Saxonville Sausage Company | Marketing Management II |

Executive Summary Saxonville Sausage Company located in Saxonville, Ohio has been a family owned business for 70 years. They strive on their quality and ability to produce always fresh never frozen bratwurst, breakfast sausage and patties as well as their recently launched Vivio Italian brand of sausage. The Vivio brand never received the attention that it required however now with the Italian sausage market growing annually at a rapid pace they have hired Ann Banks to create a marketing plan and launch the Italian sausage product properly. Ann decided to keep the name Vivio Italian Sausage but add that it was from Saxonville because everyone knew their reputation of quality, healthfulness and freshness in their pork product. In addition to the name of the brand Ann added “ A family tradition for 70 years” to the label giving the product an emotional feel for the potential consumer. The target market that was chosen was the “Home Maker Mom” due to the research provided by the Director of Market research Laura Bishops. The Home Maker Mom was 93% of user and the family member most frequently preparing dinner. Furthermore because of the family background and Italian symbolising family Ann decided it was best to promote the “Family Connection” as oppose to “Creative Cooking.” Ann will price the product a little higher than their competitors to remain complementary to the high quality they offered. The product will be launched nationally penetrating 100% of the supermarkets as it has only penetrated 16% so far. Promotions will be done through magazines, website, and packaging as well as television commercials. With the increase in price, national launch as well as attention to detail in advertisements the new and improved Vivio Italian Sausage from Saxonville will meet their financial goals for the next fiscal year.

Table of Contents

Nature of the Business 3 Objectives 3 Problem Statement 4 Situation Analysis 4 Internal 4 External 5 Market Overview 5 Financial Analysis 5 Consumer Analysis 6 Customer Analysis 7 Competitive Analysis 7 Alternative Analysis 7 Recommendation 8 Marketing Strategy 9 Product 9 Price 10 Promotion 10 Place 12 Exhibit 1 - Product Life Cycle 13 Exhibit 2 – Complete SWOT Analysis 14 Exhibit 3 – Projected Distribution and Growth 15 Exhibit 4 – Segmentation Chart 16 Exhibit 5 – Positioning Chart 17 Exhibit 6 – Promotional Costs 17

Nature of the Business

Saxonville Sausage Company is an established privately owned family business with their headquarters located in Saxonville Ohio. Their company produced different varieties and options of pork sausage available to be served at both breakfast and dinner time. Saxonville has been in business for 70 years and in 2005 generated revenue of approximately $1.5 billion. Ann Banks was new at the Saxonville Company and took on the position of marketing director. As marketing director it was up to Banks to re-launch their Italian sausage brand. The launch of the national Italian sausage brand was crucial in order to achieve its profit objectives for the next fiscal year.
The core product and benefit sought from Saxonville sausage is that it was the “Ideal” meal. Individuals experience time poverty now and this ideal meal can be kept on hand to make wholesome and appealing meals that the entire family would love to eat. Whether it be a special occasion breakfast with sausage or patties or a quick supper solution using bratwurst or Italian sausage; they all can be whipped up at any time. The actual product is sausage itself. Saxonville offered bratwurst sausage, breakfast sausage; links and patties as well as their Italian sausage currently named Vivio. Finally the augmented relation to these products is the quality of the product being offered. Saxonville offers pork sausage that is predominately fresh sausage as opposed to smoked or semi-dried.
Objectives

Saxonvilles main objective is to launch their new Italia Sausage brand and meet their financial goals for the next fiscal year. With the Italian sausage rates increasing annually from 9% in 2004 and 15% in 2005 it was the one showing the most increase in growth within the retail sausage market. Ann Banks is required to put together a market plan for the launching of a national Italian sausage brand for Saxonville in order to meet these financial goals. Ann Banks must keep in mind the quality and standards of their product they wish to up hold.
Problem Statement

