Saxonville Sausage Company

GROUP F

Carlos Aquiles – Valeria Deserto – Eka Fitria – Thierry Abi Nader - Pedro Oliveira – Nicholas Sowell

SITUATION ANALYSIS

SAXONVILLETHE COMPANY

70 years old company

Well established German brand in the US

1.5 $ billion sales in 2005

Mainly producing fresh pork sausages

MAIN BRANDS1. Bratwurst

70% sales, mainly used during weekend BQ

Declining sales in a flat market

2. Breakfast sausages 20% revenues

3. Store brand sausage5% of sales

VIVIO Italian sausages brand

Regional distrib.: Eastern US

5% of company sales

Growing segment (+15% national growth in 2005)

VIVIO IN SAXONVILLE PORTFOLIO

MARKET SHARE

MA

RK

ETG

RO

WTH VIVIO VIVIO

BRATZ

STARQUESTION

MARK

CASH COW DOG

SAXONVILLE

PORTFOLIO

HIGH LOW

HIG

HLO W

VIVIOEastern US

VIVIONationwide

bratz Breakfast

sausage

PRODUCT

• Undifferentiated product• No clear positioning• Italian name to create consistency

PRICE

• In line with competition• Inconsistent with Saxonville pricing strategy (15 % premium)

PLACE

• 16% of national supermarkets• Mainly Eastern part of US

PROMOTION

• Discounted price during the launching period• No communication

VIVIO: CURRENT MARKETING SITUATION

SWOT ANALYSIS

Strengths• Vivio’s success in the existing market

• Saxonville’s strong national distribution Network

• Saxonville’s strong brand Recognition

• Saxonville’s association with high

quality products

Threats• Competition from 29 local, already established brands• Some competition from national • Risk of cannibalization with Brats• Appealing to Western region?

Weaknesses• Vivio’s lack of clear positioning• No product differentiation• Italian brand, German company

Opportunities• Growing market for Italian sausages

• No national competitors for fresh sausages

• Capitalizing on Saxonville nationwide brand awareness

• Exploiting Saxonville’s retail power

OBJECTIVES

1. Successful launch of a national Italian Sausage brand Take advantage of high annual growth rates (2004 – 9%, 2005 – 15%) Increase market share and contribution to total revenues

2. Limit cannibalization of other market segments (Brats and Breakfast Sausage)

3. Decrease problems associated with distributing outside of core geography

SEGMENTATION AND TARGET

SegmentationDEMOGRAPHICGender, status, number of kids, age of children,, education level, working stausPSYCOGRAPHIClyfestile: busy life, short time available for family needs BEHAVIORALfrequence: heavy, medium and light users

Target

• Busy female head of household

• age: between 20 and 50

• Geography: everywhere in the US

Values

• good, nutritious meal

• satisfy everyone’s needs

• time spent with family

• get everything done

• creativity

POSITIONING ALTERNATIVESFA

MIL

Y

CO

NN

EC

TIO

N

PROs:Recalled by the Italian brand: opportunity to make it strongerEmotional boundNot yet exploitedConsistent with Saxonville moniker: “The Family Company”Aspirational value1° concept choice

CONs:Already implied copiable Unrealistic idea C

LEV

ER

CO

OK

ING

PROs:Add more value to the general family concept Easier tactical application1° choice in “buying intent” test

CONs:Loss of focus on the original targetEvery sausage is “easy and fast”Less aspirational

PRODUCT BENEFITS

EMOTIONAL BENEFITS

Family happiness

CONSUMER BENEFITMore time for the mother, make meal that everybody

loves

FUNCTIONAL BENEFITSCreativity, ease of use, quickness

PRODUCT ATTRIBUTESNutritious, short cooking time, ingredient for other meals

POSITIONING

FUNCTIONAL BENEFITS: Quick, easy, creative, nutritious

EMOTIONAL BENEFITS: everybody loves it, the family is happy, the mom spends less time cooking,happy memories

CHOSEN POSITIONING:

FAMILY CONNECTION

REASONING:CLEVER COOKING already perceived by Vivio’s customersEnrich the brand with emotional contentExploit the first mover advantage and bind the customer

For the obsessing question “what do we have for dinner tonight?” busy mothers have now the right remedy: Vivio by Saxonville.Thanks to its high nutritional value and ease

of use, this brand of Italian sausages allows moms to prepare a variety of recipes that everybody loves in only a

few minutes. The rest is all about sharing moments!

