Marketing Analysis of “slimjim”
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SNAP INTO A SLIM JIM!
Marketing analysis of “SlimJim” (subsidiary of “ConAgra Foods, Inc.”)
Marshall School of Business, USC
By: Ilya Voziyan
This paper is my own work
I. Environment: Company/Customers/Competition
According to the Food Market Institute, an average American spends ninety-three dollars on groceries every week. Given the diversity of foods that Americans consume, few might believe that many of those foods might in fact be produced by the same company. Even fewer might believe that much of what they eat in some of the countrys best restaurants is distributed by the same company as the food that is sold in grocery stores. However, that is reality in todays food market.
One of such companies is ConAgra Foods. Located in Omaha, Nebraska, it is one of the nations largest packed foods companies. With over seventy brands under its name, ConAgra Foods operates in three primary segments: retail products, foodservice products and food ingredients. The retail products segment offers a variety of foods, ranging from frozen dinners and refrigerated foods to cooking oil and canned vegetables. The foodservices products segment provides customizable foods for restaurants. The diversity of products includes everything from culinary products to full meals. Finally, the foods ingredients segment offers many commodity ingredients such as grains and seasonings.
ConAgra Foods traces its roots to September 29th, 1919 when four Nebraska flourmills joined together to create Nebraska Consolidated Mills. Since then, the company has only continued to grow, entering a variety of food industries, from ice-cream to frozen dinners to fresh ingredients. In 1971, with over 4000 employees in 13 states and 3 countries and sales growing to nearly 270 million dollars, the company changed its name to ConAgra Foods. Following 1971, the company has acquired many of the largest brands in food industry in America. Today, its portfolio includes brands like Wolfgang Pucks, Knotts Berry Farm, Van Kamps and Slim Jim. With over 38,000 employees throughout the world, ConAgra Foods has continued to build on its success, posting over 15 billion dollars of revenue in 2005, with over 3.1 billion in gross profits.
ConAgra Foods has been able to consistently post successful numbers by diversifying and segmenting the markets that it operates in. Not only does the company offer its products to individuals, it also has a strong presence in business-to-business markets, ranging from retail stores to restaurants and even the US military. Selling to large businesses allows ConAgra Foods to sell at high volumes, gaining a larger share of the market.
One of the many brands that ConAgra Foods owns and manages as part of its retail products segment is Slim Jim. Though Slim Jim is just a small part of ConAgras large portfolio, on its own it is a very strong brand. Operating in the snacks category, or meat snacks to be more specific, Slim Jim has become one of the most popular brands among its customers and the most successful brands among its competition. It is in fact the market leader in its category.
In recent years, Slim Jims primary target audience has come to consist of teenagers, which is quite different from the brands original target market of adult males age 25 and up. Today, the main audience is males 12 to 24 years of age. There are several reasons behind this change, including the larger size of the new target market, more growth potential and, interestingly enough, the nutritional content of Slim Jim products. Slim Jim products have a fairly high content of fat, and todays adults are much more concerned with what they eat than are teenagers or young adults. Therefore, it was only logical to reposition itself in the market and target teenagers as their main audience, as sales in that market were likely to be much higher.
Slim Jims success has translated into relative success for its parent company as well. However, while Slim Jim enjoys being the market leader, ConAgra still continues to lag behind big names such as Kraft Foods and Nestle. Though the main focus of this paper will be the brand Slim Jim and its products, I find it important to mention ConAgras competitors. Slim Jim, whose competition is much different from that of its parent company, is one of the most successful brands in ConAgras portfolio and is largely responsible for keeping ConAgra Foods within reach of its competitors. Discussing the competition of ConAgra Foods demonstrates not only the kind of environment it has to operate in, but also shows how much weight Slim Jim carries on its shoulders as it tries to bring ConAgra Foods closer to its competition.
In 2005, Nestle and Kraft Foods have combined for nearly 100 billion dollars in revenue. Just like ConAgra Foods, Kraft Foods operates in many market segments, such as beverages, groceries, snacks and convenient meals. Its portfolio includes the worlds number one brand of cheese, “Philadelphia”, as well as “Maxwell House” coffee, “Oreo” cookies and “Ritz” crackers. Kraft Foodss marketing strategies include “build[ing] superior consumer brand value” and continue its long tradition of “act[ing] responsibly [with] integrity and support for the community”
Nestle, the worlds largest food maker, has similar strategies to those of Kraft Foods and ConAgra Foods. Located in Switzerland, Nestle manages brands in various categories from baby foods and food snacks, to petcare products. Some of its most known brands include Nescafe, Buitoni and Friskies. One of Nestles many goals in the industry is to ensure its future through “innovation, renovation and operational efficiency” in order to “to meet the present and future needs of consumers in an increasingly sustainable manner”.
II. Marketing Mix: Product/Distribution/Price/Promotion
Slim Jim is an “unconventional snack with an exciting, distinctive beefy taste teens love”. Though Slim Jim has been in existence for over 50 years, it was originally only sold in the Northeast and was largely unknown to the majority of the United States. Today,