MARKETING 400 LEVEL CASE STUDY

Breeder’s Own executives have not answered key questions that help understand the potential market opportunity they hold. As Breeder’s Own did not develop an effective branding strategy, they are serving a smaller market with lack of appeal for frozen dog food. The general dog owner lacks knowledge about the product and the potential objection of location near other dog food brands.

Factors:

Smaller market with lack of appeal: It was stated that 1 in 10 (10%) dog owners buy premium foods regularly and 15% are interested but have not bought any yet. That means that 25% of dog food customers could buy frozen dog food, multiplying the market by 2.5. Currently, this type of dog food accounts for about 1% of dog food volume in dollars ($140 Million in the US) and 1.2% of dog owners live in the Boston area. That means that the potential market for Breeder’s Own in Boston is ($140 Million)*(1.2%)*(2.5) = $4.2 Million.  It is important to note that this is the potential market. 10% of customers already buy an existing product, so they would have to be convinced to switch. Additionally due to the lack of availability and convenience, buyers are less inclined to buy a frozen dog food product over another product. If Breeder’s Own had a plan initially to expand their market and going beyond their customers expectations, they would be  able to gain more appeal and exposure of their product.

Market lacks knowledge of product: The dog owner market lacks the knowledge of frozen dog food and their benefits that include all ingredients being raw which increases the nutritional value overall. With a lack of education for this specific market, dog owners are more inclined to default to traditional dry dog food as it is the most popular choice. This is especially detrimental to dog owners who want to spend more money on their dogs and are looking for a high-quality food product. Additionally the typical consumer may lack the knowledge that frozen dog food products require additional instructions to prepare the food. If Breeder’s Own took the initiative to focus on educating their target market about the positives of frozen dog food, in addition to preparation,they would not be struggling against the competition in high-quality dog food.

Location near other dog food: Because Breeder’s Own is not located in the conventional dry dog food aisle, potential customers are less likely to acknowledge their product. This put Breeder’s Own at a disadvantage, as they have to educate dog owners to find their product in the freezer section, which is not close to other traditional dog food. Additionally the potential location of their product in Boston supermarkets could be an issue, due to the uncertainty of product placement among regular human frozen food items. If Breeder’s Own executed an effective plan for their consumers to locate their product, location for their product would not be a factor contributing to their product.

Food brokers distribution issue: Given the sales program for Breeder’s Mix, an issue with distribution arises being that the food brokers be able to get distribution in supermarkets or not. According to the sales packet, Breeder’s has to include information about the product, suggested manufacturer’s list price to consumers. Additionally, keeping the greater margin for frozen foods under consideration, Breeder’s will need to keep the $30,000 slotting fee as 85% of the 15% of new products fail. So to make sure they get shelf space in the frozen section they really would need to focus on getting an ideal placement for their product.

Alternative Solutions:

I. Accept the proposed Advertising and Trade Promotion budget of $500,000

Pros: As determined previously, the market potential for frozen dog food is $4.2 Million. To reach a 15% profit goal while spending $530,000, we need to sell approximately $1.6 Million worth of food.  That would mean we need to capture 38% ($1.6Million/$4.2Million) of the market for frozen dog foods. Realistically, this number is very high, so it is unlikely that we will meet this goal just in the first year.

Cons: We might not reach as many potential customers as we project for the first year.

II. Change their branding strategy: Brand the product as the most nutritious out of them all.

Pros: If Breeder’s Own makes changes their branding strategy, it may attract more customers. As of right now, in their advertisements, they have branded their product as frozen fresh dog food. The traditional dog owner is already used to dry, room temperature dog food. If we want to attract more customers and change their buying routine by making them by something completely different to what they are used to, we have to attract them without them noticing they are making a change in their routine. If we start branding this product as the most fresh and nutritious food for people’s canines, it people will focus on the positive effect this nutritious food will give to their dogs and they might consider changing to frozen food.  

Cons: The marketing company may not agree with the new proposal. It may cost the company more money as well, which could offset their costs to not break even.  

Recommendations: To be able to solve the branding issue and be able to attract customers try our product, we will have to develop a very strong marketing and advertising campaign. Supermarkets and major pet stores is where we really want people to see us. As part of our advertising campaign we will develop dog foot print stickers with arrows and the brand name that be in the dog food aisle, the projected cost for these floor stickers is $3,000. These floor stickers will direct customers to a small refrigerated barrel, which will cost $1,000 per month, that will be at the end of the aisle with individual pouches that customers can buy to try the product.  In that refrigerator there will be the aisle number where the big pouches are located in the freezer aisle. This refrigerated barrel will be available in the dog food aisle for 3 month to get customers to try the product and get familiar with its benefits. This will  be included in their traditional marketing campaign budget of $500,000. We believe that the market itself is adequately defined and segmented because there is enough information to calculate a market potential. There is a total market volume, numbers of human and dog populations in Boston, and total sales that happen in supermarkets.  We are very positive about these recommendations and we trust that with these changes we will attract more customers to be able to reach 15% return on sales in its introductory year.