johnsonville variety sausage pack - web viewjohnsonville variety sausage pack. presented to: the...

Johnsonville Variety Sausage Pack

Presented To:

The School of Business

California State University, Monterey Bay

Presented By:

Joey Moccia, Erik Price, Christopher Kyle

May 5, 2013

Johnsonville Marketing Plan

Table of Contents

List of Tables and Figures.........................................................................................................4

Executive Summary.................................................................................................................5

Market Analysis.......................................................................................................................7Situation Analysis.............................................................................................................................7Market Summary.............................................................................................................................7Demographics..................................................................................................................................8Geographics.....................................................................................................................................9Psychographic/Behavioral Factors..................................................................................................10Market Needs.................................................................................................................................10Market Trends................................................................................................................................11Market Growth..............................................................................................................................11

SWOT Analysis.......................................................................................................................11Strengths........................................................................................................................................11Weaknesses...................................................................................................................................12Opportunities.................................................................................................................................12Threats...........................................................................................................................................13Product Offering.............................................................................................................................14Competition...................................................................................................................................15Keys to Success...............................................................................................................................16Critical Issues..................................................................................................................................16

Marketing Strategy................................................................................................................17Marketing Strategy.........................................................................................................................17Value Proposition...........................................................................................................................17Mission Statement.........................................................................................................................17Marketing Objectives.....................................................................................................................17Target Markets...............................................................................................................................18Positioning.....................................................................................................................................18Strategies.......................................................................................................................................18

Marketing Mix.......................................................................................................................18Pricing............................................................................................................................................18Distribution....................................................................................................................................19Marketing Communication.............................................................................................................19Market Research............................................................................................................................20

Financials...............................................................................................................................21Break-Even Analysis.......................................................................................................................21

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Sales Forecast.................................................................................................................................21Expense Forecast............................................................................................................................22Controls.........................................................................................................................................22Implementation.............................................................................................................................22Marketing Organization..................................................................................................................23Contingency Planning.....................................................................................................................24

References.............................................................................................................................25

Appendix 1: Team Survey Taken March 8, 2013.....................................................................26

Appendix 2: Variable and Fixed Cost Calculations..................................................................27

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List of Tables and Figures

Figure 1: Age of Survey Respondents………………………………………….....................……8

Figure 2: Flavor preference……………………………......................……………………...…….9

Table 1: Competitor’s Marketing Mix………………………........................………………..….15

Figure 3: Distribution Channel………………………………………………………………..…19

Figure 4: Break-Even Analysis…………………………………………………………….…….21

Table 2: Sales Forecast…………………………………………………………………………..21

Figure 5: Marketing Team……………………………………………………………………….24

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Executive Summary

Johnsonville’s line extension of dinner sausages is expected to become a market leader due to

our choice ingredients and flavor combinations. These sausages will initially be sold in

Kankakee, Illinois, and later spread across the nation. Our product will contain only the best

ingredients while offering a variety of flavors and individual packaging. The ingredients are

organic and the packaging will be comprised of biodegradable materials. This will be attractive

to the potential consumers buying our product over other meat offerings.

Johnsonville’s target market will be males between the ages of 25-55. This demographic has

been specifically targeted due to the responses from our primary research, which was conducted

on March 8th. We will differentiate ourselves by using labels which demonstrate our dedication to

an organic and health-orientated lifestyle. Moreover, we will collect annual surveys to gauge

consumer sentiments towards our product.

Americans are becoming increasingly aware of health concerns, and our product will seize this

opportunity. The product which we offer is beneficial to shoppers who are concerned with

sodium intake and added preservatives. All of the ingredients offered are organic and will

contain no Genetically Modified Organisms. Our product is also packaged with biodegradable

materials.

The competitors Johnsonville is up against include Sara Lee, Oscar Mayer, Hormel, and Premio.

All of these brands are located in grocery stores such as Safeway, Publix, and Kroger Foods.

Very few of our competitors sell sausages that are completely free of GMO’s and plastics.

Multiple factors can affect the result of Johnsonville’s product. The first being the economic

condition of the United States because the state of the economy directly affects the price of our

materials. If this were to happen, we would need to settle for lower quality ingredients in our

sausages. A reduction in the price and quality of materials purchased will greatly inhibit our

success.

Our sausages are slightly higher priced than the industry average, and we will have to convince

consumers that our product is superior. The food market is dynamic and constantly changing.

