Marketing plan report

on

Pedigree Dog biscuits

“Bikkies”HAPPY DOG=HEALTHY DOG

Making a difference through performance.

Sneha Shetty

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Pradeep Singh.

Pedigree BIKKIE

Pedigree comes from a French phrase meaning birds feet, representing the shape of family trees. Pedigree is the most popular dog food in the world.

Founded in 1911 by Frank C. Mars, generating annual revenues of over $30 billion. One of the largest food manufacturers in the world,

The world’s leading pet care company, with billion-dollar brands PEDIGREE , ROYAL CANIN and WHISKAS

70,000 associates working at more than 300 sites, including more than 130 factories, in about 75 countries worldwide.

Headquarter in McLean, Virginia, U.S.A.

Mars Incorporated operates in different business segments i.e. product lines:

Chocolate: SNICKERS, MILKY WAY Pet care:- PEDIGREE, Whiskas(cat).

Food: UNCLE BEN’S, MASTERFOODS Drinks: FLAVIA

C OMPETITOR:

Scooby dog foods, Hill’s pet nutrition, Purina. Although Pedigree is amongst the first to launch dog biscuits.

NESTLE pet Products: Purina, Alpo, Cat Chow, Fancy Feast, Friskies, Tidy Cat

Zenith Pet Foods, Inc. is a major distributor of dog food for show kennels throughout the United States.   The product that Zenith is offering is called Show Circuit, which is a highly nutritious and quality ingredient dog food.   The product of Show Circuit, frozen pet food designed to enhance the appearance of the dog's coat as well as providing a balanced meal, is planned to be placed in the frozen foods section of a supermarket.

Market information:

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In 1994, 71% of dog owners were aware of Alpo, an awareness that was far greater than for any other canned dog food. The closest competitor was the category leader Pedigree with 55% awareness, followed by Mighty Dog with 30% awareness and Ken-L-Ration with 22% awareness.

The Category

Dog food is a $2.5 billion business, of which the dry form represents almost 70% of sales, as well as the growth segment of the dog food business. As Table 1 shows, Ralston Purina is the leader in the dry category with its Purina brands. Purina segments its brands in accord with different types of dogs, but consistently focuses on nutrition as a main benefit. Mars has the largest share of the canned dog food business. The acquisition of Alpo has made Nestlé a substantial player in dog food, and a particularly strong player in the canned food category.

Dog food brands also differ in their appeal within the dry and canned categories. Exhibit I suggests that brands differ in the extent to which they attract small, medium, and large dogs. For Nestlé brands, Alpo tends to attract owners of larger dogs, whereas Mighty Dog is purchased by owners of small dogs. Exhibit II indicates the demographic profile of small-, medium-, and large-dog owners.

Table 1: Market Shares for Major Brands

Brand Share of Dog Food Share of Canned Share of Dry

Alpo 07 18 02

Nestle 07 12 04

Ralston Purina 24 -- 32

Mars 14 34 07

Quaker 14 12 11

Heinz 06 12 --

Private Label 17 07 27

The importance of these dimensions varied by type of feeder. Exhibit IV reports the responses of dog owners who are exclusive dry feeders. The dimension importance and the position map for various brands of dry dog food is presented. This map superimposes brands on the dimensions. A similar analysis for dog owners who are canned feeders is also presented in Exhibit IV.

Pet food is distributed primarily in three types of retail outlets: Grocery stores, mass merchandise stores, and pet specialty outlets. The specialty outlets include pet superstores, mom and pop pet stores, and veterinarians. While these three types of outlets collectively reliably account for more than 85% of sales, as Table 2 indicates, the relative popularity of these outlets is changing. Grocery outlets are declining in their importance, whereas mass merchandisers and pet specialty are increasing in their importance.

Table 2: $ Share of Pet Food Market by Outlet

Outlet 1989 1993 1995 estimated

Grocery 75 59 55

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Mass Merchandise 8 16 18

Pet Specialty 4 12 15

Consumers

Dog owners tend to use dry dog food more often than they do canned. Consumers treat dry dog food as the staple in their dogs’ diet. It is viewed as the primary source of nutrition. Between 30% and 40% of dog owners use at least some canned. It is not unusual for dual users to mix dry and canned dog food to enhance the taste of the dog’s meal.