POSITIONING STATEMENT

Italian sausages

by Saxonville

Saxonville

Vivio

• Unknown• brand1.

• German heritage

• Italian product

2.• Italian

brand• Quality

recognition

3.

PRODUCTBrand name - alternatives

PRODUCT

WHY VIVIO ?

Well established in Atlantic areas Cost of reintroduction of new

brand? Necessity?

Italian Name Placed 7th out of 20 choices of

Brand Names How much value does moving from

7th to 1st add? Italian family message is still

conveyed

Nationwide recognition and popularity

Signifies quality/credibility for an unknown brand

Preferable placement with retailers

WHY BY SAXONVILLE?

Brand name – Vivio by Saxonville

Packaging: Uniform/ large window to make fresh product visible Large Vivio Brand/ Family Image Italian colors in the brand “Back-Placed” recipes

PRODUCT

SKU choices: 4 highest performing SKUs from 2005 91% of 2005 Italian Sausage revenue Limits product variability/eases distribution problems

Vivio Size Sales % SalesItalian Sweet Sausage 24.41 oz 3.714.499$ 5%Italian Hot Sausage 24.41 oz 18.858.587$ 25%Italian Mild Sausage 24.41 oz 42.414.884$ 57%Italian Mild Sausage 55oz 2.829.047$ 4%

Total Revenue of Vivo Brand 74.320.898$

% of Revenue of Selected SKUs 91%

PRICE

5-10% premium above competitive brands Brats and Breakfast sausage both priced above SRP of competing brands Price must signal quality 5-10% on a low price product doesn’t impact that much Consistent with overall brand image

▪ Especially if we are going to keep “by Saxonville” in the brand

▪ Especially after the emotional positioning and communication effort

Must be careful not to overprice too much: Multiple regional competitors as opposed to brats and breakfast Regional brands will have “homegrown” differentiation and firm established

customer base

PLACE

National Supermarket ChainsSupercenter concept

Prominent placement in the Italian Sausage section in the store

Currently stay out of Discount Warehouses despite increasing popularity

Grocery Market Revenue Share ($)

WalMartKrogerAholdSafewaySupervaluTargetOther

PROMOTION

Influence FHH @ home• 83% of shoppers make their

purchase decision before they leave the house

• 90% of Mothers prefer brands recommended by other mothers

Magazines/Websites• Older vs. Younger (Babble.com &

Family Circle)• Family theme ads/Sponsored

Recipes

Complements/Coupons• Rice, Pasta, etc.• Online Coupons

On-Site• BOGOs• Sampling/Events

CANNIBALIZATION WORRY

Cannibalization ?

Seasonality

Different Peak Purchasing Periods

TargetFHH vs. MHH

Eating Habits

Special Events vs. Everyday Dinner

LOW

Financial Projections

  Base Year 1 Year 2 Year 3

Sweet Sausage $3,714,499.00 $9,576,442.73 $10,725,615.86 $12,012,689.77

Hot Sausage $18,858,587.00 $48,619,794.61 $54,454,169.96 $60,988,670.36

Mild Sausage $42,414,884.00 $109,350,872.81 $122,472,977.55 $137,169,734.86 Mild Sausage

(55oz) $2,829,047.00 $7,293,636.80 $8,168,873.21 $9,149,138.00

Totals $67,817,017.00 $174,840,746.95 $195,821,636.59 $219,320,232.98

% of Revenue 5% 10% 12% 13%

55% National Supermarket Penetration

75% Relative to Current Sales

ASSUMPTIONS:

ACTION PLAN-PRELAUNCH

Pre-LaunchMarch 2006 - Dec 2006

LaunchJanuary 2007 – Feb

2007

Post-Launch

Jan 2007 – Jan 2008

IMMEDIATEDistributor CoordinationAd CampaignWebsiteSales Info

2 Weeks Prior to LaunchMagazine/Online AdvertisingAmbassadors/Word of Mouth

Launch (First 2 Weeks)On-Site Sampling/PromotionBuy One/Get One

Launch (Following 4 Weeks)Complementary Products

Post-LaunchMeasurement/ControlNew Growth Ideas

MEASUREMENT/CONTROL

Product Ideas

• Additional SKUs/Flavors• Differentiated Packaging

Promotional Ideas

• Television/Radio?• New Target/Target

Expansion

Measurement/

ControlBroader Geographic

FocusRaw Sales Data

Sales Force/On-Site Feedback

Questions?