The current trend in the U.S. is healthy and sustainable foods. This means products that contain

low amounts of preservatives and no chemically altered ingredients.

The fixed costs associated with operating our business include the monthly rent of $2,850. We

anticipate in that we will need three employees to keep our business running. The variable costs

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associated with our company are $8.78 per unit. The company expects to break even once our

product sales 14,065.57 units, this would equate to roughly $140,657.00 in revenue. It is

expected that our team will become profitable in the fourth quarter of this year.

The marketing strategy Johnsonville will use to promote these sausages will be a “more for

more”. We will emphasize the quality of our product, even though it will cost more. Our product

will be promoted through social media and online advertising, thus lowering our advertising

expenses.

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Market Analysis

Situation Analysis

Consumers in today’s market are faced with many decisions when shopping for food and more

specifically, meat. Consumers are faced with a variety of options that include taste, price,

quality, and variety. When cooking for a party, consumers must decide what options of meat are

going to be purchased and eaten. Theoretically, a vast variety of meat would be preferred.

However, some consumers do not have the means to purchase assorted types of meat and flavor.

Market Summary

Consumers in the sausage market are in need of more variety provided from an affordable brand.

Dinner sausage typically comes in packs of four or six links, or 16 oz. of ground beef, and these

packages consist of the same flavor sausage with no variety. For a consumer to meet the flavor

needs of different palates one would need to buy two to four different packs of sausage, each

with six links in them. That results in overspending and a possible waste of meat. Currently, few

brands offer variety packs of sausage, including American Pride Foods, Bavarian Summer

Sausage and Big Easy Foods. Unfortunately for consumers, these are all products that come in

bulk and can be found at Costco. They are meant for serving large groups of people, not the

everyday sausage consumer.

Clearly, for most sausage consumers, the variety packs offered by the other brands are not good

solutions to increase diversity, they are too expensive. Johnsonville currently targets the

everyday consumer so these brands aren’t going to be direct competitors. The direct competitors

include Sara Lee, Premio, Oscar Mayer Foods, and Hormel Foods. These brands offer personal

packs of sausage similar to ours, but lack diversity. To achieve desired variety, consumers end up

spending double or triple of what is necessary when they purchase from these brands.

Johnsonville is the current leader in the sausage market, but it is just as guilty as the rest when it

comes to depriving the consumers of options. By incorporating our team’s direction, in terms of

taste, variety and affordability, they can take over the market.

The target markets that we will concentrate on will include large grocery stores such as Kroger,

Ultra Foods and Walmart. The majority of Americans shop at these stores so targeting them will

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produce the most product awareness. Once the product begins to succeed, it will move into

smaller stores such as Whole Foods Market and Trader Joe’s.

Demographics

Our team developed a survey that consisted of questions that involved age, gender, sausage

flavors, and favorite meats. This questionnaire was distributed via social media, and in person

methods in order to gather customer opinions at Costco, SaveMart, and Safeway. The data

provided in this survey allowed our team to target specific demographics. My two colleagues and

I asked customers entering. We also sent out the survey via Facebook and email. This gave us

the opportunity to distribute our survey all over the country. We conducted between the hours of

11:00am and 4:00pm. A total of 67 volunteers took our survey. Figure 1 below displays the ages

of all volunteers.

Figure 1: Respondents by Age, Taken March 8, 2013

As seen on the chart above, 39% of all respondents were between the ages of 18-25 and 22%

were between the ages of 26-35 and 45-55. This makes for a staggering 83% of respondents

between the ages of 18-55. A question that the volunteers responded to was flavor preferences.

This is a huge asset to our production because we want to see what flavors will be most popular

in our variety packages. Figure 2 below exhibits the flavors that respondents preferred.

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Figure 2: Flavor Choices, Taken March 8, 2013

Classic Italian, Garlic and Basil, and Chipotle were the top three choices. We will heavily

advertise these three flavors after commencing our advertising campaign. The other flavors will

be included in order to meet customer expectations and demands.

Geographics

We will begin marketing our product in and around Kankakee, Illinois because it is perfectly

situated near Johnsonville’s meat packing facilities. We believe that we should maximize current

relationships between Johnsonville and its retailers. Our team will focus primarily on stores such

as Publix, Kroger and Ultra Foods because of their name recognition. We have chosen this

strategy because it would be easier to advertise and distribute a product near the source of origin.

