NESTLE PURINA PETCARE |
Purian was founded in 1894 as Purina Mills, merged with Nestle in 2001, named Nestle Purina Petcare. It produces pet foods, treats and litter includes more than 40 brands sold in 100 countries. Nestle Purina is the leader comapany in pet food sales, volume and market share in the The United States as of 2012 worth 12 Billion USD. Product and Service - Customer Description and Product Distribution |
Nestle Purina Pet care occupies the top spot in pet food industry with 28% of market share in US, provides value to consumers by providing high-quality; nutritious pet products that can help enrich their pets’ lives. It also provides insurance for pets under its Purinacare insurance. Its core philosophies include promoting responsible pet care, humane education, community involvement, and the positive bond between people and their pets(2015a). An extensive strong portfolio of brands provides the company with a competitive advantage, and results in steady revenues and profit.
In 2015, 85.8 million Cats and 77.8 million Dogs lived in household in the United States as pets(2015c). Purina’s Primary target customers are men and women between 25-54, work in office occupation with average-high income to spend on premium products for their pets, secondary target is men and women 18-49 with other forms of employment who spend average money for their pets and tertiary target is above 50 who are on retirement and empty nesters who own pets as companion and have disposable income to spend, and average TV watchers. This poster covers the analysis of Purina PetCare USA following with market dynamics, marketing strategies and competitors of the company and appropriate recommendations to grow profit and values to brand ahead of market competitors. Market Competitors | Direct Competitors Capabilities | Mars Pet Care | -Pedigree, Whiskas - Worldwide market over 50 countries-¼ of total industry revenue-Quality control, supply chain, reliable resources-High skill Nutritionists-Dog DNA sequencing technology-WALTHAM centre-Pet care programs and donations to shelters | P&G | -Deep financial resources-Strong brand equity | Dell Monte foods | -Stronger capital structure, substantial cash flow-Acquired strong brands in Milk Bone and Meow Mix (Aaker and McLounghlin, 2010)-Distribution centres and warehouse efficiencies, plant efficiencies and process -Improvements, enhanced purchasing power and selling efficiencies. | Colgate-Palmolive | -Leading brands- Science diet, ideal balance, prescription diet-Expansion over 95 counties-Spent millions on research and development-Strong network with veterinarian community | Potential Competitors- Natural based Companies | Nature’s variety | - Specialized in natural food Empower people to transform the lives of pets-100% natural healthier pet foods-Unique product line creating competitive advantage-Innovative technology to assure safety | Blue Buffalo | -Natural cat/dog food products-Pet cancer research foundation -Raising awareness and information | Market Investigation- Secondary Market Research | Nestle Purina website US,CA | Annual reports, Newsletters, Press reports | Pet food industry Databases | Industry analysis- US, CA, UK, Australia, Germany, | Market Related | Books- Marketing management, Global perspectives | Internet | UniSA Database, Journals, Blogs, Web-pages, News, UK essays, Slide share, Publications | Government | Agr.gc.ca, APPA.US |

SWOT Analysis of Nestle Purina Pet care | Strengths | Weakness | -Strong Portfolio of Brands-Includes more than 40 brands * -Strong Support of Parental Company-Nestle * -Leadership position based on “ Trust ” and “ Quality ” * -Contribution to improving the environment and facilitate consumer’s participation- Not yet done by other competitors. * -Creating Shared value- bringing pets and people together- largest pet adoption website “Petfinder.com”- 20million pets been adopted since the day. * -Commitments to environmental sustainability, education, innovation, communities. | * -Factories concentrated only in America * * -Too much focus on developed market * * -Several pet food recalls * * -Limited distribution channels * * -Higher ingredient and production cost * * -Weak presence in specialty segment | Opportunities | Threats | * -Increased pet ownership in emerging markets-ownership among low-income households-18% gain 2009-2013(Phillips-Donaldson, 2014). * -Increasing Hispanic population in US who are more likely to own pets than other communities * -Increasing numbers of empty nesters * -Global awareness of pet health and wellness-natural and organic pet food demands * -Rising disposable income globally * -Growing amount of skilled young professionals around the world. Figure 1: consecutive sales growth | * -Product safety and quality concerns * -Rising price of commodities * -Rising labour wages in US * -Growing number of foreign and domestic competitors * -Emergence of cheaper private label products -Home products to gain profit margin. * -Cultural barrier in foreign countries * -Growing Competition and low profitabilityFigure [ 2 ] Competition |

PESTLE Analysis of Nestle Purina Pet Care | Political factors | Economic | * Production and distribution is subjected to FDA, USDA, FTC and local laws and regulations. * Fair packaging and labelling act. * Drug and cosmetic Act requires that pet foods must be pure and wholesome food as human food * Tighter state regulations varying geographically * Registration and label reviewing of each product in each state (Hillestad, 2015) * FSMA standard to meet- processing and packaging equipments must meet the safety requirements.(Feldman, 2013) | Challenging economic times in U.S. led pet owners to become more value-conscious. * Large increase in production cost also affected consumers in 2008 * Premium pet food products remain popular despite the recession, as pets are treated as surrogate children by their owners | Social | Technology | Increase number of one person household results in * pet ownership among people to find companion increased number of older people owning pets pets are considered valued member of family Rise of humanization promotes sales of pet food, treats and other productsEmotional attachment with pets make owners to care for their pets and turn them to buy healthy and premium food products(Aaker and McLounghlin, 2010) | Nestlé’s investment in an online content property, is a major step Sophasticated tracking systemcompany’s efforts to better serve and enhance the lives of consumers through digital technology and contentPurina PetCare is already actively involved in supporting pet welfare organisations and the site offers a new opportunity to engage with a growing group of pet lovers from the US, Canada and Mexico.Digital platform has faciliate 22 million pet adoption(McGinnis, 2014) | Legal | Environment | Purina PetCare is facing a class action lawsuit over allegations one its product killed thousands of dogsPurina filed a lawsuit against Blue Buffalo for false advertising after testing revealed the presence of poultry by-product meal in some of Blue Buffalo's top selling pet foods.(2014) | Sustainabilty approach – efforts encompass the full life-cycle of productsInvolvement in responsible seafood and soy sourcing partners with marine, Proforest NGOSignificant progress in reducing water,energy and waste repsectively 7.2%,23%,11% from 2004-2012Solar arrays at five locations |