Ann Banks must put together a marketing plan to launch Saxonvilles Italian sausage, however, she needs determine the brand name; stay with “Vivio” or something new? She also needs to determine the brand positioning; “family connection” or “cleaver cooking”? As well as how the product will be promoted while keeping the company and products know quality and heritage and meeting their financial goals for 2006.
Situation Analysis
Internal

Saxonville is a mature company however the new Italian product line Ann Banks is marketing to launch is within the growth stage. See Exhibit 1 for the product life cycle table.
The established company strives on making a high quality product; they have a strong recognition with their consumers. Currently to market their Vivio brand of Italian sausage it has been put on sale every other month and has been offered as an in-store sampler. The Vivio brand was born from this form of promotion however it depletes their attempt to ensure quality. At a comparable price to its competitors it has no other differentiation. Ann must increase the awareness of the quality Saxonville offers and not fall into the weakness of offering in-store-samplers.
A main weakness that Ann must overcome is that the Saxonville Sausage Company is of German heritage and is attempting to launch an Italian sausage product. On a positive note the product is great and now that consumer is aware of Saxonville as a company Ann can increase is differentiation, identity as well as position the Italian product to maximize its potential and success. By strengthening and perfecting the promotion of the product from its original launch we will be able to achieve the key success factor; matching up the core values in the “hearts and minds” of the consumers so that they feel like the brand was designed specifically to meet their needs. For the complete SWOT Analysis, see Exhibit 2.

External

Ann Banks must also analyze her opportunities and threats. The company has been selling their product to national and regional brokers and distributor however has only penetrated 16% of the Northeastern Markets. This makes for a great opportunity to further distribute their product into the rest of the Northeaster markets specifically within the franchised and branched locations they are already selling Vivio in within the large supermarkets. Another opportunity is put together the marketing plan for their Italian sausage product as there had not been a great deal of promotion with the first launch of the products. Due to Italian sausage rates increasing annually they need to get out there and start promoting.
There are also a few threats the first being that within the research provided the peak season for purchasing a sausage product is only 5 months out of the year. Secondly there is 29 other local and regional brand competitions whom are already established. However, Saxonville focuses on the freshness of their product. With a lot of the other brands focusing on frozen this is a great attribute for differentiation. For the complete SWOT Analysis, see Exhibit 2.
Market Overview

The Saxonville Sausage Company operates within the broad market of food distribution it would then funnel into the category of meat distribution and specifically red meat (pork) and then sausages being extremely specific. Ann Banks has had help from Laura Bishops Director of market research to help understand what market segmentation is best to approach the appropriate target market. It was identified that a demographic segmentation would be the best approach. See Exhibit 3 for compete market segmentation chart.
Financial Analysis

Currently in 2005 the company has revenues of approximately 1.5 billion, and 5% of those sales are from Vivio Italian Sausage which results for around $75,000,000 of the company’s revenues. There has been an increase annually from 2004 of 9% and 2005 of 15% to be conservative but still show an increase the projected growth for 2006 will be 12%. This is show in Exhibit 3.
Consumer Analysis

To better understand which consumer Omega Paw to target, the following segments will be considered: Home Maker Mom, BBQ Dad and Suck-up Kid. See Exhibit 4 for complete market segmentation chart.
The “Home Maker Mom” is 93% of users and is looking for something fast, tasty, healthful and to serve their family. The demographic segmentation is the best approach due to the finding that woman being the head of most households cook dinner for their families at the end of each day. The Home Maker Mom believes that Italian sausage “had the same effect as popcorn at the movie theater” which is appealing for picky eaters. Italian sausage was a quick meal and could be served with little or no creativity – “the minute you smell it you have to have some.” Mothers held themselves with high standards and strived for the complement of a “Job well done.” They get great satisfaction from their families faces after a successful dinner, and dread a “dinner disaster.” The Home Maker mom uses her creativity to come up with interesting meals and there are multiple things you can do with Italian sausage.
The “BBQ dad” are consumers take up 7% of the usage and are the ones who love to use the barbecue . They are the segment that uses the barbecue the most and take advantage of this style of cooking on weekends, when the head of the house hold is not around or needs a break. Bratwurst is a grilling staple for weekend barbecues. However; these Saxonville loyalists “may be a part of the weekend-barbecue ‘Brat Pack’ but their use of Italian sausage has nothing to do with what happens on the weekends.”
The “Suck-up Kids” are consumers with in a grey area they take up the remaining consumers within the market segmentation. They consume the products when Home Maker Moms or BBQ dads prepare the product for them or when they are asked to assist in the preparation of dinner. The Suck-up Kids also occasionally prepare their own meals – only when necessary! They will resort to whatever is in the refrigerator.
Customer Analysis