Consequently, this will reduce costs associated with transportation and cooling. Thus our team

can work to further mitigate additional costs by utilizing Johnsonville’s established

infrastructure.

Once we are able to achieve brand recognition and market share, our team will begin to expand

to each of the seaboards. Most grilling occurs in warm and sunny areas, so we will target the

Sunbelt heavily, e.g. western and southern states, although, we will not rely solely on these

regions for our success. Sausages can be eaten at any time and it is our aim to ensure that this

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occurs. We will focus on stores that are located in highly urban areas. This measure will allow

our product to come in contact with more people than would be experienced in rural and austere

environments.

Psychographic/Behavioral Factors

According to the data in Who’s Buying Groceries, the biggest spenders on sausage include

households that are married with children, earn over $100,000, and have graduated college (The

New Strategists Editors, 2012). The biggest spenders include married couples between the ages

40 and 55 years old, which includes the last of the baby boomers. Unfortunately, the baby

boomers are becoming empty-nesters, and the generation Xers are beginning to fit the

description of the “best customer”(Who’s Buying Groceries). Therefore, we must attract the

younger 25-35 year old age bracket of the smaller generation X.

We are targeting consumers that are regular users that prepare sausage more than once a week.

We also hope to attract occasional users that only purchase sausage one or two times a month.

Our product will appeal to those seeking the following benefits:

Quality

Sustainability

Convenience

Health

We hope to gain the business of customers that are informed and aware of what goes into their

food. We anticipate them to be very positive and enthusiastic towards the product, bringing them

back for more. In the end, the most important behavioral factors to the marketing of our product

are the consumers’ concerns for a healthy and sustainable lifestyle.

Market Needs

Consumers are more cognizant of their actions and they are beginning to demand higher levels of

quality from their products. They are more aware of issues such as organic foods; this segment

has been consistently growing. Currently 58% of Americans said that they prefer organic and

low sodium options over conventional products (Hensley, 2011). We have targeted grocery

stores such as Kroger and Ultra Foods, both of which have large and expanding organic and

health food options. We want to target those who are health conscious because they are our

target market. By providing consumers with more options we are certain that we will be able to

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increase our market share. There are many sausage companies that use sustainably raised meat

products and low sodium options including D'Artagnan, Shady Brook Farms, and Shelton's. We

will be able to differentiate ourselves in the marketplace because of our options and flavors.

Market Trends

Various retailers have begun to market gourmet sausages because consumers enjoy a variety of

products. Industry leaders within the marketplace have estimated that the demand for sustainable

agriculture will grow by nine percent (Delate, 2012). This growth is beneficial for our product

because we will be able to seize upon this opportunity. Iowa State University stated, “rapid

growth in the organic sector has highlighted issues that need to be addressed: shortages of

organic raw materials” (Delate, 2013). This will be beneficial as the current demand for

sustainable and organic products exceeds the supply.

Market Growth

According to the Center for Disease Control and Prevention, “more than one-third [35.7%] of

adults in the U.S. are obese” (Ogden, 2012). This means that obesity related health concerns are

constantly growing in today’s market. Consumers are becoming more aware of which foods are

healthy and which lead to obesity. Offering a healthier selection of food products consumers

enjoy will result in an increase of new and returning buyers.

Even though the obesity rate is high, healthier food products are not the only growing market

trend. Environmentally friendly products and packaging are major concerns for consumers today.

According to the World Packaging Association (WPA), “64% of consumers view recycled

packaging as a major concern” (WPA, 2011). By having biodegradable packaging on our

products, it will open up a new range of potential buyers.

SWOT Analysis

Strengths

Currently Johnsonville is the market leader in sausage production, and as part of its line

extension, our product will be synonymous with quality and flavor. We anticipate the three

flavor choices per package will entice people towards our product because the current market

lacks diversity. We will be packaging our products using biodegradable packaging so that

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consumers do not have worry about harming the planet. Our sustainable practices will be what

set us apart within the marketplace while offering competitive prices to the consumer. Pricing

will be standardized for all regions as the product demand increases. Our product will be

completely different from what currently exists on the market, thus giving us an advantage over

the competition.

We will be working with Johnsonville because it has the infrastructure to support the creation

and production of sausages. This will reduce the amount of investment needed to build a meat

packing center. This will also limit the amount of equipment that is needed for our product

because we intend on using the established platforms at Johnsonville. Moreover, this will reduce

our shipping costs because we will focus on the Illinois region first. Once established, we will

begin to move our product outside of the state. Our team plans on reinvesting the saved money

into advertising.

