Zenith Pet Foods

Topics: Marketing, Dog food, Price Pages: 13 (2964 words) Published: December 3, 2010
Marketing Management

ZENITH PET FOODS, INC. Synopsis The opportunity for Zenith Pet Foods to pursue a market development strategy for Show Circuit Frozen Dog Dinner is described in this case. Food brokers had approached Zenith Pet Foods about the possibility of entering the household dog food market in Boston. They had heard of a similar product being sold in selected pet stores in the southwestern United States and believed that potential existed in selling Show Circuit through supermarkets. The company has been successful in selling Show Circuit to the kennel market and contracted a consulting firm to develop a market entry program for introducing the product on a limited basis through supermarkets to the household dog food market in the Boston metropolitan area, The apparent decision facing the company is to accept, reject, or modify the proposed introductory marketing program. An implicit question is whether the household dog food market represents an opportunity for the company.

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Marketing Management

1.

How would you describe the household dog food market?
1. Dog food sales in the United States total $7.0 billion at manufacturer’s prices. Nevertheless, fewer than one-half of dogs are regularly fed prepared dog food. About 36 percent of total dog food sales are made in supermarkets. The remaining 64 percent is sold through pet superstores, discount and mass merchandisers, warehouse clubs, pet stores, and veterinarians. These percentages also apply to the Boston market. There are about 50 dog food manufacturers and 350 dog food brands sold in the U.S. However, five firms [Ralston Purina, Kal Kan Foods, Nestle USA, Heinz, and Nabisco] capture 83 percent of dog food sales. The household dog food industry consists of four categories of food. These categories and the percent of total dog food sales of each are shown below: CATEGORY PERCENT OF DOG FOOD SALES

2.

3.

4.

Dry Dog Food Wet Dog Food Dog Biscuits/Treats Semi-Moist Dog Food

63% 17% 18% 2%

5.

Dog food manufacturers spend about 2 percent of their sales for advertising. Annual advertising spending for established brands is $7 to $8 million for nationwide media promotion. Spending for introductory marketing programs for new products/brands is substantially higher. Heinz spent $30 million to introduce Reward, a premium canned dog food. Ralston Purina spent $34 million to introduce Beneful, a premium dry dog food. Alpo Lite, a line extension for Alpo canned dog food, was launched with $10 million

in advertising.
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Marketing Management

2.

How might one segment the dog food market and where does Show Circuit fit? 1. Due to the unusual characteristics of Show Circuit, it is important that one determine the target market(s) for the product. These markets may include: (1) extreme dog lovers, (2) dog owners concerned more with nutrition than convenience and storage, and (3) owners of pedigree dogs. Marketing Momentum Unlimited, the consultants hired to prepare a marketing plan for Show Circuit, suggest that the target market for advertising should be “singles and marrieds” between the ages of 21 and 54 with a household income greater than $25,000. Where would these people purchase dog food? In supermarkets, mass merchandisers, pet food stores or from veterinarians? These questions are important since the case states that 36 percent of dog food sales are made in supermarkets; 64 percent in the latter outlets. The initial reaction to this analysis is that the target market(s) might be quite small and the distribution program misdirected. Moreover, Show Circuit might be a “specialty-type” product. 2. Further analysis of the market should examine major dog food categories (Exhibit 2 in the case) and how Show Circuit “fits.” An attribute-market matrix is a useful illustration to determine the positioning of Show Circuit in terms of an attribute comparison. PRODUCT ATTRIBUTES DRY SEMIMOIST WET TREATS

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