Running head: Week 2, First in Show Case Study 1
Case Recap
First in Show Pet Foods, Inc. Is a major producer of dog food for show-dog kennels in
the U.S, and the company is now a supplier of a high quality dog food for show dogs called
Show Circuit. First in Show executives are now seeking entry into the retail branded dog food
market in Boston, Massachusetts with the help of Marketing Momentum Unlimited. First in
Show recognized that due to the high quality of their product, which contains federally inspected
beef by-products, the market development strategy would introduce Show Circuit in frozen
packaging; which is a modification from its current form. The fee for the modified 15-ounce
plastic tub of frozen dog food in a case of 12 was set at $7.87 per case. Marketing Momentum
Unlimited presented their recommended plan to the First in Show executives, which left many
during the presentation to ask “Will this program establish a foothold in the market for Show
Circuit”?
The cost of the proposed plan will be around $500,000 to $700,000, not including slotting
fees. All involved recognize that Show Circuit is among the highest quality, and costliest dog
foods to prepare. These facts, and because Show Circuit is a new product, assisted in
determining the target market, and the marketing mix; which includes the product,
communication, channel, and price strategy. Show Circuit is entering the market during a period
where only half of the dogs in the U.S. are fed prepared dog food, and dog sales are expected to
rise as humans seek companionship while treating the animal as they would a family member;
that means spending money on quality products. The market development strategy for
distribution purposes focuses on the single largest retailer channel for dog food, and that is
supermarkets which represents 36% of total dog food sales. The offering of the three major
supermarket competitors focuses solely on dry, canned, and treats with all offered in one section.
Running head: Week 2, First in Show Case Study 2
The above information shows that the marketing campaign needs to overcome objections
to frozen food, pricing, and the fact that Show Circuit will be sold in the freezer section along
with human food. The target market selected will be single and married people between the ages
of 21 and 54 with an income greater than $25,000. Research shows that this target market is the
most likely to consistently buy Show Circuit. The customer value proposition is a product that is
of the highest quality as the target market seeks to fulfil their desire to treat their dog as they
would a human. The media strategy will focus on newspaper/magazines, and a large amount of
the budget being used on television advertisements which will be used to create awareness of the
brand, motivate trial through coupons, and motivation through emotional impact of television
ads. As Show Circuit is a product with no direct competition, it’s hard to say how the other
companies will react to a frozen dog food offering. The following section will focus on the main
problem facing First in Show’s foray in the dog food business with Show Circuit.
Problem Identification
The recap of the case shows that First in Show will have many obstacles to overcome if
the executives hope to be successful. A number of factors affecting the success of introducing
Show Circuit to a new target market are that this is a new product that will be sold in frozen form
along with dog food. The target market is 21 -54 year olds with an annual income of $25,000; a
problem identified here is that whether the market segment identified is too large in scope or
should it be reduced to a niche market as the price of the product may suggest. The scope of the
target market may end up using a great deal of the program’s budget where it is not needed. The
channel strategy identified is for Show Circuit to be distributed through supermarkets which
comprises ups to 36% of all dog food sales; however the product modification and the target
market identified have the potential for greater distribution. Merchandisers such as Wal-Mart
Running head: Week 2, First in Show Case Study 3
comprise 25% of the market share, and certainly fit the market segment identified as more and
more consumers are choosing Wal-Mart as their all in one shopping experience.
The problem with the current channel strategy is that First in Show is going to miss out
on a large number of consumers identified, and this becomes more evident considering the
segment identified will treat their dog as part of the family; so why is it that the channel strategy
is ignoring key markets such as pet superstores which comprise of another 20% of the dog food
market, and veterinarians 6%. The channel’s for distribution not being utilized comprise 51% of
total market share, and this market has the potential to be repeat customers for First in Show as
many of the customers that frequent these stores have the qualities that the executives are
seeking. Further problem identification is in regards to the communication strategy. The
television ads do not clearly identify where Show Circuit would be located in the supermarket
along with the fact that it’s a frozen dog food in a 15-ounce plastic tube. The television ads
placement potentially wastes a large portion of the budget as the target market identified is
unlikely to watch The Late Show with David Letterman on a consistent basis or at all; thus
wasting money and focus on a communication strategy.
