Saxonville Sausage Company

Case Analysis Saxonville Sausage Company

Saxonville Sausage Company

Background

Saxonville Sausage Company is a seventy year old family owned business located in Saxonville, Ohio; the company manufactures a variety of fresh pork sausages which are sold throughout the United States. The company produces a form of Italian sausage under the Vivio brand that accounted for five percent of the companys revenues, the Italian sausage line has been growing steadily for the past two years and future growth is expected. The company has seen dismal performance in its other brands of sausage, in two (2) years, there has been zero percent increase in sales volume, thus the need to boost profit. In order to achieve its profit objective, Saxonville whishes to launch its Italian sausage brand. The company employs a new product marketing director to launch the Vivo brand Italian sausage across the United States to increase its current distribution from sixteen percent in national supermarkets. The product marketing director sought to employ strategies to develop a plan that will guarantee increased profitability.

S.W.O.T analysis The below listed analysis assesses Saxonville Sausage company internal abilities and their ability to compete externally. Strength

Saxonville offers three main pork sausage products: bratwurst, breakfast sausage, and Italian sausage

Saxonville products are sold widely throughout the United States therefore consumers are familiar with the brand

Weakness

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Saxonville produces fresh sausage, they do not manufacture smoked or dried sausage The Saxonville name is associated with German heritage thus impacting on the company breaking into the Italian sausage market The company have limited distribution of bratwurst and breakfast sausage to the northeast United States Sales are flat or declining, there is zero percent volume increase nationwide and minimal growth is expected in the short term for bratwurst and breakfast sausage Introduced Italian sausage brand based on packaging with no form of promotion Saxonville have not conducted any market research on the Italian sausage customer and was skeptical of positioning,

Opportunity

Saxonville employed a product marketing director to launch the Vivio brand Italian sausage into a growing market for Italian Sausage

Italian sausage category is growing rapidly in the United States Plans to market Italian sausage to be meal solution and meal ingredient, rather than whole meal to the females who are predominantly sausage users

There is no national Italian sausage brand Customers in the Northeast are willing to try other Saxonville products based on the trust they have in the Vivio Italian sausage

Threat

Competitors either put emphasis on authentic Italian heritage or freshness and being locally-made similar to how Vivio has categorized itself,

Some brands do some TV/radio advertising and others advertise trade deals in newspapers and store circulars to increase market share

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Customers outside the Northeastern U.S. are wary of buying Italian sausage from Saxonville, a German heritage company.

Assumption and missing information The new product manager, Ann Banks employed key marketing strategies in order to make the Vivio brand sausage successful, her application of product positioning failed to acknowledge the role of the competitor. She did not compare the Vivio brand with that of other players in the market, according to Winer and Dhar Positioning takes the competitive advantage and plants in the mind of customer so that it is clear what the product stands for and how it is different from other offerings in the product category (page 50). The value proposition for the Vivio brand sausage was not clearly defined, thus the way in which the sausage would be marketed is for householders to purchase Italian sausage which can result in customers purchasing any brand of Italian sausages.

Differentiation strategies to gain competitive advantage is a good way in which Saxonville Sausage company can ensure product success. The basis on which customers will choose your product over the competitors. This is called competitive advantage. (Winer and Dahr, page 44). If products are similar in their offering and benefits are the same, customers will not be able to distinguish the Vivio from other products, thus the customer will purchase a product based on price. Since Vivio Italian sausage does not seem to have price difference from the other products. The new product manager, Ann Banks, should have incorporated competitive advantage

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strategies, employment of this strategy will allow for the following: Development of a better product that is sold at a high price to achieve the Saxonvilles objective of increase in profit or Consider long-term road to instant profitability by increase market share by coming into the market at a lower price. Saxonville Sausage Company did not consider improving sales in the other products manufactured or try to determine why these products are under performing. It would appear that these products have reached their maturity stage as stated in the case; however, these products can be reenergized by applying strategies that would determine the market position of the product and by investing in the product. They have done little or no market research in order to determine the breakfast sausage market to determine competitiveness. It is a foregone conclusion that the company did not apply objectivity in determining how to improve profitability. Profitability may not be achieved by looking at the Italian sausage market only, although this is an emerging market.

