Tyler Pet Foods Case Analysis Essay
Tyler Pet Foods Case Analysis
# 1. How would you describe the household dog food market? Sales of dog food are approximated at $5.6 billion for this year of which $3.1 billion will come from supermarkets. As the previous figures show, 55% of all dog food sold in the United States will be distributed through supermarkets. Since there exists such a reliable correlation between human population and dog population, we can say that the greater Boston area represents approximately 1.5 percent of the US dog population. Due to our human desire for companionship and need for protection, dog ownership is on the rise, which will eventually result in increase sale in the dog food industry.
Although there are over 50 dog food manufactures and about 350 dog food brands in the United States, 83 percent of supermarket dog food sales is held by five companies ” Ralston Purina (30%), Kal-Kan Foods (19%), H.J. Heinz (17.9%), Nestle USA (12%), and Nabisco (4.3%). The remainder of the market (16.8%) is held by other private labels.
# 2. How might one segment the dog food market and where does Show Circuit fit? One possible way to segment the dog food market would be by categories. We can categorize the different foods in four forms including; canned, dry, semimoist and biscuits/treats (see pie chart attached to see share of market held by each category). The introduction of Show Circuit would add a new category to the list, which would be the frozen dog food form.
If we look at the entire dog food market as a starting point we can see that the price of dog food varies greatly depending on its form. The prices vary form $.63/13.2 oz cans to $9.99/13.5 lbs bags. From this analysis, we can say that Show Circuit being priced at $6.37 per case (12 tubs of 15-once each per case) will be very competitive selling at $0.53/15 oz tub.
# 3. How might Show Circuit be positioned in the dog food market? Tyler Pet Food has long been recognized for its high quality dog food distributed mainly to show-dog kennels. To continue in the same direction Show Circuit should be positioned as the finest dog food. Although it may not be the lowest priced food available, the higher price aspect will be compensated for through differentiation. This food will differ from competition in its form, which will be frozen, and in the idea that it is made of all organic material.
# 4. What is the market potential for Show Circuit? According to the brokers Show Circuits advertising should be targeted at singles and married between the ages of 21 and 50 with a household income greater than $25,000. The main reason why such a target market was chosen was that these individuals tend to regard their dogs as part of the family. Therefore, they want to give it the best food out there and provide them with necessary care. Income plays a big role in establishing the potential for Show Circuit. It is estimated that over 63 percent of households with incomes greater than $25, 000 invest in pet food, supplies and care. This represents a large population.
We also mentioned earlier in the analysis that the greater Boston area represented a population of 1.5 percent of the population, which means approximately 1.5 percent of the dog population. Since the human population of the US is estimated at —— that represents approximately —– dogs. If I assume that a dog could eat one 15-ounce tub in a day then that would generate about $—— ($.53*—-). This is a daily figure of the potential revenue that could be generated from the greater Boston area.
# 5. What is the marketing program economic of Show Circuit? One major obstacle that comes to mind when we think of selling dog food in the supermarket next to the frozen foods is the possible resentment on the part of the supermarkets. However, some of the work has already been cut out for Show Circuit in the Boston area. There already exists a frozen dog treat called Frosty Paws that is available in the ice cream section of supermarkets. It may be hard at times to convince buyers that some space in ice cream section should be allocated to frozen dog food. To overcome this obstacle, it may be necessary to offer higher profit margins to increase purchase.
# 6. What does an appraisal of the introductory program tell us? The general media strategy has several advertising objectives including: 1. Create awareness of new brand – In order to achieve this objective, TPF will have to educate their sales representatives so they can further sell the product to supermarkets. The main focus should be the possible benefits that pet owners could get by using this product.
2. Obtain distribution through grocery outlet – With the help of the sales packet it should be easier for representatives to sell their product to supermarkets. Although there is a high margin for frozen foods, representatives must overcome this objection by persuading the buyer that there is a greater product turnover, which will compensate for the potentially lower margins for Show Circuit. I believe that a budget of $30,000 for slotting fees paid to supermarkets to buy freezer space is a very good idea and should be incorporated in the budget.
3. Motivate trail through coupon redemption – TPF plans to issue coupons in several local Boston newspapers and well-known magazines (Better Homes and Gardens and Dog Fancy). One strategy that TPF may want to look at is a pull strategy by advertising the product before it is available, rather then a push strategy.
4. Motivate trail through emotional impact on television -TPF plans to spend a bulk of their budget on television advertising, which is a very good channel to reach a large amount of people but they should rethink the show they have chosen to air their spots. TPF’s target market does not seem to be the type of people who would still be up to watch “The Late Show with David Letterman”.
# 7. Should the promotion program be accepted, rejected or modified? The promotion program should not be accepted as it is now but rather some modification should be made before acceptance. To begin I would say that the best budget level for Show Circuit would be $400,000 since it is a fairly new low cost product and we can not estimate with much accuracy the potential success I would not invest more than the minimum. Moreover, I would probably reconsider the time spot chosen to advertise on television. It might be wiser for TPF to air their commercials either during the 6:00 or
10:00 news or even during syndicated show that feature dogs, such a s “Fraiser” or “mad about you”. These syndicated shows have dogs treated like members of the family, which is exactly the message that TPF is try to portray.