The problems identified potentially lead to First in Show’s foray into the dog food
business becoming a failure. The segment identified is very large; however the distribution of
the product is limited to supermarkets and missing out on 51% of the market identified above.
The high quality of the product suggests a target market that could be reduced to a niche market,
however even reducing the target market with the current channel strategy in place poses
problems as over half the market is being ignored. If First in Show moves forward with the
current plan, and the communication strategy remains intact, than the outcome may lead to
dwindling sales as the target market is more likely to skip over the commercials during the
Running head: Week 2, First in Show Case Study 4
selected program, and is actually more likely to see advertisements on the internet, or listen to
them on the radio during their commute to and from work, than see them during The Late Show
with David Letterman. Even if quarter of the target market were to see that ad placements, they
still wouldn’t know where to buy Show Circuit, as the dog food is not identified as being sold in
the freezer section with along with human food.
Defining the Problem
First in Show Pet Foods is entering a market segment with a new product which will be
frozen and offered in the human food section of the supermarket, and very has little to no brand
awareness outside of show-dog kennels. The segment identified occupies only 36% of the dog
food market leaving 51% of the market to the other five main dog food companies. The channel
strategy leaves the competition with an excellent opportunity of increasing their marketing and
advertising budgets during the introduction phase of Show Circuit; thus decreasing the chances
of Show Circuits survival. The communication strategy presents further problems as the
identified target market is likely to miss the advertisements due to a poor strategy to focus on
newspapers/magazines, and late night TV that will not reach the needed consumers. The defined
problems poses risks that will leave First in Show to possibly abandon the retail market place as
the public will not be aware of the brand or what it looks like, and are likely to be concerned
when they venture into the frozen food section, and see dog food beside their hash browns. The
following sections will highlight the two alternative solutions for First in Show to consider.
Evaluation of Alternatives
Show Circuit clearly has the potential to become a leader in the high quality dog food
retail market. As the high quality and price indicate that First in Show could market this product
to a niche segment; they have chosen to market the product to a wide target market. As the
Running head: Week 2, First in Show Case Study 5
target market selected is likely to shop at Wal-Mart as well, it makes good business sense that
First in Show evaluate entrance into a channel that includes 25% of the overall dog food market.
The benefits to gaining entrance to the Wal-Mart distribution channel will now be identified.
Wal-Mart is great for unique and innovative products such as Show Circuit, and offers many
reasons why First in Show should use this distribution channel. As this is a new product, and
Wal-Mart doesn’t have a similar product to benchmark against, they will be unable to drive the
price of the product down, thus enabling First in Show to maintain their higher price, and higher
margins as the actual process of meeting with Wal-Mart for product placement only requires 30
minutes including the pitch for Show Circuit Flatoff, Brad, (2008).
One of the great aspects to this channel strategy is that Wal-Mart attempts to work with
its suppliers as they understand the need for innovative products to not be stifled by distributors
that are difficult. If Wal-Mart likes the product pitch, they will then work the product in to the
next modular, and will also place the product upon First in Show’s recommendations. One of the
biggest benefits for First in Show is that Wal-Mart doesn’t charge a slotting fee; as well there are
no buying committees that can put pressure on Show Circuit to perform better, and Wal-Mart
also guarantees a quick entrance as they conduct product placement resets twice per year, thus
guaranteeing a spot at the table Flatoff, Brad, (2008). First in Show should not be fooled by the
demographics being more downscale as Wal-Mart has the potential to bring in more upscale
consumers on a daily basis than most supermarkets combined Flatoff, Brad, (2008). As Wal-
Mart seeks to double its supermarket business across Massachusetts in the near future, this is a
channel that could provide excellent product placement against competitors while keeping the
initial market development strategy costs low and as Wal-Mart is currently the sixth largest
grocery chain in New England with $1.5 billion in sales at its 37 locations.
