Download Breeder`s Own Pet Foods, Inc.

Breeder’s Own Pet Foods, Inc.
By Andrew Carlin, Brooks Chilcoat, Julie Du,
Shannon Goodwin, and Catherin Schindler
Executive Summary
The goal of Breeder’s Own Pet Foods, Inc. (Breeder’s) is to introduce and
promote the sale of Breeder’s Mix dog food in the greater Boston area and achieve a 15%
return on sales in the first year given a limited promotional budget. We have created three
possible alternatives to be considered for a solution to reach the company’s objective.
These alternatives vary based on the promotional budget given to the marketing
campaign, age groups marketed to, number of segments marketed to, household income
of the target market, and if the families being sold to have children or not.
We suggest that Breeder’s use a $500,000 promotional budget and market to two
different age group segments both with a household income of $50,000 or more while
marketing to each segment differently. We encourage this plan to be implemented
because it will promote the introduction of a new innovative product into the greater
Boston area more effectively.
Our first alternative targets married couples and singles, ages 25-54, who have a
household income of over $25,000. The age range of the target market proposed by the
Marketing Momentum Unlimited (MMU) comes from three different decades. We
believe that the proposed target market was too broad of an age group to target with just
one type of marketing campaign. The values and advertising channels of this target
market would have to be positioned differently, making it harder to reach them. We
advise against marketing to the segment ranging from 45-54 because only 30% of older
singles and 41% of retired couples spend money on their pets.
We forecasted that the number of households in this target market is 118,429. To
reach this large number of households we would have to have a higher promotional
budget as well, using many different channels to accommodate the different ages and
income brackets. This significantly higher promotional budget would be unobtainable for
Breeder’s in their first year. In addition, to reach our goal of a 15% return on sales in the
introductory year and cover the expenses of the promotional budget, we would have to
sell 220,159 cases to retailers.
The second alternative we propose is a promotional budget of $500,000 targeting
two markets differentiated by families with a main consumer shopper aged 25-34 or 3544. These target markets will have a household income of over $50,000 and have children
under the age of 18 in their household. Not only did we split up the age group proposed
in the MMU plan, we also shortened the age range. With a smaller target market, we are
able to focus our promotional efforts on each market thoroughly to better personalize our
promotions. In alternative one, MMU proposed to target households with an income of
over $25,000 but we decided to increase that number to $50,000. The reason in doing so
is because $25,000 is too low of a household income to afford Breeder’s premium priced
product, which is priced at a competitive $3.49 per pouch. In addition, research from the
American Veterinary Medical Association showed that 63% of households with over
$50,000 of income will invest in pet food, supplies, and care while only 48% of
households with $25,000 or less will spend money to keep a pet. To achieve our goal of
a 15% return on sales in the introductory year for this alternative, we would have to sell
26,133 cases. Our target market would consist of 14,058 households and to achieve the
15% return on sales, we would need about 14% of our market to purchase three pouches
a week for a year.
The third alternative we propose for Breeder’s entry into the retail branded dog
food market is to use a promotional budget of $700,000. Using this promotional budget
we would recommend Breeder’s to use the same two target markets as in alternative two.
Having a promotional budget of $700,000 would help Breeder’s advertise more
effectively to the two different target market age groups. The increased promotional
budget would help to showcase the Breeder’s Mix dog food on television for both
daytime and nighttime audiences alike. However, this alternative is unrealistic in helping
Breeder’s achieve our goal of a 15% return on sales in the introductory year. To achieve
this goal we would need to sell 36,586 cases, which is a significant amount for Breeder’s
to expect to sell during the first year in a niche market. We believe that the average
consumer will buy three, one-pound pouches a week for their dog, and over the course of
a year will buy 144 pouches total. Based on these numbers, Breeder’s would need 3,049
households to be an average consumer, which equates them having 21.69% market share
of the target market in year one alone. It is unreasonable to assume this because Breeder’s
will need to educate and make the public aware of whom they are and that their product
is in the frozen-food section of supermarkets, both of which will take substantial time
periods to achieve.
We have found through both qualitative and quantitative research that the
strongest solution is alternative two. This solution gives the company the best opportunity
at producing a 15% return on sales in the introductory year. Also, alternative two has the
best segmented markets to target because the segments fall under the right age groups and
household income that will buy the Breeder’s Mix innovative product. Given the smaller
promotional budget, it gives the company a better chance of reaching the 15% return on
sales as well. We suggest keeping the sales packet and collateral advertising strategy
suggested by MMU. However, we will change the target market and promotion strategy.
We suggest positioning our product as the highest quality product in the industry
and therefore the suggested retail price is $3.49 per one-pound pouch. There is a similar
product to our product in Texas, which is priced at $3.59 for a two-pound package. The
cost of living in Texas is lower than the cost of living in Boston. We have adjusted the
prices to reflect both the higher cost of living and premium product.
The suggested target market that MMU presents is inconsistent with the Breeder’s
organizational goals and distinctive competencies. Therefore, we suggest narrowing the
market to a more prestigious market consisting of two different segments. Our target
market consists of families with children under 18 with incomes greater than $50,000
who are married. The first segment consists of adults between the ages of 25 and 34 and
the second consists of adults between the ages of 35 and 44. To successfully market to
these two segments we suggest using two different marketing strategies.
For the first segment, we will implement the guilt concept during an advertising
campaign titled “Good Food for a Good Boy”. The campaign is inspired by a series of
interviews that will be conducted in downtown Boston. The interviewer will first ask
interviewees how they view their dog, emphasizing the fact that pet owners consider their
dogs as members of their family and that they identify human characteristics in their
dogs. Next, the interviewer will talk about and show traditional dog food ingredients in
order to evoke disgust from interviewees. Breeder’s Mix will lastly be showcased as the
remedy to this issue; emphasizing how Breeder’s Mix is an all-natural, additive and
preservative free product that is packaged frozen to prevent spoilage of the fresh
uncooked meat. After the interview, interviewees will be educated to find the product in
the frozen food section of the grocery store.
We suggest advertising the campaign in magazines, on 30-second commercial
advertisements, and social media. According to a research conducted by Syracuse
University conducted in July 2010, the 25-34 age segment was the second largest
demographic for Facebook users. Through social media, we will be able to produce
YouTube videos that exceed 30 seconds at a low cost.
For the second segment, we will create a campaign focusing on the concept that
Breeder’s Mix is what show champions have been eating for years, and that Breeder’s
Mix is the world’s finest dog food. This segment is comfortable being advertised through
traditional media thus the ads will be communicated through print media and television
advertisements suggested by MMU with the exception of the couponing phases. We
decided against couponing because we do not want to diminish the perceived value of
Breeder’s Mix.
In 2011, the dog food industry in the US is expected to make $14 billion in sales
and in Boston the sales are expected to be $168 million. Dry food takes 60% of those
sales while canned food and frozen food is 20% and 1% respectively. We forecasted our
market potential is about $2.1 million which is 1% of dry food, 1% canned food and 50%
of frozen food sales. We believe we can capture 50% of those frozen food sales because
there is no other frozen food dog option in Boston. We believe this plan will successfully
promote Breeder’s Mix not only because of the above reasons but also that there is a
growing trend of high quality all natural dog food products.
Appendix A - Target Market for Families with children and income higher than $50,000
and Market Potential
Appendix B – Target Market for singles and married people with income $25,000 and
more
Appendix C – Units Sold to Breakeven and 15% return on Sales
Appendix D - Pricing
Appendix E – Percent of market needed to achieve 15% return on sales
Financials