Currently the Saxonville Sausage Company is distributing all of their products throughout the United States to both national and regional brokers and distributors. Specifically their Italial brand Vivio is being distributed to only 16% of the nation’s largest supermarkets. It has a great opportunity to expand in other places other than its current locations of Boston, New Jersey, New York, Maryland and South Carolina.
Competitive Analysis

Currently the competitors of Saxonville Sausage Company are other distribution companies however their main focus is the distribution of frozen products.
Their regional competitors brand s are of Italian heritage; * Mama Mia in New York – they emphasize on their “authentic Italian heritage” which is also Saxonvilles implied angle for promoting Vivio * Hertfordshite in Pennsylvania – they emphasized on “freshly and locally made” * Paglia Brothers in Boston – they emphasize on both withr Italian name but implement the “locally grown angle”
There is also potential future competitors, if Saxonville decides to differentiate themselves with fresh sausage and not available frozen then some of the current nationwide competitors may try to compete with that and introduce their own fresh products to the sausage market.
Alternative Analysis

The Italian Market is increasing annually and with Saxonville’s strength in national distribution it is without a doubt their time to launch their version to increase profits. There are two top concepts for marketing the “Italian opportunity”; the family connection and cleaver cooking.

Family Connection
Pros:
* Italian has the meaning of family behind it * Still implies the quality the company strives to up hold in their product * Consistent with Saxonvilles backgrounds of being a “Privately held family business” * Brings in an emotional connection with family and friends enjoying a good meal and good company * The Italian sausage is a crowd-pleaser * Family members are looking for healthful options that are fresh * Something that easily draws people to the table with the aroma while its being cooked
Cons
* Already implied by other companies and competitors * Not an extreme point of differentiation

Cleaver Cooking
Pros:
* Adds creativity to family or individuals meals * Intensifies the message of quality the company is striving to up hold * Uses sausage as an ingredient to a larger production of a creative meal
Cons:
* There is a loss on the original “easy and fast” attribute desired by the consumer
Recommendation

It is recommended that Saxonville Sausage Company target the Home Maker Mom segment as female’s ages 20-50 are the most frequent purchasers of Italian sausage products. Positioning the brand towards “The Family Connection” will match up the core values with the Home Maker Mom. The brand will be positioned specifically to meet the needs of this segment, providing easy and ideal meals that they can whip up for their entire family. With every simple creative meal these moms make, it will bring joy, togetherness and happy faces to the table as well as uplift the worry of “dinner disasters.” In addition to the recommended course of action, it is suggested that Vivio continue to be the product name of the Italian Sausage from Saxonville Company. It is already linked to the company and even though it ranked 7th place from the respondents in the research group it has not been given the proper promotion to get its name out there. It is still known as a product of Saxonville and any product produced and distributed from Saxonville is of high quality, “fresh-never frozen” and is locally made. They are also known as “The Family Company”, with this in the mind of the consumers Vivio shouldn’t have any problems establishing themselves amongst their competitors with a slightly high price, proper promotion and placement.
Marketing Strategy
Product