Running head: Week 2, First in Show Case Study 6
The other area selected for further evaluation is the introduction communication strategy.
One the key area that First in Show is missing is the internet. The target market selected, along
with the distribution strategy and product placement almost make an internet marketing
campaign a necessity. As the television campaign is placing a large portion of the budget on The
Late Show with David Letterman, First in Show could better utilize the program budget targeting
TV, and the internet. As the upper limit of the budget is $700,000, the least First in Show could
spend on TV is $359,000, leaving $170,000 for a social media marketing campaign. Social
media is likely to hit a large portion of the target market, as most North Americans are now using
the internet as much as they watch TV. The initial cost for a simple multi-media micro-site
which will become the centre of an online community will be $50,000, and a highly-targeted
advertising campaign will be $50,000 per month What’s Next, (2011).
The benefits of this social marketing campaign is it will focus on key areas such as
Facebook, Twitter, and other internet tools that will drive traffic to Show Circuit. The total
incremental program budget cost for the first month would be $600,000 with $100,000 to
manoeuvre around with What’s Next, (2011). A negative for First in Show is that they may see
Wal-Mart’s market segment as a market that won’t purchase a high quality dog food; however
this is far from the truth as discussed above. Also, as the competition currently holds 100% of
the market at Wal-Mart, First in Show may feel that utilizing this channel for distribution along
with the supermarkets currently targeted may be too big for the initial product rollout. First in
Show may also feel that a social media marketing campaign with possible extra costs may
balloon into a bigger budget than initially anticipated. Many marketing experts see value in
spending money on social media marketing, but the downfall could be that it’s hard to pinpoint a
Running head: Week 2, First in Show Case Study 7
target market on the internet. The following section will discuss the recommendation of this
paper.
Recommendation
The recommendation for First in Show will be to utilize both alternatives into the
marketing mix. Utilizing Wal-Mart for distribution makes sense from an introductory
standpoint, and a business standpoint. As the target market is 21 -54 year olds with an annual
income of $25,000, it’s makes perfect sense that Wal-Mart, and their no slotting fee for new
products warrants consideration. Wal-Mart is the commands 25% of the market along with stats
that advise it is the sixth largest grocery chain in New England make this channel a necessity for
Show Circuit. The potential windfall is a slice of the $1.5 billion in sales at Wal-Marts 37 stores
across the state, and the next couple years will see an influx of Wal-Mart supercenters that will
bring in more customers due to lower prices. This will result in competition losing share and
potentially going out of business, thus increasing Wal-Mart’s market share, and potentially
bringing more customers in to purchase Show Circuit on a regular basis. The aspect to including
Wal-Mart for distribution is that it will be considered a low-risk, high reward option; whereas
potential slotting fee costs for other supermarkets is $30,000 for incremental costs.
This new low-risk, high reward distribution option coupled together with a cost effective
social media marketing campaign has the potential to elevate Show Circuit during its
introductory phase as the potential for increased customers is an added benefit to an added
channel for distribution along with an more effective communication strategy. The current
communication strategy is unlikely to bring in the target market the way First in Show is hoping,
there just aren’t enough Letterman fans as their used to be. In hiring a social marketing company
with an introductory fee of $50,000, and an annual fee of $600,000 for a highly-targeted
Running head: Week 2, First in Show Case Study 8
advertising campaign which works out to be $50,000 per month is still certainly less than the
annual fees of First in Shows competition, which can average $7 - $8 million annually. Social
media marketing has the potential to reach up to 20,000 people in a five to ten year period
through just a Facebook page. Again, low-risk compared to the competition, with a high reward
by hitting the market segment identified at the start of the paper. The following section will now
conclude this paper.