Consumer brand switching is moderate in the category. Exhibit IX indicates that brand loyalty is greatest for Mighty Dog, which is positioned as a premium brand for small dogs, and health-oriented brands including Iams and Hill’s Science Diet that are sold by pet stores and by veterinarians.

Exhibit I reports on the dry brand used most often. This exhibit represents canned users of dry. Percents do not add to 100 because some canned users do not use dry.

Exhibit ISegmentation Based on Size of DogCanned Brand Used Most Often - by Size of Dog

  Total Canned Users %

Small Dog % Medium Dog % Large Dog %

Total Nestle Brands 29 30 29 27

Total Alpo 18 13 22 21

Alpo (Regular) 10 6 11 12

Alpo Prime Cuts 9 7 12 9

Friskies 4 3 5 3

Mighty Dog 8 14 3 3

Total Heinz Brands 18 15 18 20

Cycle 4 4 3 5

King Kuts 2 2 3 1

Recipe 2 2 1 2 3

Reward 3 3 2 2

Skippy 9 9 6 11 11

Total Pedigree Brands 30 33 29 30

Pedigree (Regular) 15 14 18 15

Pedigree Choice Cuts 12 13 12 13

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Pedigree Little Champions 2 3 2 1

Pedigree Select 3 5 1 2

Hill's Science Diet 4 5 3 5

Iams 1 1 2 0

Store Brand 7 7 11 8

Other 10 8 11 10

(Base) (505) (233) (191) (174)

 

Note: Bolded numbers indicate meaningful differences between groups

 

 Exhibit I (cont'd)

Segmentation Based on Size of Dog

Dry Brand Used Most Often - by Size of Dog

  Total Canned % Small Dog % Medium Dog % Large Dog %

Total Purina Brands 15 14 17 16

Purina Dog Chow 8 7 10 9

Purina O.N.E. 4 3 5 4

Total Heinz Brands 12 9 16 10

Kibbles'n Bits 8 8 8 5

Gravy Train 3 * 4 5

Pedigree Mealtime 9 9 11 12

Total Nestle 8 6 7 9

Alpo 5 3 5 6

Friskies Come'n Get IT 3 3 3 3

Hill's Science Diet 6 5 6 8

Iams 3 3 2 5

Store Brand 6 3 8 9

Other 14 12 12 17

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(Base) (505) (233) (191) (174)

* = Less than 0.5%

Note: Bolded numbers indicate meaningful differences between groups

  

Exhibit II

In Exhibit II, female employment does not add to 100% because some households have no females in them.

Demographic Profile of Small, Medium, and Large Dog Owners

  Total Users %

Small Dog % Medium Dog %

Large Dog %

Age        

Under 35 Years Old 14 13 18 17

35-44 Years 23 21 24 28

45-54 Years 25 26 25 24

55-64 Years 17 19 14 16

Ages 65 & Over 20 21 19 15

% Female 69 67 71 72

Household Status        

Married 63 61 63 66

Single Parent 13 14 12 14

Female/Male Living Alone 19 21 21 13

Living with Non-Relative 6 6 4 7

Residence        

House 82 81 81 87

Apartment/Condo 7 7 7 6

Mobile Home/Other 11 12 12 9

Household Size        

1 Member 19 20 20 13

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2 Member 38 38 39 39

3 Member 19 18 17 21

4 or More Member 24 24 24 27

Mean HH Income (000) $43.4 $44.9 $40.9 $45.3

Regions        

East 22 22 20 24

Central 19 16 20 18

South 36 35 39 37

West 23 28 20 21

Market Size        

Rural/Under 100,000 26 23 30 26

100,000-499,999 15 13 17 13

500,000-1,999,999 20 24 15 22

2MM or More 40 40 38 39

Female Employment        

Employed Full Time 37 34 39 40

Employed Part Time 13 11 13 16

Not Employed 16 14 20 18

Retired 17 23 13 10

(Base) (505) (233) (191) (174)