Weaknesses

Our product is new to the market and consumers don’t know that it exists. Customers are

familiar with the Johnsonville brand, but not with this new variety. The public is not aware of the

improvements that have been made in our sausage. By putting our product in only three stores

we are cutting costs, but we may be missing out on a lot of possible buyers. The current facilities

are unfamiliar with the making and packaging of this specific product, and the cost of packaging

will increase with the new individual casing.

Opportunities

The American people are concerned about their health and what they eat now more than ever.

We see this as an opportunity for a high-quality, low-fat, healthy product to enter the market that

satisfies those concerns as well as the consumers’ taste concerns. “The 2012 Food & Health

Survey: Consumer Attitudes toward Food Safety, Nutrition & Health is the seventh annual

national quantitative study designed to gain insights from Americans on important food safety,

nutrition and health-related topics” (Food Insight). According to the survey, nearly all Americans

stated that they “have given at least a little thought to the healthfulness of their diet, physical

activity, and the safety of their food”(Food Insight).

The problem is that the public is having trouble figuring out how to eat healthfully. About half of

the survey’s respondents said that it is harder to do their own taxes than to figure out what is and

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isn’t healthy (Food Insight). We see this as an opportunity to provide American’s with a product

that they can trust is safe and healthy. However, healthfulness is not the most important factor

when making food-purchasing decisions; it ranks third according to the survey. The two most

important factors are taste and price, in that order. So we can never neglect the need for great

tasting food at a decent price.

Americans are also showing more concern for the environment and the need for sustainable

products. According to Nielsen’s Global Online Environmental Survey, the “global unease over

the use of pesticides, packaging waste and water shortages overtake global warming as top

concern” (Nielsen). We see this as another opportunity to help consumers by providing our

product in an environmentally friendly way.

Although meat isn’t the top choice for consumers when they think to be healthy and lose weight,

we see a chance to contribute to healthier lifestyles around the country. We also seek to be a

factor in improving the sustainability of the industry.

Threats

Since health concerns are a major problem for consumers in today’s market, people may be

looking for vegetarian and vegan alternatives. Meat, especially sausage, has high levels of

saturated fat. This is a major concern for consumers because high levels of saturated fat can raise

cholesterol level and increase the risk of heart disease.

We might be hindered by market fluctuation because consumers may lose interest with the

organic market we are entering. If the trend toward organic products starts to decline, our

product would be significantly affected.

Another situation that can hinder our product would be E. Coli. This is a disease that can

outbreak in some of the crops we purchase such as the herbs and basil. We also might be

hindered by government regulations. Laws and policies are always changing in the food and

agriculture business. A new regulation enforced by the government could easily set back our

product and increase production costs.

Product Offering

We will create a package of 6 dinner style sausages that of premium cuts of chicken, beef or

pork. We will choose meats that have not been injected with growth hormones, and that is

outside of the typical “slaughtering” paradigm. Our meats products will originate from farms that

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have exceptionally high ratings on as outlined in the Federal Meat Inspection Act. This will

minimize the effects of contaminated meats from unsanitary conditions. Our sausages will not be

laden with preservatives such as BHA & BHT, Olestra and Propyl gallate. These additives have

been linked to cancer (Heist, 2012.). Furthermore, our sausages will be low sodium so that we

are able to attract consumers who are allowed a minimal salt intake. This consideration will help

our team broaden its fan base by providing quality meats. We have also decided on choosing a

thin casing for the sausage so that the product is protected without it impeding the meal.

The herbs that we will use will be organic and washed in a cleansing solution of bleach and

water to reduce the amounts of E. Coli. E Coli is a naturally occurring bacterium which exists in

soil. As the crops are removed and sent for packing, soil comes into contact with the edible

portions. If not washed correctly, this could lead to serious illness and possibly death (Purdue

University, 2010). What will set our product apart from the competition is that we will ensure

that contaminants are non-existent prior to them being placed in our product. It is impossible to

mitigate all risks associated with contamination, although careful planning can reduce these

effects. We will have a label stating that our product is not Genetically Modified because we

want to be one of the few companies who advertise this crucial piece of information. From the

responses to the initial survey, we have chosen these flavor varieties:

Garlic Basil

o Premium chicken cuts, roasted garlic, dried basil leaves, white wine and spices.

