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Saxonville Sausage Company

A case study of Saxonville Sausage Company.

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Saxonville Sausage Company

  1. 1. Saxonville Sausage Company Harvard Business School Case
  2. 2. • A 70-year old, privately held family business • Produces pork sausage products, predominantly fresh sausage • Generated $1.5 billion revenue in 2005 What is Saxonville Sausage Company?
  3. 3. • The new product marketing director at Saxonville Sausage Company Who is Ann Banks?
  4. 4. • Plan and launch a new Italian sausage brand in order to meet the profit objectives of Saxonville What is her job?
  5. 5. • Steve Sears- manager of Saxonville • Laura Bishop- director of market research at Saxonville • Team ‘Project Score’ comprising of colleagues from R&D, sales and marketing, and graphic and design departments Who will be helping her?
  6. 6. • Saxonville produces 3 branded products: 1. Bratwurst 2. Breakfast sausage 3. Italian sausage Vivio The Current Situation
  7. 7. • Revenue Generation: The Current Situation Bratwurst Breakfast sausage Vivio Store-brand
  8. 8. • Distribution is regional • Bratwurst and breakfast sausage had very little distribution in stores in the Northeastern markets The Current Situation
  9. 9. • Growth situation: The Current Situation BRATWURST • Flat sales • 0% volume increase BREAKFAST SAUSAGE • Underperformi ng • Double-digit revenue decline VIVIO • Matched level of nationwide category growth • 9% annually in 2004, 15% in 2005
  10. 10. BUT…. Vivio was available in just 16% of the nation’s large supermarkets The Current Situation
  11. 11. The Italian Opportunity
  12. 12. An Italian sausage product could be introduced by Saxonville to fire up its sales and reach the profit objectives
  13. 13. How Vivio made its mark? In 2002, in the Northeast, brats wasn’t very famous. An Italian product, thus, could have fit in. Vivio was then introduced . An Italian name was given to indulge the customers as Saxonville was German-seeming. Price was kept comparable to regional Italian sausages and required trade support was given.
  14. 14. 1. By indicating ‘authentic Italian heritage’ (the case of Vivio) 2. By emphasizing ‘freshly and locally made’ products How was a brand positioned?
  15. 15. • How to position the new brand? • Extend Saxonville’s line or introduce a new brand? • What core values do the customers seek? • Which potential territory to target? • What should be the product attributes? The Questions!
  16. 16. To understand a rising product opportunity and introduce a new brand to generate profits • Market research conducted via focus groups • Study focus groups • Understand the illustration of research design variables Why study this case?
  17. 17. Apply the concepts of brand positioning • How should a new brand be positioned • How to decide on brand extension • How to ensure that other product lines under the existing brand are not cannibalized Why study this case?
  18. 18. Demonstrating how the attributes of a new product should be decided • Core values that the customers seek • Graphics and design of the product • Sales and marketing Why study this case?
  19. 19. • Vivio was supported only through base trade spending • It was making distribution gains, but there was a need to stay competitive • Management was just skeptical of positioning The need for market research
  20. 20. Research & Evaluation
  21. 21. A brief idea: Company’s sausage business
  22. 22. Vivio’s Sales performance
  23. 23. • Because of the ‘home-grown heritage’ • To ensure fresh products, as national brands principally sold frozen products Why not a national Italian sausage brand?
  24. 24. The four-step Positioning process
  25. 25. Step I Planning new research on the target customer (Qualitative)
  26. 26. Initiation: • 4 highly interactive “mini” pilot groups out of a Pennsylvania research facility were formed with 4-6 users per group-men and women aged 25-50 • It was to get an idea of what values do customers expect from an Italian sausage to deliver Step I
  27. 27. Forming of the focus groups: • Liz Keller, a top brand consultant, and a marketing research professional were introduced. • Participants of focus groups were recruited based on A&U data • Groups had to be manageable economically feasible Step I
  28. 28. Objectives: • To understand current customer behaviors and unmet needs • To get a clear idea of product benefits and attributes • To know the core values and role of the product Step I
  29. 29. Finally, 103 women were selected out of 437 cold-called female heads-of-household, as females were the best source of insights • Focus group sessions were conducted with all these women Step I
  30. 30. Step II Building on learning from the focus groups (Qualitative)
  31. 31. Consumers’ behaviors revealed: • Three consumer groups existed: 1. Heavy users- purchased at least once a week during fall and winter. 2. Medium users 3. Light users- purchased at least once every six weeks Step II
