In reviewing the Zenith Pet Foods case, there are several facts that need to be assessed before offering

a definitive answer on whether their potential program for marketing Show Circuit dog food will be successful. Zenith Pet Foods, Inc. is a major distributor of dog food for show kennels throughout the United States. The product that Zenith is offering is called Show Circuit, which is a highly nutritious and quality ingredient dog food. The product of Show Circuit, frozen pet food designed to enhance the appearance of the dog's coat as well as providing a balanced meal, is planned to be placed in the frozen foods section of a supermarket. This is what Zenith is counting on to build a competitive advantage. The fact that Show Circuit will be directly located next to the "people food" gives it another edge on the other foods available to dogs on the market right now. In terms of the market and other competitive features, Show Circuit and Zenith have their work cut out for them. There is great potential to grow in this field, most pet owners want what is good for their pets, and this includes pet food that is healthy for their dog. The ability to capitalize on growth is strong, with 64% sales growth last year, while only .9% of total sales exist in the current market, Boston. There are about 50 dog food manufacturers and 350 dog food brands. Purina, Iams, Hill's Pet Nutrition, MasterFoods USA, and Del Monte Foods, Inc account for 75% of U.S. dog food sales in 2004. These are established pet food suppliers and already hold a majority of the market share available. Zenith is counting on the fact that their quality reputation in the show dog circuit and focusing on the benefits of buying dog food from the frozen food section will be able to differentiate the product in the minds of the consumer. It is clearly separated from other competitive products, so there is the capability of Zenith capitalizing on an untapped niche. These other suppliers are successful in the sale of dog food. They have each found a unique attribute in which to market to the consumer, so this could be a potential problem for Zenith and Show Circuit. The competitors also have sufficient experience in the dog food industry. The current market and competition is not the only concern for Zenith. The market they are planning to target and the product attributes are important for this decision. Zenith will primarily be targeting a growing market, with 64 percent growth in the past; this is a large segment, with 65 million dogs owned. The pet food is frozen and then prepared for the dog for consumption; it is comprised of 85 percent beef by-products and highest quality of cereal accounts for the remaining 15 percent. The pet food will be in a tub, which is different than many other dog foods on the market, but will only be offered in the frozen food section of the grocery store. It will primarily be targeted towards will be singles and marrieds between the ages of 21 and 54 with a household income greater than $25,000. In addition to market and product conditions, the promotion is important for the success of the product. In terms of promotion for this product, it will be integral to market this the correct way. It will be costly for the organization and needs to create not only awareness but interest in the product. As far as the media plan for Zenith, the general strategy focuses on collateral advertising, newspapers and magazines, and a focus on television advertising in particular. The promotion spending can either be $400,000 or $600,000 for the product. Competitors spend a considerable amount on advertising, so Zenith and Show Circuit will need to follow suit. On average, competitors are spending $7.0 million to $8.0 million annually for ongoing nationwide media promotion. There is a greater capability of competitors to outspend Zenith and present their products more heavily because they are established and successful in an already crowded market. Finally the price must be looked at before any decision can be made. By computing the various variable costs as well as the margins, the retail price would be $6.82 to wholesalers and $8.32 to retailers. It will cost $6.37 for variable costs and Zenith is expecting a $30,000 incremental cost for slotting in advertising. Compared to others in the industry the price will need to be around the average. It will technically be $8.32 per tub, which contains around 11 lbs of food. Zenith would need to sell at least 220,512 units if the advertising cost is $400,000 and 323,076 units if the advertising cost is $600,000.

After careful review of each of the elements in launching this product, the following analysis can be determined. Zenith has to answer a specific series of questions in order to decide if their product of Show Circuit dog food will be a viable product. The market was in fact correctly segmented, although Zenith needs to see the shopping behavior of those willing to spend more on pet food. Marketing in a supermarket could inhibit the potential growth of the product. Because the market is already segmented and offered such a variety of dog foods, Zenith will have to market the product correctly and focus in on the benefits to be successful. Show Circuit needs to seek a position of a higher quality product in a different, more convenient location. It is important to play up how the location is a benefit rather than a detriment. This goes along with the sales program being successful. Show Circuit needs to play up the benefits more than in the current plan in order to be successful in selling to a supermarket. It will still be difficult, at this point, to secure stocking in the supermarket on a grand scale. While Zenith can cover its costs by selling the product with a price of $8.32, there must be more focus on advertising to make the product overall more successful. There is potential for the product, but the higher advertising budget will allow the organization to more effectively market the product. PREMIUM PRICE Price charged by zenith pet foods is quite high whencompared to their competitors Organic dog food sales grow by 64% last year from whichonly 0.9% are willing to pay premium price Premium price is targeted to upper class people. Niche market TARGET MARKET: INCOME MARITAL STATUSAGE >$25000SINGLE AND MARRIED21-54 Media Plan: There are four objectives that should be fulfilled by the media plan: 1. Create awareness for the brand 2. Obtain distribution through supermarket outlets 3. Motivate trial through coupon redemption 4. Motivate trial through emotional impact of television Collateral advertising is critical for the promotion of the frozen dog food, as it is the sales packet will be the main reference for stockists of this product. This ties in with distribution, without which there will not be adequate shelf space to alert consumers to the new product. This will hopefully satisfy the second objective of the media strategy. Recommendations for newspaper advertising are to advertise with Dog Fancy magazine and avoid the newspapers. Newspapers will advertise to a very broad market, rather than the narrower market of dog lovers that buy the magazine, who are also more likely to treat their dog. A one-in-ten take-up on coupon promotions is quite low, especially given the fact that newspaper advertising is costly. This would be higher in a narrower target market,

such as the dog-magazine readers. We believe its a cost that can be eliminated as it may not be recouped. The coupons and magazine advertisements fulfill objective 3 of the media strategy. Television advertising could be vital to create brand awareness for this new product (objective 1 of media strategy). As the bulk of the media budget will be spent on TV media, it is important the right approach is chosen. The Late Show with David Letterman is a very popular show, and should help out immensely in creating brand awareness for the product, objective 1. The first idea for advertisements is to capitalize on pet owners love for their dogs, and we believe this is the most appropriate route to take, if we are to follow through with the sales packet of the frozen food not only being with the human food, but also strategically placed in fridges in the dog food aisle, where customers are used to going for their dog food. This will cater for the final objective of the media strategy. Program Budget (If the product is sold at $12.00 per case) Sales (1.2m*$12.00) $14,400,000 Less Fixed costs: Production costs (6.37*1.2m) $ 7,644,000 Advrtising and promotion $ 400,000 Less Variable costs Slotting fees $ 30,000 Comission for retailer (22%s.p.)$ 3,168,000 Total profit: $ 3,158,000 Food broker comission(7% s.p.)$ 1,008,000