Chipotle

o Whole chipotle pods, pork, beef, roasted jalapenos, apple cider vinegar and spices

Classic Italian

o Tenderized pork, Italian herbs and spices, white wine

Each sausage will be under 200 calories and approximately 6.5 inches long, thus offering size

without being calorically heavy. The large size will counteract the shrinkage that will occur

during the cooking process. We will be using a wrapper that is biodegradable because we want to

limit the amount of waste that is created by our product. Each sausage will be individually

packaged so that the consumer will not be concerned about safe storage or exposure to pathogens

in the air. Having each sausage being fully contained will ensure that our products will be able to

reach their maximum storage life. Around the outside of the original biodegradable packing will

be cardboard. We will be using soy based ink products on recycled cardboard packaging. Eco-

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friendly packaging will attract consumers of all ages who want a product that tastes great and

that is environmentally responsible.

Competition

The main competitors Johnsonville currently faces are Sara Lee, Oscar Mayer, Hormel, and

Premio. Table 1 below compares the “4 P’s” of each brand.

Table 1 – Competitor’s 4 P’s

Brand Product Price Place Promotion

Sara Lee

Jimmy Dean Breakfast

Sausage 8 ct. $3.69

Grocer

y

Fast, easy; More flavorful

(Jimmy Dean)

Oscar

Mayer

Classic Beef Franks 10

ct. $3.49

Grocer

y

Tasty family fun

(Oscar Mayer)

Hormel

Andouille Sausage

8 ct. $7.49

Grocer

y

Finest quality and craftsman

ship in sausage

(Hormel)

Premio

Italian Sausage 6 ct.

Sweet/Hot Combo $3.99

Grocer

y

Real Italian taste made with

real imported fennel

(Premio)

The one thing that each of the above brands have in common is that they fail to promote any sort

of organic, healthy benefits. This is where we can differentiate Johnsonville from the rest. By

placing labels that illustrate the organic produce, we will stand out to our target market. The only

brand that promoted a similar product to ours is Premio. They have a sweet/hot sausage combo

pack for the people that are “having trouble deciding if they’re a hot or sweet kind of

person”(Premio). To differentiate from Premio we need to really focus on the many different

varieties offered as well as the labeling.

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Keys to Success

For our product to be successful, we will rely on organic and healthy foods to stay trending. This

will make our product stand out on the market because it is a healthier alternative to similar

products. Our organic products and environmentally friendly packaging will lead among

competitors. The sausage market is a unique market that will never disappear. Sausages are a

staple in backyard barbeques and tailgates. The variety package will lead the market of

barbeques because it offers options of delicious flavors to each person eating.

Our low shipping costs will be a major component to our success. Since we are distributing first

in the same town as our packaging plant, prices on shipping will be very low. We will be able to

use the saved money for advertising our product and creating new varieties. After getting our

product out to the market, a group of loyal followers will be behind us. This will give us the

opportunity to create new variations of our product and gain popularity of our merchandise.

Critical Issues

Our product will face many issues that can seriously affect the company. Lack of exposure of our

product can hurt sales. If consumers do not know about our product, it will be hard to gain a

profit. Consumers might also not be fond of the flavors that we offer. Also, fluctuating prices in

the raw materials we purchase can seriously affect our product. For example, the organic produce

we put in our sausages could easily have price fluctuations. Raising prices could put us out of the

market that we are currently in. Lastly, transportation costs can easily increase. Oil prices today

can easily vary which would lead in more expensive shipping costs. Increased oil prices would

also lead to more expensive storage, cooling, and distributing costs.

Marketing Strategy

Marketing Strategy

The quality sausage that we will offer consumers will be the most desired on the market. Being

the healthiest sausage on the market is only a fraction of what we have to offer. We will

individually package each sausage with an environmentally friendly corn-based plastic. This will

make it simple to maintain the freshness of the ingredients after the first use. All of the

ingredients used in the sausage will be organic. We will have appropriate organic and non

Genetically Modified Organisms (GMO) labels on our packaging. Furthermore, we will

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continually survey our customers and see which flavors are preferred. This will keep our product

current and it can potentially expand what flavors we offer.

Value Proposition

Our sausage is made for consumers who are looking for a healthy, organic based sausage without

the use of genetically modified ingredients and high amounts of preservatives. Our product is

high in protein contains only organic ingredients and each sausage is individually packaged. This

will offer the consumer a healthier and convenient sausage that is not currently on the market.