Porter’s Five Forces within Industry-Purina | Threat of new entrants – Moderate | Threat of substitutes- Moderate | * The market is saturated, makes the threat of new entrant bit high but it depends on the size of manufacturer * Large companies like Purina are not greatly affected * New entrants need big capital to invest in market and creating brand value * Strong distribution network required | * There are few substitutes exist e.g. raw meat, veggies, home cooked food * Low quality of substitute * Humanization of pets- pet owners treat their pets as family members, they are much concerned about their health and wellness * Buying natural/organic, nutritious food for pets * Chose to purchase ready-made food from stores | Bargaining power of buyers- low | Bargaining power of suppliers-Moderate to high | * Buyer’s power is low because of buyer’s sensitivity to price and knowledge. * The saturated market also provides buyers more options available to their needs - e.g. budget, ingredients, brands * Purina’s focus on health and wellness proves customer loyalty in performance. * Emotional connection with pets * Willingness to spend more money * Boost demand for pet food | Price of inputs used by purina increased over years Rise in labor cost, crude oil prices Requirements for ISO Standarads ingrideants for nutrition rich productsWater and resource scarcity can lead higher price for inputs (Tylenda, 2014)Customers’ demand for premium products for consumers that can give power to suppliers to higher their price. e.g. euipments, machinary(Feldman, 2013) | Rivalry within Industry-High | Healthy competition is good for organisation for growth and suceess even for customers ; they always get improved quality products Increasing industry growth rate Industries with high competitive pressure will impose pressure on prices, sales margins, and even on profitability for the Single unit in the industry.Purina has a very strong position in the pet food industry but few strong competitors do exist serving the similar products and pricesCompetiotn is violent in the industry; rivals are spending more and more in advertising and promotions |

Marketing Mix – The Four P’s | Placement | Promotions | Products | Price | -Supermarkets –Wall marts, Target-Hypermarkets-Pet stores-Grocery stores-Vet shops-Online stores -Drug stores | -Digital Media -TV -Sponsored Websites -Ads campaigns-Mobile apps -Dog shows & Competitions -Charitable activities -Magazine advertisements | -Wet/dry dog foods-Wet/dry cat foods-Litter, toys-Dietary supplements-Bird food-Fish food | -Varied prices-Range of products for budget shoppers and premium shoppers-Discounted prices on newly launched products |

Recommendation | Nutritional sustainability in pet food products- In order to reduce the impact of market driven by customer’ demand rather than nutrition requirements of consumers which ultimately resulted in food wastage, obesity in pets and health problems associated to pet owners such as allergies and asthma in children. | Specific | Measurable | -Consideration of metabolic necessity of pets-Dietary preference without compromising the ability of future generation to meet nutritional needs -Selection of ingredient, nutrition composition and processing -Reducing fecal waste by improvingdigestibility and bioavailability | -Measurements are continues on scale -Biological diversity, life-cycle assessment -Implications directly cut costs associated with live stock production-Decreased doctor’s visits and medical expense -Increase life expectancy of pets as much as 2 years | Attainable | Realistic | -Nutritionists, formulators, ingredient buys can influence sustainability through manufacturing process, product design and educating public-Integration of sustainability measurements in pet food formulation program could provide a tool to assess products based on ingredient selection and nutrient composition | -Involve education and awareness within industry, also among customers -Nutrition sustainability in products will decrease obesity rates in pets, increase health benefits - Also minimize the food wastage through overconsumption | Time-phased | -Pets are suddenly fed the proper amount, it would have immediate and significant impact on the health of pets and overall footprint associated with the Company(Buff et al., 2014) -Pet owner education programs, proper feeding guidelines influence pet owner behaviours in buying products for their pets | Product promotions to attract new emerging population building trust and loyalty of new customers- Hispanic population | Specific | Measurable | * -Highly targeted, personalized marketing * -Bilingual advertisements * -Big data and complex social tools * -Business intelligence to gain insights of new customers - Use of digital Media- Facebook,Twitter | -Increasing number of Hispanic population in US -Increasing purchasing power of target population- likely to own more pets in US than other white or black population | Attainable | Realistic | * -Campaigns targeting specific group, regeion * -Bilingual news forums, Facebook page will attract new customers for products and information with curiosity * -Product customisation to give cultural twist or renaming product, labeling, design | -Events and campaigns can be held in the high concentrated states with Hispanic population to launch/promote the products -In store promotion targeting geographic locations | Time-phased | -With high reputation in market Purina will earn trust and loyalty of new target customers within a time frame -Growth of promotion/products designed for specific group will be measured by annual sales report. |

References

2014. Purina: A Year to the Day after Being Sued, Blue Buffalo Finally Admits By-Product Meal in a "Substantial" and "Material" Portion of their Pet Food [Online]. PR Newswire. Available: http://www.prnewswire.com/news-releases/purina-a-year-to-the-day-after-being-sued-blue-buffalo-finally-admits-by-product-meal-in-a-substantial-and-material-portion-of-their-pet-food-300079805.html.
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