Essay About Show Pet Foods And Major Dog Food Producer

First in Food Inc. Case Study
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BACKGROUND AND PROBLEM DEFINITIONFirst in Show Pet Foods, Inc. a major dog food producer is contemplating to penetrate Boston, Massachusetts with their newly developed product called Show Circuit, made of 85% fresh meat and 15% fortified cereal. Now, they must select an advertising model and marketing approach to penetrate the new market in consultation with the advertising consulting firm Marketing Momentum Unlimited.MARKET ANALYSISThe market seems very optimistic. Dog food sales is almost $10 billion at manufacturer’s price. Previous research points to three major categories of dog food like Dry, Canned and Treats, however no mention of frozen foods which indicates a huge untapped potential for frozen food. Trends regarding human behavior like growing number of pet owners, people spending more than $20 billion on their pets and demand for premium natural dog foods augur well for the company. However, this comes with added risk and liability. The market already has 50 food manufacturers with 250 brand. Further, only 5 companies dominate the market with 75% share. The established companies are very aggressive with their promotions. Some of them use 2% of their net sales for advertisement. Other aspects include food broker and supermarket margins being 7% and minimum 22% respectively. Also, Supermarket accounts for almost 36% of the sale volume. STRATEGY ALTERNATIVESDog owners, though price sensitive are careful regarding their Dog’s health. So, if we rely on the data given with Exhibit 2 of case study and trust food brokers, we can safely assume 5$ for 15 Oz. Besides all competing products have certain disadvantages which should be leveraged on while pricing the product as a premiere product.When Ad budget is $7,00,000Pros- Competing with established companies on equal foothold in terms of promotion.          High Sale volume.Cons- High units of Breakeven.          Low on Profits.

As per Exhibits 2, this will cause an immediate expenditure of huge amount. Besides it sets the expectation for sales to be 1,177,988.44 with a huge breakeven unit of 19633. But, chances of better sales volume is always there which brings a larger margin and best possible scenario to get 15% return on sales.When AD budget is $5,00,000Pros- Less risky.         Significant market share.         Low breakeven and high profit.Cons- risky when competitors going aggressive with promotions.As per Exhibits 3, the market share here seems to be low but quite significant enough to reach breakeven and retain profits. This may not be a final plan but this alternative is decent to penetrate a dense market with lower risk where you have decent profits.          CONCLUSION & RECOMMENDATIONFrom exhibits 2 & 3, we arrive that a mere spending of $200000 extra on advertisement will not guarantee market share. Rather it increases risks in a dense market and lowers the profitability of the company. I will suggest First in Show Pet Foods, Inc. should go with an Advertisement budget of $5, 00,000 only. This seems to be less risky but still they will be able to gain a significant market share which is very important for product identification. Besides the breakeven is also achievable with decent profits.Exhibits 1:Market ShareSale of Dog food$10,000,000,000Boston Dog population1.20%Supermarket share36%Market Share$43,200,000Exhibits 2:Total AD budget$700,000Cost to Consumer- 15 Oz$5Cost to customer ( 1 Cases- 12 tubes) $60Retailer Margin (22% Margin)$13Cost to Retailer$47Broker Margin (7% Margin)$3Cost to Broker$44Variable Cost of Manufacturing$7.87cost of manufacturing$36Break- Even Quantity19633Break- Even Cost$854,513Net Sales$1,177,988.44Profit$323,475.63Market Share2.73%Exhibit 3:Total AD budget$500,000Cost to Consumer- 15 Oz$5Cost to customer ( 1 Cases- 12 tubes) $60Retailer Margin (22% Margin)$13Cost to Retailer$47Broker Margin (7% Margin)$3Cost to Broker$44Variable Cost of Manufacturing$7.87cost of manufacturing$36Break- Even Quantity14024Break- Even Cost$610,366.30Net Sales$841,420.32Profit$231,054.02Market Share1.95%

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“First in Food Inc. Case Study” OtherPapers.com. 07 2018. 2018. 07 2018 < "First in Food Inc. Case Study." OtherPapers.com. OtherPapers.com, 07 2018. Web. 07 2018. < "First in Food Inc. Case Study." OtherPapers.com. 07, 2018. Accessed 07, 2018. Similar Essays Kraft Foods Case Study Kraft Foods, Inc., is a $42B global corporation. Its U.S. brands include well-known brand names such as Kraft cheeses, dinners, and dressings, Maxwell House coffee, 1,220 Words  |  5 Pages Kudler Fine Foods Case Study Located in the metropolitan area of San Diego, California, is a very classy specialty food store called Kudler Fine Foods. This store currently has three 3,480 Words  |  14 Pages Whole Foods Case Study Unit Five Whole Foods Market 2007 Case Study Analysis Introduction Please do not forget to submit your completed paper to TWO places this week only 1,022 Words  |  5 Pages Healthy Foods Case Study Healthy Foods, Inc. situation is a tough one. Profits, along with morale, are down. They have just recently broken off from their parent company and 358 Words  |  2 Pages Whole Food Case Study Overview of Whole Food This case discussed about Whole Food Market company including their external analysis, mission, vision, growth strategy, product line, store operation, purchasing 1,514 Words  |  7 Pages Kraft Whole Foods Case Study Kraft Foods, Inc., is a $42B global corporation. Its U.S. brands include well-known brand names such as Kraft cheeses, dinners, and dressings, Maxwell House coffee, 357 Words  |  2 Pages Kudler Fine Foods Case Study Service Request SR-kf-001 Kudler Fine Foods strategic plan includes a project for the creation of loyalty program, which will utilize discount coupons to entice loyal 1,352 Words  |  6 Pages Whole Foods Case Study Whole Foods In 1980, Whole Foods opened their first store located in Austin, Texas and have grown to be the largest organic food retailer today. 2,330 Words  |  10 Pages Kudler Find Foods Case Study Service Request SR-kf-013 Paper Kenneth Gilbert University of Phoenix BSA/310 Marcia Reid May 7, 2012 Service Request Page 2 5/22/12 Kudler Find Foods was open 1,156 Words  |  5 Pages Similar Topics Southwest Airlines Case Study Waterstones Case study 3 M Case Study Case Study Victorias Secret Business Law Case Study Case Study Synopsis High Quality Essays and Term Papers Join 356,000+ other students Get Better Grades Sign up © 2010–2020 OtherPapers.com Browse Essays Join now! Login Support Site Map Privacy Policy Terms of Service Facebook