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Contents
• Executive Summary
• Problem Statement
• Data Analysis
• Key Decision Criteria• Key Decision Criteria
• Alternative Analysis
• Action & Implementation Plan
Executive Summary
• Kayem Foods Inc. was a medium-sized, privately held, and family-controlled meat processing company located in Chelsea, Massachusetts.
• Experienced success as a processor and distributer of fresh delicatessen meats, hot dogs and sausage.
• Trading area had been primarily New England and part of the Mid-Atlantic.
• Annual sales had been approximately 140 million
in the fiscal year ending February 2004.
• Its products were sold under several different
brand names, with Kayem being the most well-brand names, with Kayem being the most well-
known.
• Al Fresco was introduced in 1999, as a fully
cooked chicken sausage, convenient, all-
natural, low-carbohydrate, and low-fat main meal
entrée which 75% less fat than traditional pork
sausage.
• The product was available in 7 flavors: roasted
garlic, teriyaki ginger, sun dried tomato and
basil, spicy jalapeno, garden primavera, sweet
apple and sweet Italian. apple and sweet Italian.
Kayem Sales, by Brand
16%
7%
3%27%
12%
Sales
Kayem
Genoa
McKenzie
MeisterChef3%
7%
2%
6%
1%
19%
27% MeisterChef
Schonland
Triple M
Al Fresco
Co-Pack
Private Label
Re-Sale
Problem Statement
• Matt Monkiewicz, director of marketing for Kayem Foods, Inc., is challenged with a decision pertaining to a small but fast growing product, Al Fresco chicken sausage.
• The product has become a brand leader in its • The product has become a brand leader in its market niche, and means on how to promote the product is in question.
• A “buzz” marketing campaign was recently used, and while the company did increase in sales, there is no way to directly calculate the effect the campaign had on the product.
• Mr. Monkiewicz would like to continue to use the “buzz” marketing approach, but supermarket executives and food distributers are unwilling to increase buying and support for the brand. They do not believe that this small marketing campaign do not believe that this small marketing campaign is solid enough to increase buyer recognition and increase sales.
• Customers have remarked that the product is hard to find in stores, and some cannot find it entirely and have to visit other locations.
• Objectives:
– Sustain the growth
– Increase market share
– To do so with a very limited marketing budget of – To do so with a very limited marketing budget of
$185,000
Data Analysis
• Sausage Market and Distribution
– The sausage market, while growing, has several competitors who dominate the market. Al Fresco chicken sausage has become the number one brand in its market niche, but buyer power is high due to the its market niche, but buyer power is high due to the low price and similarity of the product.
– Kayem Foods Inc has primarily sold through supermarkets and other retail food stores in the Northeast. In the last two years, it had made a concerted effort to obtain distribution in the Midwest and the Southeast.
• Competitors
– Because the chicken sausage category was small, it was difficult to obtain many specifics about competition.
– Aidell, made by a small West Coast meat – Aidell, made by a small West Coast meat processor, was one of the leading national brands, with 30% share and had strong distribution in food specialty stores such as Whole Foods.
– Sara Lee sold its Emeril brand as part of its overall sausage marketing program.
– Gerhard was a small specialty company in California.
• Consumers– Consumers had used sausage as a staple foods at all 3
meals, often serving it as the main entrée or as a compliment to other center-plate dishes.
– Families at all income level consumed sausage. 59% of all household bought sausage at least once.
–all household bought sausage at least once.
– Consumers seemed to like differentiated products because of their desire for variety in menu, and in some case to serve sausage product that were lower in fat content.
– Residents in the South ate the most sausage, followed by those living in the Northeast.
SWOT ANALYSIS
• STRENGTH
1) Already established (almost 100 years of
experience).
2) Wide variety of products.2) Wide variety of products.
3) Many different brands under the company.
4) Established distribution channel.
5) Expanded growth into other markets and
territories.
SWOT ANALYSIS
• WEAKNESS
1) Unavailable at some supermarkets.
2) Lack of awareness among consumers for some
of its products.of its products.
3) Lack of advertising and promotion.
4) Low profit margins.
5) Large amount of money spent on promotional
allowance and discounts with supermarkets.
SWOT ANALYSIS
• OPPORTUNITIES
1) Capitalize on the growth of organic and grain-fed
products.
