tylor pet foods
...ship = growing market. More convenience foods in the household lead to less table scraps to be served to dogs. Dogs are considered as members of the family. Growth in premium and super-premium dog foods. Premium price. We are starters, nobody knows us. No product awareness. Existing brand loyalty towards other brands. Frozen food section is hard to approach. Proven History (Blue ribbon winners). Very high quality of ingredients. The only dog food located right next to ‘people food’. Product is new to the market. 4.2. Industry Analyses – Trends In Fewer than half of the dogs in the United States are regularly fed prepared dog food, which means the dog food industry has yet to tap its full potential. Four trends indicate that this optimism is well founded. First, the dog food industry has benefited from increasing dog ownership. The U.S. dog population of 53 million, spur rend on by the owners’ desire for companionship or need for protection, is growing steadily and is expected to continue growing. Second, the trend toward using convenience foods in the household contributes to a lack of table scraps to be served to the dog, a fact that will only improve the prospects for selling prepared dog foods. A third important trend is that pet owners continue to invest their animal companions with human qualities and view them as members of family. For example, a study conducted by the adverting agency, Bates USA, reported: ‘A person who owns a dog actually identifies with the pet, assigning human characteristics to the dog such as language, thoughts, feelings, and needs”. Not surprisingly, one-half of dog owners consider themselves “Mom and Dad” to their animal companions. Therefore, it comes as no surprise that dog owners spend more than $10 billion annually for veterinarians’ fees; medication for dogs; and dog toys, clothing, accessories, and furniture. A fourth trend is the growth in premium and super-premium dog foods. According to an article in US. News & World Report, these dog foods have fuelled the growth in dog food sales along with the increase in pet ownership. 4.3. Competitor Analyses There are about 50 dog food manufacturers and 350 dog food brands sold in the U.S. However, five companies — Ralston Purina, Kal Kan Foods, Nestle USA, Heinz, and Nabisco — capture 83 percent of supermarket 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 Food Sales Dry Dog Food 58.6% Canned Dog Food 23.7% Dog Biscuits/Treats 15.5% Semi-Moist Dog Food 2.2% Total 100.0% 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 $25 million to $30 million to introduce Nature’s Course, a premium dry dog food. Alpo Lite, a line extension for Alpo canned dog food, was launched with $10 million in advertising. 4.4. Company Analyses Coming back to our mission: “Our mission is to supply healthy, nutricious, high quality freshly frozen dog food to dogs which deserve all the best.” We want to achieve the following goals: Can we introduce and promote efficiently the sale of Show Circuit dog food in the Boston market area? Yes, through our promotix mix strategy. Can we break even in the introductory year? Yes, please have a look at the financial section of the marketing plan. Can we achieve a 15 percent return on sales in subsequent years? Yes, please have a look at the financial section of the marketing plan. 4.4.1. Market Entry Strategy As we are offering a premium price and product with a high margin, our market entry strategy will be market skimming. 4.4.2. Promotion Mix Strategy The campaign will focus attention on product identification and an introductory coupon offer. Create awareness of new brand Obtain distribution through grocery outlets Motivate trial through coupon redemption Motivate trial through emotional impact of television News paper: coupon and emphasis on quality. Special-interest ads: low costs. Radio and television: to reach the mass audience. Product has to be placed in the viewer’s/ listener’s memory through an emotional approach. When going national, everything will be ready. 4.4.3. Sales Strategy To achieve our goals and objective we will effectively make use of these sales tools. A sales packet will be given to brokers, including all information they need. The brokers will sell the products to super market frozen-food buyers. The product package will be designed to persuade the super market frozen-food buyer (who is not the pet-food buyer!!) to provide freezer space to Show Circuit. Packaging and labeling will be informative and will hold some preparation suggestions. 4.5. Customer Analyses Show Circuit will change the market, as there is no major competing product or substitute to this product. Therefore, most importantly we need to analyse our customers. Does our product satisfy their needs in a way that they are willing to pay a premium price and at the same time change their buying behaviour? A major trend in the dog food market gives us the confidence that through marketing and effective use of our marketing tools we will be able to achieve this. Is there a market for us? Yes, fewer than half of the dogs in the United States are regularly fed prepared dog food, which means the dog food industry has yet to tap its full potential. There is a fast market to penetrate where we can achieve high revenues and gain market share quickly. 5. Product Market Focus 5.1. Target Markets Initially, the target market is set at: Singles and married between the ages of 21 and 50 with a household income greater than $25.000. As a nicher, Tylor Pet Foods supplied its premium product to Show-dog kennels. After discovering that the product offered more benefits than just plain feeding, the idea of offering the product on a larger scale was born. Unique benefits of Show Circuit: • Freshly frozen • High Quality ingredients • Improvement of dog coats • Premium product 5.2. Positioning Several positioning concepts can be applied: • The luxurious fur coat • The world’s finest dog food • The guilt concept • Now your dog can eat what champions have been eating for years.. Show Circuit will be positioned as the finest dog food available at any price and the only thing you will want to feed a dog that is truly a member of the family. The high quality of the product will be reflected in a premium price as was suggested by the consultants. The big question is, which segment should Show Circuit be placed in? The structure of the defrosted product comes close to that of canned dog foods. Besides that, both share more or less the same characteristics. Canned dog food takes up 23.7 % of the total dog food market, while dry dog food takes 58.6 %. Since the market of dry dog food is relatively large, Tylor Pet Food might consider launching a premium dry dog food once Show Circuit turns out to be a successful formula. Prices in the canned dog food segment vary from $ 0.10/oz to $ 0.0477/oz which indicates that Show Circuit’s premium price might be set to $ 1.10/oz or maybe even a bit more. 6. Marketing Programs 6.1. Product Strategy The product line at this moment is as narrow as possible, since it only consists of one product. In the future however, more products might be added. Examples of new products could be light versions, different tastes, different sized packages, etc. If Show Circuit actually becomes a successful product entering the frozen cat food section even seems like a possibility. Show Circuit is a premium product, which indicates that the quality is high. Show Circuit contains federally inspected beef by-products, beef, liver and chicken. Fresh meat constitutes 85 % of the products volume, and the highest quality cereal accounts for the remaining 15 %. The ingredients are packaged frozen to prevent spoilage of the fresh uncooked meat. The product’s packaging will communicate its key features; it will be packaged in a 15-ounce plastic tub, with 12 tubs per case. The container will be the main instrument to overcome general objections of the public to frozen dog food. Stated will be the thawing time, suggestions for quick thawing, how long the food will keep in the refrigerator, plus a gentle reminder to pull that container out of the freezer in the morning. Microwave instructions are also a possibility. Of course the design of the product will be made as appealing as possible, since we want to draw the attention of uninformed buyers as well, being able to sell is as an unsought product. 6.2. Price Strategy The premium price of Show Circuit forces us to use the price skimming strategy. Thus we are not aiming to gain just as much market share as possible during the introductory phase, but we are more aiming at gathering a highest possible market share, consisting of highly satisfied and more importantly returning customers who will be buying our product during the dog’s whole life. Therefore the target market was set at singles and married between the ages of 21 and 50 with a household income greater than $25.000. These dog owners are still price sensitive, but also thus far concerned about the health and welfare of their animal companion that they will be willing to pay the premium price. In Texas, another frozen dog food is sold for $ 0.072/oz or $ 0.052/oz for a larger quantity. The canned dog food segment, which we mainly focus on, suggests a $ 0.10 price. This price means a 17 oz tub will be sold for $ 1.50, so a case containing 12 tubs goes for $ 18. Total variable costs (costs of production) are $6.37 per case. The total...