Vivio Italian Sausage
Due to the fact that the product has already been launched and the name Vivio is somewhat known by the consumer it is not in the best interest of the company to re-launch under a new name. What the company can do is give it a refreshed look and better market the product, which will be talked about in promotion. Saxonville Sausage Company has a really good reputation and indicating that “Vivio Italian sausage” is from Saxonville will continue to up hold the high quality and continue to follow “Family” tradition.
Packaging
To properly target the “Family Connection” the Vivio it is recommended to offer the sausage in different quantities. Not every family consists of only three or four people, and if they do some family food intake is more than others. On average a pack of sausages comes in six; however Vivio will come in packs of eight and twelve “Family Packs.”
The packaging will continue to use a styrofoam tray covered with plastic wrap. There will be a large enough window for consumers to view the fresh ingredients and herbs that are highly visible through the casing of the Italian sausage. The label will cover a portion of the product inside indicating the brand name “Vivio Italian Sausage” as well as an indicate “from Saxonville” and the addition of a slogan “A Family Tradition for 70 years” all involving the Italian colours of red, white and green. The name and slogan on the packaging will remain constant throughout the production of the packaging however; there will be twelve different lots produced.
Each of the twelve lots will comprise of quick tips as well as a simple recipe that Home Maker Moms can implement to keep things tasty and interesting for the whole family to enjoy. The idea of having the recipe directly on the packaging is to decrease time for the consumer. The majority of consumer experience time poverty and can easily pick up the additional needed ingredients while doing their shopping without adding an additional trip back to the store later.
Price

While re-launching the Vivio brand the price must reflect the quality the company projects. Unlike the original launch we do not want to discount the product, positioning ourselves at a lower quality then we claim to be. The increase in price will be small to keep ourselves just above our competitors however will complement our high quality, fresh-not frozen background. See Exhibit 5 for positioning. The product will indicate that it is from Saxonville and we do not want to under sell our brand name and image. On average family companies selling fresh pork sausage have priced a four pack of links/12oz at $8.50/pack. The normal amount of sausages sold in a styrofoam sealed pack that is in the distribution business is six links/pack. Based on this information Vivio Italian sausage will be sold in packs of six and eight as well as a “family pack” of twelve. The different package options will be priced at $12.75, $17.00 and $25.50.
Promotion

Due to the high quality background of Saxonville, it is recommended that they say away from the discount promotion or similar promotions such as BOGO’s (buy one get one) and product sampling. It is in their best interest to keep their promotions competitive such as create a website, family cooking classes, magazine ads and television commercials. See Exhibit 6 for the total budget of the below advertisements.
Targeting the Family Connection to the selected segment of “Home Maker Mom” is best done through Magazine ads and website to start. Due to time poverty mothers will put together a list of what they need to pick up at the grocery store before they leave the house. Marketing to the “Home Maker Mom” through Magazine ads as well as a website will allow them to add Vivio Italian Sausage on their list before they even put it in their grocery cart. They can reference easily back to the magazine sitting on their sofa or type in the web address if they’ve miss-place their magazine. Furthermore everyone lives extremely busy and hectic life styles having the ingredients/recipe on the packaging itself will also be helpful if because if you’ve managed to miss-place the magazine then you definitely will miss-place your list for your family dinner that night. Vivio Italian Sausage from Saxonville will make it easy for each busy mother to make the best tasting family dinner by having the needed ingredients available where ever they may go. This strategy is meant to inform and remind the consumer.
The Magazine Ad – This is something that moms love to look at during down time at home. They are found at the grocery stores within eye level while you are going through the cash as well as at beauty boutiques and drug stores. Within the magazine there will be ads promoting Vivio Italian Sausage from Saxonville with visual of a family sitting around their dinner table enjoying different styles of dishes you can create with the product. On the back of the ad (next page) there will be a recipe to one of the dishes previewed in the picture of the ad. These recipes will be the same twelve different recipes as the ones that will be printed on the lots of packaging for the product. The type of magazine will be a family dinning magazine and the ads will run once a month as an annual subscription and every month there will be a new recipe of the twelve available. The cost of running the ads is projected to be a total of $50,000.00. If this succeeds then the ad can then be expanded to multiple magazines.
The Packaging - In accordance to the magazine ad the packaging of the product is also promotional as it will have the twelve different recipes available. To product the twelve different lots of the stickers with consistent logo and alternating recipes is projected to cost $1,000,000.00/year.
The Website - A website will be created for all Saxonville products however focusing on the Vivio Italian Sausage section there will be similar advertisements in regards to the available recipes for moms to make to gain their families appreciation , smiles and “job well done” though their cooking. The launch of a website will cost approximately $20,000.00 and maintenance is projected to cost $1000.00/month.
As a long term goal a great way to catch the attention of the entire family is with a television advertisement. The point of the commercial will to gain an emotional attachment to the product.
The television commercial – the commercial will demonstrate family members spending time together laughing and take time to catch up on life. It will discuss the history and heritage of Saxonville as a family company “passing one a tradition from their family to yours for 70 years.” It will implement that the product makes families happy and will show that all members enjoy it; children and adults. The commercial is run every other day multiple times a day on a two week cycle during the peak months of October- February and then every day multiple times on a one week cycle to promote their product on the off season. The projected cost of the commercials will be $200,000.00/ year.
Place

