Marketing
Best in Show is going to face tremendous difficulty in bringing Show Circuit to market. There are a number of problems that the company faces, among them issues of targeting, promotional spending and positioning. The product is inherently high end, given the cost of production, so this must be taken into consideration when devising the marketing strategy. The market has not been adequately segmented at present, because no psychographic segmentation has been done. The research thus far merely assumes conclusions about end users -- for example that appeals like having your dog eat what you eat are actually going to be effective or that talking to consumers like this is the 1950s (find it in the freezer section of the grocery store) is going to make sense to the younger, urban consumers of 2008. These assumptions should be undone and the market understand in a more sophisticated manner if this effort is to have any hope of success.
The first issue is that the novelty of the product has to be overcome rapidly. We will ignore the unrealistic expectation of breaking even in the first year and focus on long-term brand-building as a starting point. Determining the size of the organic market is not essential, since this product can easily be marketed to people outside of the "organic" segment. At no point during the formulation process was "organic" one of the key selling points. This is a premium dog food and if it happens to be organic, all the better. The size of the...
If this information is not published, the company should speak directly with retail channels to get an estimate. They will need to work with retail channels very closely in order to get this product to market, so they may as well start by working with them on gaining basic market information.
Indeed, there is a fundamental problem with the current segmentation presented. The canned/dry dichotomy does not reflect that some brands in either category are premium. Price is a significant determining factor in dog food, and Show Circuit has no hope of capturing the low end of either canned or dry with its premium-priced offering that is being marketed on the basis of its superiority. Show Circuit will skim from premium brands both in canned and dry, and the marketing must be focused on the size of the premium market as that is what is relevant.
Before devising a marketing strategy, Best in Show needs to understand the price point that it will come in with. The cost of production is $7.87 per case in variable costs. The company wants to cover fixed costs, and it also will want to earn a profit of at least 15%, so the price to retailers is going to be set significantly higher, say 37% higher, implying a wholesale price of $10.23. With the supermarket markup, the final price at retail will be $13.12 per case, which impressively brings a frozen product that is all meat to market…