Conclusion
The real benefit to the alternatives selected is the inclusion of Wal-Mart in the channel
strategy. The market segment identified by First in Foods will increase due to the size of Wal-
Mart in the Boston area, and the low risk to having Wal-Mart carry Show Circuit will assist in
the positioning of the product in the short and long term against its competition. The market
development strategy is start local, and based on that success, expand nationwide. By including
Wal-Mart in to the mix, First in Show will have access to different markets, and customers with
different buying patterns that may react positively to frozen dog food in the human freezer
section. As Show Circuit is a new product to the market, the key is to ensure that customers are
not confused as to where to buy it, as they are likely to be confused in the beginning due to the
modified form being a frozen food, and including Wal-Mart into the channel strategy, First in
Show will now have access to 47% of the total dog food market while staying in line with their
initial program budget.
As identified throughout this paper, there was a lack of an internet presence in the
communication strategy. By spending the bottom limit of the program budget, and focusing the
remaining budget on a social media campaign, First in Show will gain exposure outside the
normal medium of TV. In creating a dedicated Facebook page and other tools that will
Running head: Week 2, First in Show Case Study 9
automatically take users to Show Circuit information, First in Show will be able to offer
printable coupons directly on the internet, thus better solidifying their introduction campaign.
The key here is to create brand awareness of Show Circuit as it’s a new product, and by
including the alternative ideas discussed in this paper, First in Show will have a better chance of
succeeding in the wide ranging demographic they have selected, while working with a small
budget that can easily be matched by the closest competitor. The show-dog kennel customers
must also do their part in helping Show Circuit become the leading frozen dog food it can be.
Running head: Week 2, First in Show Case Study 10
Duncan SWOT AnalysisInternal Strengths and Weaknesses
SWOTManageme
ntMarketing
MixAdvertisin
gR/D
Segmentation
Offerings
Internal Strengths
Executives at First in Show Pet Foods, Inc have gained experience with being a major producer with Show Circuit for show-dog kennels.
Market development strategy being utilized as awareness of product exists with show-dog kennels.
Small initial rollout of product as distributing to Boston supermarkets along with modification to enhance value to its target market.
Modification to frozen food should be perceived as being fresher than canned, dry, and some dog treats.
Market and
Target market aimed at is between 21 – 54 years of age, with advertising covering many areas that each age bracket may see Show Circuit ads.
Newspapers will see coupons available for customers, Late night TV will see a bulk of the TV budget, along with 30-seconds spots focusing on owner’s lover for pets.
Developed by a rancher after several years of research. Once product perfected, a nearby kennel owner began using for their own dogs.
Superstores ensures that the company is attracting customers that are likely to purchase on a regular basis, as opposed to customers who purchase a product one time. By focusing on customers with at least $25,000 income, and present and future customers who treat animals like family, the company is ensuring that these customers feel like a select few when purchasing Show Circuit.
First in Show Pet Foods, Inc is offering a unique, high-quality product with 85% fresh meat, and the remaining 15% comprised of highest quality fortified cereal.
No additives or preservatives found in Show Circuit.
Show Circuit contains federally inspected beef by-products, beef, liver, and chicken.
Running head: Week 2, First in Show Case Study 11
product.
Internal Weakness
es
Executives have limited experience selling premium dog food outside of show-dog kennels.
Show Circuit brand awareness doesn’t exist outside of show-dog kennels.
Initial distribution of Show Circuit only represents 36% of the market share. A sizeable portion of show-dog customers are likely to visit Pet Superstores, and Veterinarians; which comprises 26% of the market share. Show Circuit will miss out on these consumers due to limited or no freezer space at these
A budget of $500,000 to $700,000 is very small compared to the competitions. This could create further problems if competition decides to increase budget to ward of new product competition.
The advertising campaign is going to miss out on a large portion of the target market due to the bulk of the budget being placed on The David Letterman Show.
Currently, it seems as though no new research is being conducted into new products that may open the door to increased sales to the identified target market.
The company needs to have r&d working on the next big thing as people become bored limited products, especially when they are paying premium price.
First in Show Pet Foods Inc, runs the risk of failing due to market segmentation, as target market bringing home $25,000 per year are also likely to shop at Wal-Mart as Wal-Mart’s are now considered more than adequate for grocery shopping needs.
