Flamenco Foods Entering theUS Market · Recommendation1: SelectingTarget Audience Recommendation2:...
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Flamenco Foods Entering the US Market Peter Nam, Peter Kim, Michelle Lu, Ishaan Madan, Suhaib Khan, Young Jung
Transcript of Flamenco Foods Entering theUS Market · Recommendation1: SelectingTarget Audience Recommendation2:...
Flamenco Foods Enteringthe US Market
Peter Nam, Peter Kim, Michelle Lu, Ishaan Madan, Suhaib Khan, Young Jung
Executive Summary
Market and Problem Analysis
Recommendation 1: Selecting Target Audience
Recommendation 2: Focusing Distribution
Recommendation 3: Optimizing Pricing and Promotions
Forecasting Future Success
Market and Problem Analysis
Competitors Price Market Trends
Competitors Price Market Trends
• Kraft is a juggernaut(76% of niche productcategory)
• Niche markets are fillingup rapidly.
• Consumersdissatisfied with price
• Low profit margins
• Rising child obesity-parents have greaterconcern over nutritional values
• Comfort-food meals arean afterthought
R1: Selecting Target AudienceUnderstanding current market trends can help Flamenco Foods select an appropriate target audience
FAMILY
-SENSITIVITY: Kids and Parents are more interested in advertisements and more apt to repurchase products than non-parents.-CHILDREN: A kid’s interest in a product will increase the likelihood of repeat purchase.
UTILITY
-CONVENIENCE: Customers are busier than ever. Prepared foods is one of the fastest growing industries-FOR PARENTS: Ready-to-go and pre-packaged foods require minimal preparations. They are easy for families.
DIVERSITY
-ETHNIC FOODS: The growth of various ethnic groups is impacting mainstream American food trends.-NICHE: The absence of Hispanic themed combination lunch products in the market creates a competition vacuum.Source: NU’17 Nielsen Case Study &
MultiAdKwikee
Current trends in the combination lunch industry give Flamenco Foods opportunities to find market share.
R1: Selecting Target AudienceSelecting to focus on the Hispanic community will help Flamenco Foods find success
12%
10%
14%
15%
16%
5%
6%
7%
8%
10%
0% 5% 10% 15% 20%
Adult children
Kids 13-17 years of age
Parent(s)
Kids 6-12 years of age
Kids 5 years of age and younger
Who typically goes with you on routine grocery trips?
Total US Hispanics
Most Hispanics shop with company, and more than 50% of Hispanics with children are taking them shopping.
Source: AMG Strategic Advisors & Univisions Communications Inc., On the rise: The Growing Influence of the Hispanic Shopper
R2: Focusing Distribution
Targeted marketing captures 40% of hispanic market while only targeting 13% of US Grocery Stores and 8% of Mass Merchandisers
Mass Merchandisers
Grocery Stores
18X US Average
5x US Average
Rate of visiting Food stores for Hispanic Pop.
Targeting grocery stores and mass merchandisers in counties with high Hispanic population
Source: PEW Research & HealthGrove Food Access and Availability
Source: Acosta: Buy Hispanic
Mitigating market entry factors by starting small and with a surefire demographic
R2: Focusing Distribution
Hispanic Pop.
52m (16%)
US MarketTotal Pop.:
319 m
Hispanic Pop.
21m (43%)
Targeted Market
Total Pop.: 49m
Stocking Fees Prevent Market Entry
Appealing to Hispanic-
dominated areas
increases trial rate
Targeting specific regions reduces overall
costs of distribtion
Stocking fee per regional cluster for one supermarketchain is $25,000. With our
proposal of 7 regional clusters. Distribution costs amount to$150,000. Much lower than
the original proposalSource: Forbes.com
Calculating the impact of price change in the sales using price sensitivity matrix
R3: Optimizing Pricing and Promotions
1% price decrease
2.1% sales increase
New Optimal Price: $2.87Revenue: $13.4 M (39.7% increase from original $11.6 M)
Price sensitivity• Gross Revenue at Mass
Retailers and Grocery Stores
• Average Price Sensitivity adjusted for the ratio of revenue
R = 3.89(1-r) * 3,000,000(1+2.1r)
Variables• Sales Forecast volume• Intended Price• Price Discount• Final Price
Source: PEW Research & HealthGrove Food Access and Availability
R3: Optimizing Pricing and PromotionsOptimizing promotions through comparative sales and revenue analysis
2-Month TPR @ 25%
167-Day TPR @ 5%81-Day Display @ 5%81-Day Feature @ 5%58-Day F&D @ 5%
3
11.67
2.87
11.74
3.28
13.82
0 2 4 6 8 10 12 14 16
Unit Sales
Revenue
New Promotion
Without Promotion
Initial Promotion
Forecasting Future Success
Unit Sales (M) Revenue (M)
Nielsen Estimation 3 11.67
Post Promo 0.28 2.15
Post Price Reduction 1.64 1.73
Current Forcast 4.92 15.55
Market Entry Requirement 3.6 14.00
Predicting growth in sales and revenues with the recommendations above
