Situation analysis for South Beach Diet
...healthier lives and protect them from illnesses. 1.2 Market Situation Growing Market: Dieting has become this fad that everyone constantly wants to know about. New ideas and renovations to the old have gotten people’s interest over several years. “In 2004 traffic to the dieting, fitness and health sites peaked for the year on Monday Jan. 5, claiming 0.15 percent of all Internet visits. It took only two weeks for last year’s traffic levels to drop 28 percent from their peak.” South Beach Diet has become increasingly popular in the past year, and visits to www.southbeachdiet.com were up 15.49 percent the week ending Jan. 1, 2005 versus the week ending Jan. 3, 2004. 1.3 Competitive Situation Major Key Competitors: Atkins Diet and The Zone Market Share of Key Competitor: Based on Internet visits in the “wellbeing” category, Atkins, who was once ranked within the top three has fallen to the number nine position, now holding just a 0.86% in terms of the market share visits. Strengths of Atkins Diet: Besides the fact that it’s very well known, Atkins diet was proven to work for that quick-fix diet. It’s been proven to lose weight rapidly within the first one or two weeks. Atkins offers to consumers a complete range of low-carb products such as diet books, supplements and low-carbohydrate foods. Atkins menus have been added to many well known restaurants contributing to its promotion and popularity. Weakness of Atkins Diet: After the initial weight loss, carbohydrates are meant to be slowly reintroduced in order to maintain weight loss. The diet itself is very restrictive and often dull. The diet is not meant for long term use and many of the people who followed the low carbohydrate plan considered the diet to be too extreme. Strengths of The Zone: After nine years in the market, it is still one of the best selling diet books. Not only is it one of the most popular books in the dieting category, it holds its brand awareness and established clientele. The price of the book is considered low when comparing to other dieting books and sells at the book cover price of $13.45. Weakness of The Zone: It is tedious “counting blocks” keeping track of proportions and making calculations on the amount of food for the “three blocks a day”. Another problem that people have noted is that the recipes taste terrible and are time consuming to prepare. Impact on South Beach: Although many consumers may quickly identify Atkins diet or Weight Watchers, South Beach Diet is growing rapidly. South beach diet has done a great job in terms of advertising, and their internet visits have increased by 15 percent over the past year. Competitors Sales in Dollars: Company Name Year Sales (Millions) Atkins Diet 2003 $567.59 The Zone 2003 $350.00 1.4 Target Buyer or End User Situation: We are targeting men and women of ages around 30-60. The reason being, people around that age have the tendency to look back into their lives and strive for that body or health that they may once had when they were younger. People then would look for a diet, but not just a diet, one that is recognized and one that is proven to work. This is where South Beach Diet comes into play. With new ideas from South Beach Diet, there has been a new form of diets that may help out the whole dieting process. Omega-3, a new chapter that has been added to the book, is a diet, which consists of fish oil and cod liver oil that enhances the brain and eye sight, protects you from diseases, and treats illnesses. Since most of the targeted people are adults between the age of 30 and 60, we assume that they are also parents. Parents usually feed their children, and instead of the unhealthy fast food they tend to eat, parent can cook the recommended food by South Beach Diet with includes Omega-3 that will help children and young adult live more of a healthy life, and help out not only their senses such as eye sight, but strengthen their bones as well. Usually, the adults in our marketed age group have been mostly seen in markets and coffee shops such as Starbucks and Coffee Bean. Adults make frequent trips to the market to grocery shop for food. We find this particularly a great opportunity to introduce our product. Coffee shops are also a great place where adults and young adults are often seen, which we find a great opportunity to promote the product. 1.5 Product Situation Sales: Since the publication of the book (2003) South Beach Diet has sold 7.4 million units. Profits: Based on the 7.4 million books that were sold, we can assume that the south beach diets have profited close to 74 million dollars within the past two years. o Year 2003 $24.95 x 4.4 million books: $ 109,780,000 $14.97 x 4.4 million books: $ 65,868,000 COGS ----------------- TOTAL PROFIT (2003) = $ 43,912,000 Year 2004 $24.95 x 3 million books: $ 74,850,000 $14.97 x 3 million books: $ 44,910,000 COGS ---------------- TOTAL PROFIT...