         

Note: Bolded numbers indicate meaningful differences between groups

Exhibit III: Image Dimensions

Exhibit III represents the results of factor analysis. Research participants respond to a number of questions. The inter correlation in their responses is used to create dimensions. In this case, there are 7 dimensions including "All Around Best," Contemporary, etc. The main items associated with each dimension are shown. These are items that are particularly highly related to the other items comprising the dimension. The loading reflects the extent to which an item is related to other items representing some dimension and high loading items are used to label or name the dimension. The negative loading on "Is Cheap" on the Expensive dimension is negative because it is inversely related to the other items.

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Item Loading

All Around Best  

Is the brand I can count on to please my dog .81

Make me feel good when I give it to my dog .79

Is a good value for the money .74

Is a brand I'd recommend to a friend .71

I have fun feeding this brand to my dog .70

Is the only brand of dry dog food my dog needs .67

Has a taste dog loves .65

Contemporary  

Is a contemporary brand .69

Has pieces my dog can easily chew .67

Has the right level of protein .57

For All Dogs  

Is for small dogs .80

Is for large dogs .79

Variety  

Contains both crunchy and chewy pieces .83

Contains a variety of tastes, shapes and colors .82

Has a variety of flavors available to purchase .45

Real Beef  

Contains real beef .68

Contains real meat .59

Out-Dated  

Is an out-dated brand of dog food .71

Contains too much fat .70

Is not as good as it used to be .65

Gets too dried out when I store it .64

Expensive  

Is expensive .75

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Is recommended by veterinarians .60

Is recommended by breeders .57

Is cheap .49

HistoryIn 1934, Mars Confections, a large chocolate confectionery company that had been based in Slough

since 1932, acquired Chappel Brothers in Manchester. This company sold off cuts of meat for canned

pet food as Chappie; meat which is unfit for human consumption.

Mars Inc

Pedigree is now a subsidiary of Mars, Incorporated. The UK division of Mars Inc. has been called Master foods since January 2002, until it was split into 4 separate entities in 2007 : Mars Pet care UK, Mars Complementary Pet care UK, Mars Chocolate UK and Mars Food UK. Previously it was Pedigree Master foods and Mars Confectionery (a division, making the Mars Bar, is based in Slough).

Selection of Pedigree dog food

The company makes the market leaders Pedigree (dog food) and Whiskas (cat food), as well as Kitekat (cat food) and Pal (dog food). The slogan used for many years for Pedigree dog food is "Top breeders recommend it" with a current slogan of "We're for dogs". For Whiskas' the old slogan was "8 out of 10 owners say their cat prefers it" and for Pal it is "Prolongs Active Life".

In the United States, the original slogan for the Pedigree brand was "Recommended by top breeders". It was replaced in 2007 by "Dogs rule".

Our missionThrough no fault of their own, more than four million dogs end up in shelters and

breed rescue organizations every year, and nearly half of them never find a place to

call home. Our mission is to help those dogs by providing grants to 501(c)(3)

shelters and rescue groups—and by encouraging dog adoption.

The PEDIGREE Foundation is a philanthropic organization dedicated to helping dogs in need find

loving homes. We provide grants to 501(c)(3) dog shelters and breed rescue organizations, and help

dog lovers adopt, volunteer, and make donations.

Advertising:

Print and visual ads Signboards, hoardings, POP materials

Packaging material inserts, etc

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Hence medium and the message to be conveyed play a major role in advertising.

Bikkies slogan; “ Happy dogs, healthy dogs!!”

It's a Dog's Life with Pedigree Ads

The Progression

It is interesting to see how the ads have changed over the years. Below are a few of the ad campaigns Pedigree launched between 2006 to 2008.

2006

Pedigree launched two campaigns from TBWA Paris this year.

The first appeared around April ,with the tag line: "Because dogs don't always have it easy."

Source: Ads of the World

2007

In November, TBWA/Chiat/Day, New York launched an ad campaign with dogs passing along the

benefits of Pedigree.

