International Marketing Strategy

Lauren Colvin

Patrick Lynch

Megan Revoldt

Kate Turkcan

International Entry

Identify a target market in the UK Adapt the product to fit target market

preferences Design a supply chain that accounts for

production and distribution Implement a communications strategy to

reach target market and induce trial of product

Segmenting the Market 20—29 age group

Metropolitan University students Young professionals, single Need for convenient and inexpensive food option

Parents Metropolitan & Suburban Middle to Upper class Young children—Age distribution between 5—14: 7,581,000 Age distribution between 25—39: 12,915,000 Influenced by children

60+ age group Retired Need for convenient food options

Target Market 20—29 Age Group

Age distribution: 7,599,000 people

Single, working professionals

Students attending universities

Fast-paced lifestyle Seeking convenient,

inexpensive alternatives to eating out and cooking

Very brand conscious – developed at an early age

The “Student Pound” ≈ £14 billion annually = $26,864,766,335

43% of 18 – 24 year olds experience a form of higher education

Spend a good deal of time… At pubs and bars At the cinema In restaurants (mostly fast

food) Participating in sports

Target Market

VALS 2 Category Experiencers

Young and compulsive Excited about new products that will give them the

edge, or new experience they desire

Target Market

PRIZM Segments Young Influencials

Traditionally referred to as “yuppies” Middleburbs, college graduates, young professionals

Up and Comers City centers, more mature, athletic activities, and night

life Boomtown Singles

2nd city, young working class, high value on functional and convenient things in their lives

Adapting Uncrustables to the Market

Modifying product to meet consumers preferences in the UK Replace current peanut butter & jelly and grilled

cheese filling with the combined ingredients: pizza sauce, cheese and pepperoni 60% of frozen pizza sales—cheese and pepperoni

Replace white bread with thin layer of pizza dough

Pizza is one of the nation’s top 10 most frequently consumed foods.

Marketing Objectives Expected Sales (dollars and units):

Frozen pizza sales US—2004: $2,782,254,592 Uncrustables sales US—2004: $27,500,000

Ratio 10.12 / 1

To account for first-year product introduction in a new market, estimated sales will be 2% of UK frozen pizza sales

Frozen pizza sales in the UK—2004: $645,478,720.95 $645,478,720.95 (.02) = $12,909,574.42 Estimated retail price = $3.44 per unit Total units sold = 3,752,783

Marketing Objectives

Extent of Market Penetration Population of Target Market = 7,599,000 Objective is to induce trial and repeated purchase

in 15% of target market. 7,599,000 (0.15) = 1,139,850 consumers

In order to reach expected sales value, each of the 1,139,850 consumers will have to spend approximately $10 on the product in 1 year

Brand Equity & Positioning Creating a strategic alliance with

Goodfella’s Pizza, produced by Green Isle Foods and owned by Northern Food Plc

Goodfella’s is the leading frozen pizza brand in the UK—owning 23% of the market. 2004 sales--$148,472,836.31 Average price range per unit—

£1.94—£2.99 ($3.69—$5.69)

Positioned as a quality pizza, made with the finest ingredients and designed to create a fresh-baked pizza experience in your own home.

Brand Equity and Positioning

Partnership Agreement Green Isle Foods responsible for producing

product in Naas facility Smucker’s responsible for contracting distribution

and storage Specific marketing team responsible for the co-

branding of product Coordinate strategy consistent with Goodfella’s and

Smucker’s image and reputation

Brand Equity & Positioning

Top competitors: Chicago Town Pizza—owned by Schwan’s (US)

2004 sales--$109,435,758 Dr. Oetker Pizza—family owned enterprise (GR)

2004 sales--$53,852,413.24

Positioned against the competition—Goodfella’s Stuffed Pizza Pocket are an affordable, convenient, on- the-go, single serving of that great pizza taste that you expect from Goodfella’s.