Currently Saxonville has been distributing the product into 16% of national supermarkets. There is still 84% of national supermarkets to penetrate to reach full distribution. In the upcoming year Vivio Italian Sausage will meet the goal of the company to increase revenue by increasing the distribution from 16% to 100% using a nationally launch. With the national launch the Saxonville Sausage Company can successfully meet their financial goals for Vivio Italian Sausage in the year of 2006. See Exhibit 4 100% penetration and 12% growth predicted.
With the Vivio Italian Sausage from Saxonville available in 100% of the nation’s supermarkets it is crucial to have it positioned the facing. This is the first stack or row in the supermarkets shelf or refrigerator case. The products should be placed at eye level so that the consumer can see the product and what is shown through the plastic of the packaging, fresh sausage full of herbs and spices. The product should never be placed in the freezer to up hold its quality and freshness.

Exhibit 1 - Product Life Cycle

Saxonville Italian Sausage
Saxonville Italian Sausage

Exhibit 2 – Complete SWOT Analysis

Strengths | * Product is sold throughout the United States both national and regional brokers and distributors * Saxonville focuses on fresh and their main competitors are locally based and focus on frozen products * They offer a high quality product and have strong brand recognition * Their product is versatile and appeals to all family members; adults and children * They can be made for special occasion breakfast * They can be made for a supper | Weaknesses | * Saxonville is a German Company attempting to penetrate the market with an Italian sausage option * As a result the Italian heritage will be difficult to uphold * There is a lack of positioning with their Vivio product * Attempting to up hold a high quality product but they have been discounting their Vivio brand and giving out test samples in order to launch the product | Opportunities | * With the Italian sausage rates increasing annually from 9% in 2004 and 15% in 2005 it was the one showing the most increase in growth within the retail sausage market * Vivio was available in just 16% of the nation’s large supermarkets * Have had very little distribution throughout Northeastern markets * There is not direct competition for fresh sausage on a national level * There hasn’t been a great deal of marketing and promotion for Vivio | Threats | * Peak season is from October – February ( Only 5 months of the year) * 29 local /regional brand competitors who are already established |