Then, in December, TBWA, Wien, Austria came out with "For Strong Dogs,"

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The inference is that small dogs are so energized by Pedigree they can use a dog flap set high in the

door.

2008

Pedigree's latest campaign, released in January by TBWA/RAAD Dubai, UAE, professes that "When

dogs eat well, they dream well."

“Adoption Drive "is a multi-million dollar, cause-related awareness and fundraising campaign that

rallies dog lovers to help millions of homeless dogs that end up in shelters and breed rescue

organizations throughout the world." This one really fits the concept of Disruption, make an actual

change in the way we view dogs.

Celebrate the 2nd Annual Dogs Rule Day

October 8, 2009

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If anyone deserves their own holiday, it’s dogs. So let’s celebrate our best friends and recognize their

contribution to the quality of life on earth. All we have to do is give our own dogs a little extra love,

share our stories and pictures on this page and do a little something extra to make the world a better

place for dogs.

Our mission is to help dogs in need find loving homes. We see a day when every dog is adopted into a forever home.

Yes We Can – Adopt a Dog

Pedigree wasted no time in getting a print ad to press following President-Elect Obama’s promise to his daughters to bring a puppy to the White House. The ad ran in last Thursday’s edition of USA Today and features an adorable shelter dog in need of a home. “…We think you’ll find that shelter dogs are among the most loyal, loving and special dogs in the world. And no dog is more in need of a little hope,” says the ad (see below).

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SWOT

Strengths:

Saves time and money

Dog food is a relief for the consumer because it saves time and money when feeding a dog. The dog food is a growing industry.

Each day, all over the world we have more people that are willing to spend more money on their pets.

It is estimated that the industry of pet supplies and pet food will continue to grow 19% with an annual increase of over 3%.

Market leader for pet foods.

This encourages buyers to purchase in quantities without any kind of hesitation.

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Well established brand

Helps the product to use its parent company tag until it can stand by its own.

Weaknesses:

Service is not available for demonstration or expert advice, etc Low brand loyalty

The customer of dog food is usually not loyal to any special brand because at the first rejection of the dog the consumer will switch to another brand. Also, if the customer does not find the brand that they usually buy, they will select another one. We must try and introduce a wide range of vegetarian and non-vegetarian food with organic components.

High production cost since raw materials are expensive.

In order to produce high-quality dog food, we will have to use premium ingredients without artificial colours and preservatives. This will implicate a high cost in production; therefore, final product will not be cheap. However, one way to deal with this problem is to emphasize the high quality of ingredients used in ““Happy and Healthy”” when the product is promoted.

Opportunities:

Main focus is to provide “healthy dog food with good flavour.”

Currently, 70% of dogs die of heart attack due to overweight. Based on this fact, we believe that offering healthy food with good flavour such as dietetic wet food, organic dry food, vegetarian food, and snacks made of tofu, etc.

Exploiting new market segments.

This helps create better quality products using varied resources.

Convenience of buying dog food

This cannot be substituted with another food. It is a lot easier to buy canned food that can be stored for long time instead of preparing homemade food after a long day of work. The consumers will be pleased to know that ““Bikkie”” meets the standards of nutrition needed to keep their dogs in good shape.

Diversity of dogs

Helps ““Bikkie”” offer a variety of products to satisfy the demand.

Loyal customers

Dog breeders are potential consumers and probably the most loyal ones to a brand product when they

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find the right one. Therefore, ““Happy and Healthy”” is ready to introduce a premium line of product for dog breeders.

Threat:

Direct competition

Companies such as IAMS, Purina, Alpo, Puppy Chow and Premium Dog Food.

Positioning

Pedigree bikkies come under the product differentiation strategy. Here a new idea is launched on an existing base. Nutrition is the USP of the product

User segment:

Customers are dog owners, vets, breeders, etc. whereas the final consumers are dogs. Positioned as a necessity for dogs daily nutrition. Ads talk about shinier fur coats and happy,

playful companions-Dogs

Geoff Moore’s Product life cycle:

Bikkies is at its introduction stage now.