Product & Branding Decisions

Brand Name Goodfella’s Stuffed Pizza Pocket

Product Decisions Important factors:

Convenience Taste Price Cooking method Portion size

Core Product Decisions

Stuffed Pizza Pocket 6 inch diameter

Round in shape (like a small baked pie)

Thin layer of pizza dough stuffed with pepperoni, mozzarella and provolone cheese, Goodfella’s specialty sauce and sprinkled with parsley

Packaging Decisions

Packaging Materials for Stuffed Pizza Pocket Cardboard box 1 stuffed pizza pocket wrapped in plastic

Package Design Rectangular box

Size takes into consideration small freezers in the UK

Package Colors Primarily red, white and green—consistent with

Italian cuisine

Labeling Decisions

Content Brand Name Visual of Stuffed Pizza

Pocket Nutritional Information Ingredient List Preparation Instructions

Shelf Life Storage Conditions Contact information for

Green Isle Foods Place of Origin Bar Code

Distribution Decisions

Manufacture of Product Green Isle Foods—wholly owned subsidiary of

Northern Foods plc One of the UK’s largest food manufacturers

Produce frozen convenience foods for the Irish and UK retail markets

Distribution Decisions

Green Isle Foods operates facilities in Ireland State-of-the-art manufacturing technology in plants Described as a “specialist in food conversion /

assembly, with manufacturing capability as its core competence.”

Flagship facility for pizza is the plant in Naas, Co. Kildare Recently expanded under a £25 million investment project

—incorporated the most advanced baking, topping and packaging technology.

Distribution Decisions

Distribution of Product McBurney Refrigeration Ltd

Full range of refrigeration haulage Depots in Dublin and Liverpool Cold storage and chilled food distribution center on a

12 acre site in Liverpool to service increasing food import traffic from Ireland

Distribution Costs Trucking from production facility in Naas to port in Dublin

(17 miles) $2.11 per mile (17 miles) x 2 for refrigeration = $71.74 Round trip = $143.48 per truck Each truck can hold 10,000 lbs

One box = 0.8 lbs Each truck can transport 12,500 boxes Need to transport 308,430 boxes per month 308,430/12,500 = 25 trucks per month

25 trucks x $143.48 = $3,587 month x 12 = $43,044 $43,044 + 34% markup = $57,679 per year

Source: Freight Transport Association of UK

Distribution Decisions

Distribution of Product Dublin Port Company

“The Gateway between Ireland and the World” Principal port in the Republic of Ireland Positioned at the hub of national road and rail network Has terminals and facilities to the highest industry

standards

Distribution Decisions

Distribution of Product Derek Horner Agencies Ltd.

Customs clearance is performed in-house Full port agency services Containers provided to suit all types of cargo

Temperature controlled containers 1 sailing weekly from Dublin to Liverpool

Distribution Costs

Ferry from Dublin to Liverpool 6 trucks per week holding 60,000 lbs of product Shipping 60,000 lbs = $22,800

Includes refrigeration and markup $22,800 x 52 weeks per year = $1,185,600 per

year

Retail Distribution Regions

Shipping to 12 regions throughout the UK

Each region maintains 100 trucks, which operate through a centralized warehouse equipped with frozen storage facilities

Trucks then disperse to assigned retail outlets using a “just-in-time” inventory system

Distribution Decisions

Retail Outlets within UK regions Tesco—10 depots supply to 779 stores Somerfield—15 depots supply to 1,275 stores Sainsbury—12 chilled depots supply to 498 stores ASDA—19 depots supply to 258 stores Safeway—18 depots supply to 481 stores

Distribution Costs

Trucking from Liverpool to regions, then regions to retail outlets 1,200 trucks total Cost per truck = $1,564 $1,564 x 1,200 trucks = $1,876,800 per year

Storage costs throughout the 12 regions $10,000 per warehouse in each region x 12

regions = $120,000 (markup and refrigeration included) per year

Total Costs—per unit Production costs: 15% of $2.50 retail price (US) = $0.38 Truck from Naas to Dublin: $0.02 Ferry from Dublin to Liverpool: $0.32 Trucking throughout UK: $0.50 Storage in UK: $0.03 Total cost per unit: $1.25