Exhibit 3 – Projected Distribution and Growth | 2005 | 2006 | | 16% Distribution | 100% Distribution | 12% Growth | Vivio Italian Sweet Sausage Link 24.1oz | $3,714,499 | $23,215,618.75 | $26,001,493 | Vivio Italian Hot Sausage Link 24.1oz | $18,858,587 | $117,866,168.8 | $132,010,109 | Vivio Italian Mild Sausage Link 24.1oz | $42,414,884 | $265,093,025 | $296,904,188 | Vivio Italian Mild Sausage Link 55oz | $2,829,047 | $17,681,543.75 | $19,803,329 | | | | Vivio Italian Sweet Sausage Groud 14oz | $2,019,310 | $12,620,687.5 | $14,135,170 | Vivio Italian Hot Sausage Ground 14oz | $34,685 | $216,781.25 | $242,795 | Vivio Italian Sweet Sausage Ground 14oz | $1,351,313 | $8,445,706.25 | $9,459,191 | | | | Vivio Italian Cheese Sausage Link 14.7oz | $870,081 | $5,438,006.25 | $6,090,567 | Vivio Italian Pepper Sausage Link | $160,232 | $1,001,450 | $1,121,624 | Vivio Italian Garlic Sausage Link | $833,067 | $5,206,668.75 | $5,831,469 | Vivio Italian Mix Sausage Link | $1,235,193 | $7,719,956.25 | $8,646,351 | | | | Total | $ 74,320,898 | $464,505,612.6 | $511,732,286 |
*2005 - (5% of Total Revenue with 16% distribution of national stores)
*2006 - Projection Explanation for the year of 2006; * Increase of average annual growth rate (15%+9%/2=12%) with 100% distribution of national stores

* Increasing the distribution from 16% to 100% full capacity is 6.25 times the volume they are currently distributing. Note: 100/16 = 6.25

* Ex. First Calculation – 3,714,499*6.25=23,215,618.75 23,215,618.75*0.12=26,001,493
Exhibit 4 – Segmentation Chart Segments | Home Maker Mom | BBQ Dad | Suck-up Kid | Qualifying Dimensions | Who | 93% - Ages 20-50 All mothers who are the primary cooks for their families dinner time preparation | 7% - Ages 20-50All fathers who are the secondary to the primary cooks for their families dinner time preparation | 0.01% - Ages 0-19 Children attempting a dinner preparation to impress and/or help out mom and dad in preparation | What | This consumer is looking for a fresh, healthful ideal meal that the entire family adults and children will enjoy and complement her for | This consumer is looking for something fast and easy to barbecue for the family when moms not around | This consumer is looking for something fast and tasty – healthy or not | When | One a week to twice a week –Italian sausage is a “meal solution” | Once every six weeks or occasionally when mom is out of town | -When family dinner isn’t occurring that evening -Mom and Dad are out of the house -When asked to help out in the kitchen | Where | Grocery stores and supermarkets | Grocery stores, supermarkets, small family owned specialty meat stores | In the fridge, what every mom and dad has taken out for them to make | Why | Females are the primary purchasers and preparers Mothers are the primary provider of dinner within the household | Loyalists, it is a go to when dinner needs to be prepared by dad. It is easy to have on hand and is something that cooks well on the barbecue | Because mom and dad said so… | How | Promotions, word of mouth and online research for creative ways to spice up dinner time | May grab what every promotional barbecue sauces is near to spice up the grilling experience | Usually not concerned with looking up different ideas for cooking something specific or creative | Segment Size | Largest | Medium | Small | Trends | Tasty nutritious meal to satisfy every family member needs | Grilling staple for weekend barbecues | Only when asked otherwise never | Determining Dimensions | Benefit Sought | Quality, fresh and healthful for the family | Fast and easy | Fast and tasty | Usage Rate | At any time of the day or multiple times a week | Weekend barbecue’s or when moms not home | On no occasion – randomly | Adoption Curve | Early Adopters/Early Majority | Late Majority | Laggards |
Appendix 4

Exhibit 5 – Positioning Chart
Mama Miaa

Mama Miaa

Paglia Brothers

Paglia Brothers

Hertfordshire

Hertfordshire

Vivio Italian Sausage

Vivio Italian Sausage

Fresh
Fresh
Frozen
Frozen

Exhibit 6 – Promotional Costs Promotional Projected Costs/Budget | Magazine Ads $ 50,000 | Stickers for Packaging $1,000,000 | Website $ 32,000 | Television Commercial $ 200,000 | Total $1,282,000 |