Mission Statement

“To create superior sausages using sustainable and environmentally friendly products in order to

delight consumers.”

Marketing Objectives

Our marketing plan seeks to influence sausage consumers to choose a better, healthier, organic

sausage. We must show why our product is a better option than other brands.

Our product is superior because of the ingredients inside, and we provide Non-GMO labeling to

inform customers what goes into their food. We provide quality that can be tasted in separate

environmentally packages for convenience. The goal is to show consumers that no other

producer offers the same variety or quality. Once we gain the business of customers, we are

confident that they will remain loyal to our product.

Target Markets

The target market chosen will be males between the ages of 25 and 55 years old located in

Kankakee, Illinois. They will be consumers who are sausage connoisseurs that lead a health-

oriented lifestyle and are willing spend more money for a quality product. Although our product

is priced a little higher than our competitors, it will stand out due to the organic labels and low

preservatives we use. This will be made obvious to the consumer because of the specially placed

Non-GMO and organic labels on our packaging.

Positioning

Our sausage will be positioned in a “More for More” category. This is because our product will

be priced more than our competitors, but it offers more. Our product will offer individual

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packaging for each sausage, allowing the meat to preserve its freshness after opening. All

ingredients in the sausage will be organic and this will be labeled on our packaging. This will put

us above the competitor’s sausages that are filled with preservatives and chemically modified

organisms. This process will be more costly, but it is a healthier alternative.

Strategies

The marketing strategy we are using will be customer-driven. We will let the quality of our

product speak for itself. The age ranges we are targeting are males 25-55 years old starting in

Kankakee, Illinois. This will be the consumer who enjoys to barbeque sausage but also lead a

healthy lifestyle. We will have low shipping costs because the packaging plant is located in the

same town as our starting target market. This will allow us to spend money on advertising costs

and surveying customers on which flavors are favored.

Marketing Mix

Pricing

The price of our sausage was determined by comparing our competitor’s prices. We are

producing the best quality sausage in the market and our price will reflect that. Our product will

sell for $10 for a pack of six sausages. The price is above market value because it contains the

highest quality, organic ingredients and no other sausage compares.

Distribution

To increase efficiency and reduce costs, we will begin distributing to local stores in Kankakee.

This will allow us to use a three-tier distribution channel in which we ship directly to the retailer

and avoid the wholesaler. We will be using a Just-In-Time Inventory system to maintain

freshness and avoid wasting any product. Figure 3 shows a simple version of the distribution

channel we will use.

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Figure 3 - Distribution Channel

Marketing Communication

The promotion mix for this new product will focus on advertising, public relations, and direct

marketing. We will not be using any sales promotions when promoting our product.

To expand our business beyond our local area we must prove to retailers that there is a high

demand for our sausage. To achieve this success we must build awareness through advertising.

We will not be advertising on television due to the high costs, but we will create a commercial to

put on YouTube. The goal is to come up with a humorous, unique video that has possibilities of

going viral. We will also advertise on numerous forms of social media. Customers will see our

product on Facebook, Twitter, LinkedIn and Pinterest.

We will also rely on our public relations team to create product awareness. PR is responsible for

creating the high quality image that we seek. We will create a blog so the public can post about

our product and create a buzz. Also, at the Kankakee County Fair we will have a booth set up

preparing free sausage samples for people. This will give consumers a risk free way of tasting

our product without having to purchase it. We will also work with the Chicago Bears to become

sponsors to build awareness to football fans in the area.

Our communication objective is to increase customers’ awareness and knowledge of our product.

Every promotional tool is directed towards achieving this goal because customers won’t

purchase product they are unfamiliar with. Once we get the customer to try our sausage, we

know the quality will sell itself.

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Market Research

Our primary research was collected using a questionnaire that was conducted on March 8th, 2013.

This questionnaire was distributed on various social media sites, and in person at Costco, Costco,

SaveMart, and Safeway in order to gather customer opinions. Additional information regarding

the survey can be located in Appendix 2. There were 67 respondents who took the survey, both

using digital and in person forms of communication. The data, which was collected in this

survey, allowed our team to pinpoint who our target audience is.

Our secondary research was gathered at various several local grocery stores to see what types of

additives were placed in their products. We analyzed their usage of packing, lettering and font of

our competitors to determine what is common within the market. Our team also used online

resources from credible sites in order to gain an inside perspective on dinner sausage.

Future market research will be conducted by offering customer feedback surveys to consumers.