  32. 32. • Italian sausage was considered a great ‘meal- maker’ • It was a meal everyone enjoyed • The Vivio brand was seen to be of exceptionally high quality by all the users alike Step II
  33. 33. On the brand name issue: • Respondents preferred an Italian name. Vivio ranked 7th out of 20 names. Step II
  34. 34. • ‘Saxonville Italian Sausage’ received a lot of votes irrespective of other product usage Step II
  35. 35. • In bratwurst-dominant areas, however, its ‘German-seeming’ heritage ranked it poor Step II
  36. 36. Perceptual maps constructed: Step II
  37. 37. Another one: Step II
  38. 38. Clearly… Italian sausage was the perfect ‘meal-solution’ for its trade off time and skills required to prepare a meal. Step II
  39. 39. 6 distinct potential territories revealed from the focus groups to position the brand: 1. Family connection 2. Clever cooking 3. Confidence 4. Appreciation 5. Quick and easy 6. Tradition Step II
  40. 40. Conclusions: • ‘Dinner dilemmas’ were figured out • The most important need had to be finalized • Accordingly, products’ core values were to be decided Step II
  41. 41. Step III Building positioning concepts (Qualitative)
  42. 42. A ‘brand ladder’ diagram was listed and which value is at the top was to be decided • All ideas related to a woman doing a job as a great mother and homemaker Step III
  43. 43. Four mock concepts were introduced: 1. Family connection 2. Love 3. Balanced 4. Creative cooking Respondents had to prioritize their 3 favorites Step III
  44. 44. This is how they voted Step III
  45. 45. • Family connection and clever cooking were the two most viable concepts to brainstorm upon Step III
  46. 46. The constraints they were facing: • Brand’s national launch was scheduled for early 2007 • No discounting on the product’s set price Step III
  47. 47. Manageable list of ideas analyzed in: Step III
  48. 48. Step III
  49. 49. Step III
  50. 50. Step IV Additional research (Quantitative)
  51. 51. Purchase intent scores were calculated as: Step IV
  52. 52. Clearly.. Family connection scored better Step IV
  53. 53. Possible reasons considered by Banks: • Existing brands’ ‘authentic Italian heritage’ • Family connection’s inherently motivating nature Step IV
  54. 54. Which Concept wins? Family connection or clever cooking? The Big Question?
  55. 55. From the purchase intent scores, % that would definitely buy the product: Family connection Clever cooking 23 41 The Analysis
  56. 56. Mindset dealt with while making the purchase: Family Connection Clever Cooking Bringing all the family The female is seen members together while to be indulged in having the meal cooking good for the family The Analysis
  57. 57. As the female herself is the main figure who’s to make the purchase, Giving her cooking an appreciating touch is more likely to prevail- a great homemaker The Analysis
  58. 58. What do perceptual maps suggest: Clever cooking, with little skills required, scores high on ‘family-pleasing’ axis as well It is both easy to do and connecting the family The Analysis
  59. 59. Concluding… Clever Cooking is the territory to go for! The Analysis
  60. 60. The Next Question
  61. 61. How to position the brand?
  62. 62. • Saxonville enjoys a great brand reputation • Vivio was ranked 7th among Italian names Saxonville was ‘the family company’- it reflected great value The Analysis
  63. 63. • “Saxonville Italian Usage” received a lot of votes irrespective of its other product usage • Anything from Saxonville was assumed to offer great quality The Analysis
  64. 64. • The bratwurst-distributed areas might not accept it, BUT… With proper advertising and creation of core values, it could be used to strengthen the brand even more The Analysis
  65. 65. • The focus groups suggested that the product lines were not going to interfere and they had nothing to do with each other This feared away CANNIBALIZATION The Analysis
  66. 66. Concluding…
  67. 67. It was expected to offer product of great quality
  68. 68. “Saxonville Italian Sausage” enjoyed more brand reputation than Vivio, or a new brand
  69. 69. With clever cooking concept being sold, it gave a ‘family product’ feeling too, to the customers
  70. 70. “Saxonville Italian Sausage” The Winner
  71. 71. Supporting tactics offered
  72. 72. • Different forms may be produced to fulfill various needs • Fresh herbs can be inserted in the sausage to give it a ‘fresh’ feel without impacting the taste • Different flavor to keep it exciting R&D
  73. 73. • Use of background pictures, fresh ingredients depiction, the Italian flag Graphics
  74. 74. • Temporary Merchandising Display units that carry recipe cards, great cooking-with-sausage graphics • Refrigerated display units placed in the produce and dry grocery sections • Celebrity recipes- women might love that Sales
  75. 75. Ann Banks and her team did a great job. She is surely up to impress the managing team of Saxonville.. Isn’t she? Take Aways from the case
  76. 76. Credits Slides created by: Kumar Ankur, as part of an internship done under the guidance of Prof. Sameer Mathur (