Perdue Farms, Inc is planning to diversify by venturing into the processed food market. It is specifically looking at entering this new market with Chicken hot dogs. Previously, Perdue has successfully transitioned from selling hatching eggs to live chicken and then to the dressed poultry market. Now with this new idea, Don Mabe called upon Mike Moriarty to decide if Perdue should get into the chicken hot dog market or not. The purpose of this analysis is to:
* Recommend if Purdue should get into the chicken hot dogs market or not * Evaluate the marketing strategy proposed by Moriarty
* Suggest if the product has to be introduced as new or as an alternate to the existing meat hot dogs. Recommendations
* Perdue should get into the chicken hot dog market and introduce its product as an alternative to the existing hot dogs made of other meat; this makes it easier for Perdue to differentiate its hot dogs. * Investing in owning a hot dog production facility and packaging lines rather than leasing other facilities * Enhance the value (get/give) of the chicken hot dog, thus retaining the current customers and attracting new customers. The next step would be to improve the AITL cycle to increase awareness, and thereby, loyalty of these satisfied groups of customers. Highly satisfied customers stay loyal for longer. Analysis
Market/Customer Analysis: Segmentation of the hot dog market can be done in several ways. One of those is pictorially represented below: Hot dog Consumers
Heavy – 26% Medium- 33% Light- 29%Non Consumers- 12%
Homemaker Age Homemaker Age Homemaker Age Homemaker Age
Household Income Household Income Household Income Household Income
Household size Household size Household size Household size
4 regional areas 4 regional areas 4 regional areas 4 regional areas
Characteristics of Heavy Consumers
* This segments estimated sales for 1976 is $44,312,000 (26% of market). * This segment is highest price sensitive among all and the consumers are not too worried about its nutritional value. This implies that DMP is the “price” and DMU is mostly the household income. * Brand loyalty is least in this segment, implying that the cheapest of the lot gets the highest number of heavy consumers. * If Perdue wants to capture this segment, then it may have to introduce its product at a very competitive price. But, these consumers are not loyal to any brand. So, it’s better not to spend any time or resources on this segment as there would not be a good return on investment.
Characteristics of Medium Consumers
* This segments estimated sales for 1976 is $56,243,000 (33% of market). * These consumers are not only price sensitive but also quality driven, so both these factors become their DMP. The home maker seems to be the DMU in this segment. * Brand loyalty depends on both the DMP’s but is higher than the heavy consumer segment. * If Perdue wants to capture this segment, then it has to provide high satisfaction to its consumers either through quality or price. These consumers will look for the additional value that they get out of the product that they buy.
Characteristics of Light Consumers
* This segments estimated sales for 1976 is $49,425,000 (29% of market). * These consumers are more health conscious and therefore look for nutritional value. This, nutritional value acts as the DMP for this segment. Health consciousness seems the DMU. A large number of 50 and over consumers fall into this category, generally as people grow...