The focus group was selected from on women who were users of Italian Sausage, this failed to recognize male users of this type of sausage. There is an increasing amount of male only households and the target group could have been widened to include male head of households which would have produced a different market segment. A large segment of the population that had a taste for Italian sausage was probably not discovered.

Problem Statement Saxonville Sausage Company has been experiencing reduced profits in its major product

Saxonville Sausage Company

lines and wishes to launch its Italian sausage brand Vivio to increase profit. Based on the problem statement, Saxonville Sausage company needs implement strategies that would stem the loss of revenue due to dismal sales. They also need to identify and implement the right strategies that would launch their brand of Italian sausage that would revive profitability.

Development of Alternatives Saxonville Sausage Company should consider the following alternatives:
1. Conduct market research that would give a clear indication of who the main competitors are

and how the Vivio brand of sausage is positioned against the competitors
2. Develop competitive advantage strategies so that Vivio sausage will be superior to that of

the competitors that will impact on profitability.

3. Employ strategies that would reposition the breakfast sausage line.

4. Employ market development strategies to increase market share of breakfast sausage line.

Evaluation of alternatives and recommendation Conducting market research to know the competitor would be very important to Saxonville. Market research can be described as the systematic collection and analysis of data about the important characteristics of the market, such as consumer behavior and competition, this information is beneficial to the company. It will allow Saxonville to study the relationship between the company and the consumer. The data collected is ideal to determine the company's progress after the product launch, and also to target particular segments of the society before the Vivio Italian sausage launch. A good market research allows the company to determine whether it has been able to satisfy

Saxonville Sausage Company

its customers or not. It provides the company with crucial information about the various factors which affect the business. It helps the company to formulate plans, take necessary measures and evaluate its performance. Competitive advantage is having the edge over the competition, Saxonville must be able to sustain their competitive advantage, and protect it from imitation. If your competitors can easily copy the product difference and immediately implement it will not an advantage. The customers must see a consistent difference between Vivio Italian sausage and those of the competitors. This difference needs to be obvious to the customers and it must influence their purchasing decision. The competitive advantage must be difficult to imitate, The product must have a benefit that the competition cannot be duplicated easily or they do not understand how to replicate.

Most companies have a product that has reached the mature stage of the product life cycle. They were successful products that have been a source of profitability and they are signs of declining sales. They are products that need a boost at this point in their product life-cycle, the market becomes saturated, sales level off, and price wars begin. At this stage new ways need to be found reenergize the product. In other words, the product needs to be repositioned in this mature product so it has a second life in the growth stage. This concept referred to as "scalloping the curve." Saxonvilles breakfast sausage line has reached the mature product stage and repositioning of the brand should be considered in order to save it. Saxonvilles breakfast sausage line can grow by pushing the product knowledge to reach new customers, implementing market development strategies. Potential new markets must be identifies as opportunities. New markets can be achieved by expanding geographically to markets such the

Saxonville Sausage Company

Caribbean. Growth can be achieved by appealing to a new or additional market segments. This area is such a popular growth strategy, examples of this strategy abound, such as Bayer aspirin now being sold not just for aches and pains, but also for heart attack prevention if taken daily.

Conclusion The Saxonville Sausage Company must implement marketing strategies that will reposition its Italian sausage product to take advantage of the rapid growth in this product category. These strategies must also be applied to its breakfast sausage lines in order to save the products.

Saxonville Sausage Company

Reference Winer, R.S & Dhar, R.(2011) Marketing Management. 4th ed. New Jersey: Prentice Hall.
Naik, Abhijit. Why is market research important. Retrieved October, 2011 http://www.buzzle.com/articles/why-is-market-research-important.html

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