2) Growth of consumer base demanding vegetarian 2) Growth of consumer base demanding vegetarian
sausage choices.
SWOT ANALYSIS
• THREATS
1) Established competition with larger advertising
budgets.
2) Consumer lifestyles shift to healthier living and 2) Consumer lifestyles shift to healthier living and
may not see sausage as a healthy product.
MARKET SEGMENTATION
Al Fresco is gluten-free.
GLUTEN
INTORELANT
Al Fresco is low-fat, low
carbohydrate, and all-natural.
HEALTH
CONSCIOUS
WILLING
TO PAY
MARKET POSITIONING
• Al Fresco sausages are made of chicken instead of pork. This makes the product low in fat and therefore suitable for weight-watchers and health enthusiasts.
• Made from all natural ingredients.
• Gluten-free, which makes Al Fresco sausages safe to consume for those who are gluten-intolerant.
• Low in nitrate and nitrite content.
TARGET MARKET
• 25 to 54 year old women.
• Health-conscious individuals.
MARKETING MIX
PRODUCT
• Top product: Hot dogs
• Others : Bologna, salami, sausages, kielbasa, h
PLACE
• Sold mostly at supermarkets & other retail food stores in Northeastern US.
• Looking into Midwest usages, kielbasa, hams.
• Looking into Midwest & Southeast market.
• 80% sold at delicatessen counters.
PRICE
• Premium pricing strategy . Eg; Al Fresco. Other products are competitively priced.
• Price for Kayem Foods’ products range from $2.49 to $5.99 depending on product & package size.
PROMOTION
• Traditional marketing.
• Buzz marketing
• In-store discounts and promotions.
• Coupon programs.
• Trade advertising.
• Advertising in food magazines.
Key Decision Criteria
Profit concerns
• eroding and declining because of supermarkets gaining power
• Kayem in weak position and could not negotiate with supermarkets in term of price discount and with supermarkets in term of price discount and allowances
• private label brands has been at a financial break-even point
• co-pack brands were below break-even and slightly above variable cost
Key Decision Criteria
Growing brand in product category
• Gourmet Food Category
- higher prices and better margins
- challenge to differentiate the product from the competitioncompetition
- Ex: Chicken sausage category was small with specific target market
- Even it was small but it was growing and there was an opportunity for chicken sausage to hold high market share
Alternatives Analysis
Alternative 1 Pro Cons
Advertise in
supermarket
trade magazine
• Reach required
target market which
are supermarket
• Costly
for advert
trade magazine
Cost: $80,000
are supermarket
executives and buyers
• Convince decision
makers by telling
them about the
brand’s sales and
profit potential
Alternatives Analysis
Alternative 2 Pro Cons
Buzz Marketing
Cost: $72,000 to
$75,000
• more credible than
other media advert
• Low cost than other
•Uncertain
ty effect of
the $75,000 • Low cost than other
traditional method
• influence
supermarket
executives by
creating demand
the
campaign
Alternatives Analysis
Alternative 3 Pro Cons
Magazines
advertisement
Cost: $ 32,000
• wide exposure
• sustain and built
specific demand
• Costly for
full page ads
• Cost is Cost: $ 32,000 specific demand
• influence
supermarket
executives by
creating demand
• Cost is
beyond the
brand could
support
RECOMMENDATIONS
• How-to video
• Online recipe
• Executive chef
• Recipe from cust.
• Nutritional info
• Comment & Review
• CouponsWEBSITESWEBSITESWEBSITESWEBSITES
SOCIAL NETWORKING
EVENTSEVENTSEVENTSEVENTS
ONLINE ORDERONLINE ORDERONLINE ORDERONLINE ORDER
ACTION & IMPLEMENTATION PLAN
$185k
ACTION & IMPLEMENTATION PLAN
TRADE ADVERT
•50%
•$92,500
COUPONS
•10.81%
WEB
DEVELOPMENT
•28.44%
•$52,614
MAGAZINE
ADVERT.
•10.75%•$92,500 •$19,998.50 •$52,614
•10.75%
•$19,887.50
EVALUATION
Sustain
growth of Al
Fresco?
Increase
market
share?
Meet limited
$185k
budget?