This will give our team insight into potential future flavors. We will then use this data in order to

distribute our product to grocers outside of Illinois. Our future goal would be to sell our product

in Trader Joes and Whole Foods because their products are synonymous with quality and

sustainability. We must ensure that all research is conducted thoroughly in order to break into

these markets.

Financials

The next couple of sections below illustrate our Financial Analysis

Break-Even Analysis

The table below demonstrates the variables used in the Break-Even Analysis

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Figure 4: Break-Even Analysis

Sales Forecast

Table 2: Sales Forecast

Measurement of Time Beginning on:Units Sold

Sales

1st Quarter 1-Jan-13 1,100 $11,000

2nd Quarter 1-Apr-13 1,200 $12,000

3rd Quarter 1-Jul-13 9,000 $90,000

4th Quarter 1-Oct-13 10,500 $105,000

2nd Year 1-Dec-14 28,000 $280,000

3rd Year 1-Dec-15 28,500 $285,000

Expense Forecast

Listed in Appendix 2 are the specific marketing expenses that we will have to adhere to in the

business. Listed below are some fixed and variable costs need to be considered as well.

Fixed Costs:

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· Non-GMO certifications

· USDA organic certification

· Government fees

· Utilities

· Real Estate

Variable Costs:

· Monitoring social networks

· Public relation events

· Email maintenance

Controls

For our product to be successful, there are multiple controls that need to be taken into

consideration. First, we will collect weekly sales reports from the distributors that carry our

sausages. This will see where sales are highest and where we need to advertise our product more

heavily. We will collect demographic reports at the end of every month. This will explain to us

which consumers are buying our product and whether our marketing strategy is correct or not.

This helps us decide which areas of our concentration need to change. This will also tell us if we

are getting repeat buyers. Returning buyers are going to be a major factor for our product’s

success. We will also have surveys on our package labels. It will direct customers to our website

that has surveys of our product, we will ask customers to rate the taste and flavor. This will allow

us to see which flavors consumers prefer. We will offer product giveaways and prizes to random

survey takers. Offering giveaways will make consumers more inclined to take the survey.

Implementation

To begin the implementation of our product, we have to first get certifications that show our

product is USDA organic and Non-GMO licensed. This means the companies that supply our

raw materials will have to possess these licenses. Getting these certifications will be the most

important aspect for our product. This will allow us to label our packaging with these

certifications and increase interest in our product.

As soon as the proper certifications and licenses are taken care of, we will use just in time

inventory. This means that we will be able to make shipments of our product whenever it is

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necessary. This will also keep our product as fresh as possible. Just in time inventory will allow

us to keep from freezing our sausages.

After our product is in the stores, we will develop a close relationship with all of our distributors.

We will offer free samples and product giveaways every quarter to each distributor. This is a

win-win situation for both distributors and us because it will bring in more customers and

promote our product at the same time. Developing a close relationship with our distributors will

be a key role in making or sausages more successful among our competitors.

Marketing OrganizationFigure 5 - Marketing Team

As displayed in Figure 4, our Marketing Department Personnel consists of three teams: a tech

team, a sales team and public relations. The tech team is responsible for all of the online

marketing. This includes the maintenance of our social networks, blogs, and our company

website. These must be up to date at all times and without defects or viruses.

We will also need a sales team to represent the company to the retailers. Since we are starting out

in such a small geographic area we won’t need more than one sales rep, but as we expand, our

sales force must grow. The sales representatives are responsible for creating and maintaining

good relationships with our business customers. They must be friendly, motivated and

disciplined. Above all else, the ability to build relationships is the most important trait of a sales

representative.

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As previously stated, our PR team will be heavily relied upon to build product awareness. They

are going to be the ones out in the field promoting our product at events and creating a buzz. This

is going to make them the face of the company.

Contingency Planning

Things don’t always go as planned in business, so in order to succeed we must recognize the

risks and possible issues. Like most others, our market is dependant on the status of the

economy. If a recession hits and people stop purchasing sausage, we have the potential to suffer

more than other vendors, due to our high pricing. To deal with this issue we may have to lower

the quality and price of our product. Another difficulty will be finding vendors to supply the high

quality raw materials we need to create the finest sausage possible.

Our biggest fear is lack of consumer awareness. If customers don’t know about our product, our

sales will suffer greatly. Once people are aware, we need to make sure customers like our

product. Because we are putting the best, organic ingredients into our sausage, we are confident

the public will enjoy the taste of our sausage. However, the variety of flavors we offer may not

be preferred. To fight this issue we must be able change our flavors quickly and fluidly.