Show Circuit is among the costliest dog foods being offered at Boston supermarkets.
Limited product offering that is virtually unknown to the public that will be offered outside of the normal pet food area, and located in the frozen food section along with human food.
Consumers may be turned off from Show Circuit as it’s being offered beside their own food.
Running head: Week 2, First in Show Case Study 12
stores. SWOT EconomicCompetitio
nConsumer
Trends
IndustryMarket Share
Regulatory Requireme
nts
External Opportuniti
es
Dog food market worth $10 Billion in 2009 at Manufacturers price.
Only half of U.S. dogs are fed prepared dog food, and 50% of U.S dog food market is still unrealized.
Increased dog ownership, and increased purchasing of high quality products are expected to go hand in hand as these are owners are expected to treat dogs as one of the family.
Proven growth in sales of high quality dog food from 2006-07 to 2007-08.
Only five major competitors, with only three of these competitors having a major role inside of supermarkets.
The competition has relied on dry, canned, and dog treats. This presents an excellent opportunity to excel as the only major company offering frozen dog food.
The trend for consumers purchasing high quality dog food has been increasing since 2006 – 07, and is currently expected to climb as the untapped market of consumers begins to purchase dogs, and start to think about what kind of products they want their animal to consume.
As consumers become more willing to spend money are their extended family, future expansion of products may be possible if untapped market, along with the current market helps this become realized.
100% of dog food sales in supermarkets clearly focused on dry, canned, specialty dog treats.
Current market share of frozen dog food is relatively 0%.
Five companies control 75% of dog food market, with only three major players in U.S. supermarkets, and of those three; their products are all located in the pet aisle, thus leaving the frozen food section all to First in Show Pet Food, Inc.
NAFTA will make it easier if, and when Show Circuit is available for mass market across countries in North America.
As dog food does is not regulated under the same restrictions as people food, consumers seeking healthy diets for their dogs may find the information that Show Circuits ingredients are federally inspected may be the encouragement they need to make the switch from a competitor.
Running head: Week 2, First in Show Case Study 13
External Threats
Even though the market has seen an increase in dog ownership, and high quality pet food; the economy is still yet to fully recover from the recent economic downturn. If white collar jobs are not replenished, and more are lost due to more restructuring than a new product with a very high cost would likely be the first item crossed off their grocery list.
Companies controlling the dog food market are able to gauge new products, and increase advertising along with coupon offerings on their already existing products.
Competition could offer sales of existing products during Show Circuits initial market entry in order to undercut the competition.
Consumers are trending toward more media usage through the internet. This fact coupled with a lack of brand awareness, a sizeable portion of the budget being directed at the ill-advised David Letterman show, has the potential to sink First in Show Pet Foods.
Many consumers shop are trending toward Wal-Mart.
Five well established companies own 75% of market share, and three are standard within supermarkets pet food aisles, thus leaving very little room for error when advertising Show Circuit.
Failure to utilize distribution channel of Wal-Mart, and pet superstores that comprise another 45% of the total pet food sales due to one product that is only available in frozen form.
Current competitors can manipulate current consumers by clever marketing or packaging that may include clever catch phrases that seem to be in line with what Show Circuit is offering, thus undercutting the market potential due to a lack of legal requirements.
Running head: Week 2, First in Show Case Study 14
References:
Running head: Week 2, First in Show Case Study 15
Abelson, Jenn. 2009. Wal-Mart drives for more Mass. Grocery business. Retrieved on March 11
2011 from:
http://www.boston.com/business/articles/2009/02/10/wal_mart_drives_for_more_mass_grocery_
business/
Flatoff, Brad. 2008. Why Wal-Mart is great for innovation. Retrieved on March 11 2011 from
http://www.allbusiness.com/company-activities-management/product-management/11564744-
1.html
What’s Next. 2011. How Much Does a Social Marketing Campaign Cost? Retrieved on March
10 2011 from: http://www.whatsnextblog.com/2007/10/ok_times_up_while_youre/