Saxonville Sausage

Company Case Study

CREATED BY PARAMPREET SINGHTHAPAR UNIVERSITY, PATIALA

Saxonville’s Background

• Saxonville was a 70-years old, family business and placed in Saxonville, Ohio.

• In 2005, the revenue approximately $ 1.5 billion.

• Produced a variety of pork sausage products: fresh sausage as opposed to smoked or semi-dried

Company Product

Product Market Revenues

Bratwurst Flat – No Growth

70%

Breakfast Sausage

Decline revenues

20%

Italian Sausage “Vivio”

Growth 5%

Store brand products

- 5%

The business consisted of branded products:

Revenue Percentage Contribution

70%

20%

5%5%

Revenue Percentage Contribution

BratwurstBreakfast sausageItalian sausage "Vivio"Store brand product

Market Product

• Bratwurst and Breakfast products sold throughout U.S via both national and regional brokers, distributors.

• The Italian sausage was the one category showing growth across producers in the retail sausage market, showing an annual rate of 9% in 2004 and 15% in 2005.

Market Product

• Very little distribution in store in the Northeastern markets.

• Saxonville’s Italian brand, Vivio although matched this level of category growth, it was available in only 16% of the nation’s large supermarkets primarily in Boston, New Jersey, New York, Maryland, and South Carolina.

Background of Saxonville's Italian Sausage Business

• Vivio entered the Italian sausage market in 2002.

• They made up an “Italian” name because they worried that people wouldn’t buy an Italian product from a ‘German heritage’ company.

Background of Saxonville's Italian Sausage Business

• Vivio was priced comparably to other regional Italian sausages.

• Current positioning of Vivio is “Vivio fresh Italian sausage” and has an Italian flag in one corner.

WHAT ARE THE

NO. 1:

1. Successful launch of a national Italian Sausage brand

– Take advantage of high annual

– growth rates (2004 – 9%, 2005 – 15%)

– Increase market share and – contribution to total revenues

ISSUE NO. 2:

2. Limit cannibalization of other market segments

(Brats and Breakfast Sausage)

ISSUE NO. 3:

3. Decrease problems associated with

distributing outside of core geography

ISSUE NO. 4:

4. What is the ideal name for Saxonville’s line of

Italian sausage?

Research the Italian

Opportunity

Researching and Evaluating The Italian Opportunity

• Ann Banks formed a multifunctional task force, “Project Score”, included 10 collegues from the R&D, packaging and graphics, marketing, and sales departments.

• Find the ideal name for Saxonville’s line of Italian sausage.

• Four Steps to do positioning work.

Step One :

Planning New Research on the Target Customer

• Phase I : To confirm some of the basic information presented in the Attitude and Usage data.

Relevant data from latest A&U study:

• Female heads-of-household are primary purchasers of Italian sausage.

• Six out of the last 10 purchases given to a particular brand is considered “a loyalist.”

• Heavy users used Italian sausage three + times a month.

Relevant data from latest A&U study:

• Mean Italian sausage usage constituted two times every six weeks.

• Heaviest usage is among consumers aged 20–50 years.

• Age differentiation tends to manifest in 10 year increments.

PHASE 2:

- To understand current behaviors

- Triggers to purchase, and unmet needs

- To get a clear understanding of product benefit

- Attributes and ideals

- To develope a solid feel for core value and role

Step Two :

Building on Learning from the Focus Groups

• Ann and Bishop learned much about consumers behaviors from the focus group and developed a synopsis of the learning and sent it to every member of Project Score.

6 potential bases for positioning :

- Family Connection

- Clever Cooking

- Confidence

- Appreciation

- Quick and Easy

- Tradition

Step Three :

Building Positioning Concepts

• “Family Connection” and “Clever Cooking” received the highest total votes.

• The result shows that 81% of respondents would definitely or probably buys the product with a positioning focused on “Family Connection” and 72% if the company would use the “Clever Cooking” concept.

CONTD.

• On the other hand 41% would definitely buys the product with “Clever Cooking” concept and just 23% with “Family Connection” 4% would definitely not buys in case of the “Family Connection” position model, and only 2% in the case of “Clever Cooking” concept

• The group embed their ideas to a manageable list of R&D, graphics and sales tactics.

Step Four :

Additional Research Delivers a Verdict – or Two

• “Family Connection” had scored better and receiving the most first-place votes.

• Discuss how advertising look and feel, packaging, product attribute, name, considering sub-branding.