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Objectives: increase product awareness and trial encouragement.

Marketing mix

Product

Bikkies is a type of product (brand) extension from dog meals and snacks to their biscuits. It provides the basic offering.

Packaging:

a. Is attractive and usually in colour yellow.

b. Has mention of usage and daily consumption patterns. Safety instructions are mentioned.

c. Comes in gift packs for dogs birthday and other occasions.

Price:

A sales oriented approach is followed in order to increase sales volumes through promotions. Market share needs to be increased or maintained constant.

Based on government regulations and competitors price.

Target customers ability to pay; here the dog owners.

Bikkies demand estimation and profit margin for Pedigree.

A cost plus pricing is followed where a certain amount is added to the total production cost as a mark up. Bikkies small 500 gms.) - Rs.200, medium ( 1 kg.) - Rs350 and large (2kgs.) – Rs 750.

Pricing strategy:

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Product bundling and promotional schemes; pedigree bikkies can be given as a free item on purchase of a 5 kg snack.

Also the buy 2 for 40% off schemes could be introduced.

Place:

A selective distribution network is chosen to facilitate sale of goods through limited number of retail outlets, etc

Web presence and interactions thereon

All Royal Canin speciality stores, super markets, departmental stores, etc.

Promotion:

Must be awareness oriented, should make bikkies as an attractive buying option Must generate interest and favourable view towards pedigree and its services

Must arouse the desire to purchase.

Tools for sales promotion:

Incentives and gifts; these can be given to the dog owners, vets, breeders, etc in order to buy the product

Discounts can be offered on its purchase

Dog shows can be an excellent platform for promoting bikkies through sponsorships, etc.

Shop/ window displays, POP etc prove to be an important aspect

Free samples in small packs can be distributed.

Coupons for grooming sessions, etc can be distributed.

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PR:

Annual reports are displayed on the website. Community relations are built and maintained through rescue operations and interactions

Events and sponsorships:

PEDIGREE® Pet DayPEDIGREE® announces a day of fun and frolic for your dog and you. The 1st Pet Day, there will be loads of activities for your dog, educational events for you and your kids, not o mention prizes and freebies. So get your dog and your family to:

City : BangloreDate : 24th October

Pedigree Petday Team

Performance by Police Dogs & Commando Kennels

 

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Pedigree food ingredients:

Adult dog Chicken & Veg

Vegetables and chicken provide high quality protein for muscle strength and healthy body.

MNP (Macro Nutrient Profile) Min. crude protein......................20.0% Min. crude fat..........................10.0%

Max. crude fibre.........................5.0%

Daily feeding guide

Approx. adult body weight/ Age of reaching aduthood

BreedsRecommended Daily Feeding (in Gms.)

Small ( up to 10kg) 7-9 months

Miniature Pom

125 - 160

Pug/ Tibetan Spaniel

150 - 200

Lhasa Apso 160 - 200

Terriers 160 - 200

     

Medium (10 to Dachshund 200 - 250

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25kg) 9 - 12 months

Cross Breeds 225 - 300

Spitz (Indian Pom)

250 - 280

Cocker Spaniel

300 - 375

Beagle 325 - 360

     

Large (25 to 30kg) 12 - 18 months

Boxer 400 - 475

Cross Breeds 400 - 500

Golden Retriever

425 - 525

Dalmatian 450 - 525

Labrador Retriever

450 - 550

Doberman 475 - 550

German Shepherd

475 - 575

     

Giant (50 - 100kg)

Great Dane 125 - 160

Neopolitan Mastiff

150 - 200

St. Bernard 160 - 200

Mastiff 160 - 200

Conclusion

The dog food is a growing market, but is too competitive, and the consumer is not loyal to any special brand. At the end the dogs are who make the decision in the market. The dog food is a wide market because it offers a variety of products. The market is saturated by products made in the US, leaving a little opportunity to foreigner brands.

The premium products are the most popular in the market being an important target to explore.

Consumers who are animal lovers are willing to spend more money, day by day, in order to keep their dogs strong and vigorous. For this reason, ““Bikkies”” is the snack for champions.

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