50% markup Total revenue: $1.87

60% markup $1.12 Retail before tax $2.99

15% markup $0.45 Retail after VAT $3.44 =

£1.80

Promotional Budget

Profit per unit = $0.62 Total profit = $2,326,725 Northern Foods receives 55% of the profits

35% of profits go towards compensation for production costs which are 30% of the total costs

Payment for use of Goodfella’s brand name = 20% of profits

Northern Foods profits = $1,279,699 Smucker’s profits: $1,047,026

Promotions Decisions

Communication Objectives: Create awareness of the Goodfella’s Stuffed

Pizza Pocket among 25% of the population between the age of 20—29, specifically those in need of a convenient, affordable and quality product within one year.

We hope to stimulate trial among 15% of target population.

Promotions Decisions

Overall Message Stuffed Pizza Pocket is an affordable, easy to

prepare and consume product for those on-the-go and time-constrained members of the target market.

Purpose of the product—make the daily hassles of cooking less of a burden for the target market. Allows them to focus their energies elsewhere. The size and quantity of the product make it a reasonable substitute for a traditional meal.

Promotional Decisions

Creative Strategy Deliver clear, compelling message

Emphasize what is important to target market This age group cares about saving money

Consistent message The Big Idea

“Keeps you and your wallet stuffed”

Media Vehicles

Outdoor Advertising—91% of promotional budget

$952,794 Objective: Create awareness and stimulate

interest in product among the target market Reach and Impact Increases product credibility Strategically placed in high traffic areas and easily

viewed Creative and memorable

Media Vehicles

Outdoor Advertising Billboards

Contract with ClearChannel Billboards Purchase campaign type “National Cover A” which allows

for 100 billboards throughout the UK The budget will not allow for continual display of

billboards throughout the one year period Billboards will appear at the introduction of the product to

create awareness and will reappear throughout the year to serve as a reminder to the target market

Billboard expenditure: $688,745

Media Vehicles

Outdoor Advertising Ambient Media Expenditure: $264,049 Viacom Media offers general site packages for

Tube display

Media Vehicles

Sales Promotions—9% of promotional budget Objective—to engage and motivate potential

buyers Supplementing advertising and facilitating

personal selling—promotional giveaways Goodfella’s and Smucker’s brand reps distribute t-

shirts at local pubs/bars in each region 12,000 t-shirts x $0.33 ea. = $3,960 per month Annual cost: $47,520

Generate buzz and word-of-mouth Sales promotion expenditures: $47,520

Media Vehicles

Public Relations Objective—to promote a positive image, generate publicity

and foster goodwill Promotion on Green Isle Foods website

Promotes that product is available and relatively inexpensive method of communication

Other Examples—media coverage, hosting special events and sponsoring charitable campaigns

Disadvantages—cost, lack of control

Not feasible at this time beyond website publicity

Media Vehicles

Direct Marketing Objective—this form of advertising is aimed

directly at target consumers, usually in their homes, attempt to get them to take action

Examples—catalogs, coupon mailers and letters are common forms of direct marketing

Not an effective approach to reaching target Not feasible at this time

Media Vehicles

Event Sponsorship Objective—opportunity to reach niche market,

create awareness and enhance image Relatively new product and Insufficient funds Not feasible at this time

Media Vehicles

Advertising Any paid form of media communication

Television—high absolute cost, high production cost, short message life

Radio—low attention getting, audio only Print

Magazines—long lead time for placement, visual only Newspapers—poor reproduction quality, selective reader exposure

Disadvantages—cost, lack of feedback Not feasible at this time—will pursue options upon growth

of product

Summary

Target market—20-29 years old Strategic alliance with Goodfella’s Pizza (Northern

Foods plc) Stuffed Pizza Pocket – “Keeps you and your wallet stuffed”

Produced in Ireland and distributed throughout 12 UK regions

Product promoted through outdoor advertising, ambient media and sales promotions