If we can manage to fight off these possible difficulties, we will achieve success.

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ReferencesDelate, K. (2011). Research And Extension Activities. In Iowa State University. Retrieved

March 5, 2013, from http://www.hort.iastate.edu/research/delate

Food Insight. (2013). 2012 Food & Health Survey: Consumer Attitudes Toward Food Safety, Nutrition & Health. Retrieved from http://www.foodinsight.org/foodandhealth2012.aspx

Heist, K. (2012, June 14). How packaging Protects the Environment. In Harvard Business Review. Retrieved March 12, 2013, from http://blogs.hbr.org/cs/2012/06/how_packaging_protects_the_env.html

Hensley, S. (2012, June 20). Organic Foods Have Broad Appeal. In National Public Radio. Retrieved March 7, 2013, from http://www.npr.org/blogs/health/2011/07/20/138534183/organic-foods-have-broad-appeal-but-costs-temper-demand

Hormel Foods. (2013). Saag’s Brand Overview. Retrieved from http://www.hormelfoods.com/Brands/BrandWall/Saags-sausages

Jimmy Dean. (2013). Products. Retrieved from http://jimmydean.com/products/original-links.aspx

Nielsen. (2011). Sustainable Efforts & Environmental Concerns. Retrieved from http://www.nielsen.com/us/en/reports/2011/sustainable-efforts-environmental-concerns.html

Ogden, C. L., Carroll, M. D., Kit, B. K., & Flegal, K. M. (2012, January). Prevalence of Obesity in the United States. In Center for Disease Control Prevention. Retrieved March 12, 2013, from http://www.cdc.gov/

Oscar Mayer. (2013). Beef. Retrieved from http://www.kraftbrands.com/oscarmayer/hot-dogs/beef.html

Premio. (2013). Premio Hot/Sweet Combo Pack. Retrieved from http://www.premiofoods.com/premio-hot-sweet-combo-pack-132-132-133-324.html

The New Strategist Editors. (2009). Who's Buying Groceries (7th ed.). Ithaca, NY: New Strategist Publications, Inc.

World Packaging Association . (n.d.). Market Statistics and Future Trends in Global Packaging. In World Packaging. Retrieved March 12, 2013, from www.worldpackaging.org

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Appendix 1: Team Survey Taken March 8, 2013

1. Gender: M ___ F___

2. Age: 18-25 ___ 26-35 ___ 36-45 ___ 46-55 ___ 55+___

3. Education Level: Some High School ___ High School Graduate ___ Some

College ___ College Graduate ___ Advanced College ___

4. Race: Asian ___ Hispanic ___ Black ___ White ___ Other ___

5. Location:

City: _____________________________________________________________

State: ______________________________________________________________

Zip Code: __________________________________________________________

6. Social Class: Upper Class ___ Upper Middle ___ Middle ___ Working Class ___

Lower Class ___

7. How many days per week do you eat sausage?

once ___ 2 or 3___ 4 or 5 ___ 6 or 7 ___

8. How many times in a month do you Barbeque?

Once ___ Twice ___ 3x ___ More ___

9. Select your preferred flavor:

Chipotle ___ Garlic & Basil ___ Classic Italian ___

Jalapeno ___ Smoked Apple ___

10. On a scale of 1-10, how important is variety of sausage?

11. How do you prefer your sausage?

Chunks ___ Fine Ground ___ Links ___

12. Would you benefit from combo packages of multiple meat options that include turkey, beef,

chicken or pork? Yes or No.

13. Do you pay attention to G.M.O. labeling and added preservatives? Yes or No.

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Appendix 2: Variable and Fixed Cost Calculations

Requirement Total

Renting Building $2,850

Employee Wages (3) $1,440

Total Fixed Costs per Week

$4,290

Contribution Income Analysis

Price Per Unit $10.00

Number of Units Sold 12812

Total Sales $128,120 100%

Less: Variable Production Costs $25,624.00 20%

Less: Variable Selling Costs $0 0%

Total Variable Costs $25,624 20%

Contribution Margin $102,496 80%

Less: Fixed Production Costs $17,160 13%

Less: Fixed Selling and Administrative Costs $0 0%

Total Fixed Costs $17,160 13%

Income Before Taxes 39% 39%

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