• Picked the winner from the two final concepts.

Customer Analysis

Possible Segmenting Dimension

• Working out of the home, part or full time vs working at home as a homemaker

• Head of household: female vs male

• Age: <10, 10-20, 20-30, 30-40, 40-50, >50

• Household income level: low, middle, or high

• Consumer group: heavy, medium, or light users

• Loyalist vs competitive users

Target Market

• Working out of the home and working at home

• Head of household: female and male

• Age: 20-50

• Household income level: middle and high

• Consumer group: heavy, medium, and light users

• Loyalist and competitive users

Positioning

• Wholesome meals with fresh ingredients

• Desire to please entire family with single dish

• Quick meal preparation without sacrificing nutritional quality

• Family dinner facilitating feelings of togetherness

Positioning

1. Family Connection

–Discover a crowd-pleasing favorite that brings the family together

–Vivio - It welcomes you in

–The perfect blend of fresh herbs and spices, with irresistible aroma and taste will draw people together over a great and enjoyable meal

2. Clever CookingPositioning

• Simply add your own personal touch to create meals that make any day a little special

• Vivio – Creative meals in minutes!

• Comes with recipes everyone is sure to love, unleash you creativity to create a wholesome real meal in minutes

Current Market Considerations

1. Behavior Considerations

• Vivio loyalist

• Competitive brand

• Degree of price sensitivity

• Frequency of every day dinner preparation

• Use of other product within company

Current Market Considerations

2. Geographic Considerations

• Currently in strong Italian sausage markets

• Strong Bratwurst markets where Saxonville well developed

• Strong Saxonville markets where Italian sausage is distributed

• Strong Saxonville markets where vivio is distributed

Revenue Calculation

• Vivio was only available in just 16% of supermarkets, our target is to reach 100% supermarkets

Vivio 2005 sales performance (from exhibit 2)

$ Vol of 16% market $ Vol of 100% market

Vivio Italian Sweet Sausage Link 24.41 oz $ 3,714,499.00 $ 23,215,618.75

Vivio Italian Hot Sausage Link 24.41 oz $ 18,858,587.00 $ 117,866,168.75

Vivio Italian Mild Sausage Link 24.41 oz $ 42,414,884.00 $ 265,093,025.00

Vivio Italian Mild Sausage Link 55 oz $ 2,829,047.00 $ 17,681,543.75

Vivio Italian Sweet Sausage Ground 14 oz $ 2,019,310.00 $ 12,620,687.50

Vivio Italian Hot Sausage Ground 14 oz $ 34,685.00 $ 216,781.25

Vivio Italian Mild Sausage Ground 14 oz $ 1,351,313.00 $ 8,445,706.25

Vivio Italian Cheese Sausage Link 14.7 oz $ 870,081.00 $ 5,438,006.25

Vivio Italian Pepper Sausage Link 14.9 oz $ 160,232.00 $ 1,001,450.00

Vivio Italian Garlic Sausage Link 14.7 oz $ 833,067.00 $ 5,206,668.75

Vivio Italian Mix Sausage Link 55 oz $ 1,235,193.00 $ 7,719,956.25

Total $ 74,320,898.00 $ 464,505,612.50

SWOT Analysis

STRENGTHS

• National Distribution Network

• Strong brand recognition

WEAKNESS

• Potential confusion of Italian named sausage, Vivio, from German named company, Saxonville

• No Comprehensive advertising campaign

• Possible cannibalism of similar products with portfolio

OPPORTUNITIES

• No national competitors of fresh Italian sausage

• Category shows growth across all product within portfolio

THREATS

• 29 regional barns with large percentage of market share according to geographic region

• Frozen product is currently distribute nationwide by a number of other companies

CONCLUTION

WHAT POSITIONING ???

•Positioning as a “Clever Cooking” concept could gain more benefits instead of “Family Connection” since the tendency to buy is higher, that consumers is definitely would buy with “Clever Cooking”.

NAME ???

• Ann Banks should stick with Vivio name. While Vivio hasn’t been a huge success to sausage market, change their name won’t give a huge effect because many customer has aware with the Vivio name. By changing name, it will confuse or alienate the few loyal customers the brand actually has.

DISCLAIMER

THIS PRESENTATION IS CREATED BY PARAMPREET SINGH, TU, PATIALA DURING A MARKETING INTERNSHIP BY PROF. SAMEER

MATHUR, IIM LUCKNOW

( WWW.IIMINTERNSHIP.COM)