defined as Show Circuit can now target the high end dog raisers who will spend more on their dogs than those dog owners who buys Dry/ Canned/ Treats. In this way the potential buyer group can be narrowed down to a niche group of expensive dog food buyers. The company will be able to charge a higher price by differentiating their product based on quality.
Disadvantages: The Boston market already has the presence of Newman’s Own Organic dog food and at the same time dog owners are also known to be price sensitive. The...