First in Show Case Study

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.


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


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


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


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.


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


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


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


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.


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.


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.


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.


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.


References:


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/

http://www.whatsnextblog.com/2007/10/ok_times_up_while_youre/

http://www.allbusiness.com/company-activities-management/product-management/11564744-1.html

http://www.allbusiness.com/company-activities-management/product-management/11564744-1.html

http://www.boston.com/business/articles/2009/02/10/wal_mart_drives_for_more_mass_grocery_business/

http://www.boston.com/business/articles/2009/02/10/wal_mart_drives_for_more_mass_grocery_business/

First in Show Case Study

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