product development analysis

7/29/2019 Product Development Analysis

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1.0 Executive Summary

1. The current marketing plan for Hanschell Inniss is designed to position the product, Farmers

Choice, at the best value for money and support the sales target.

2. The product has 40% of the market share and is available in bacon, slice ham, chicken chunks,

burgers, and wieners. These are sold throughout most retail outlets at prices comparable to

competing brands.

3. The new marketing strategy is aimed at health conscious females between 24-45, who need to

prepare a quick but nutritious breakfast for them and their family.

The aim is an assessment of the product line of this Barbadian retail company and an attempt to

introduce a healthier product to the customer. The process embraces marketing techniques and

processes to be gone through in making a logical and informed decision as to the role out of a

new product. This is not structured to be the only method but it has considered some nuances to

be considered by the small open economy. The paper was prepared by Jepter Lorde and

supervised by Aldon Tull, tutor at the Barbados Community College in the area of Marketing.


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Company Background

For approximately 122 years Hanschell Inniss Limited has been providing Barbadians with the

finest selection of produce, foodstuff and other supplies. Founded in 1884 by Valdemar

Hanschell, who was of Danish descent, the then Hanschell & Company supplied ships withropes, sails, salt, fresh fruit, meat, vegetables and water in addition to any other items required.

The Company also loaded the ships with Barbadian products destined for Europe and North

America. While Ship Chandlery continued to be the primary business focus in the early 20th

century, eventually the company branched into the local liquor market with Cockspur and Best

Matured Rums. In addition, other well-known spirit brands were imported.

In the late 1960s, the company diversified into food distribution with the amalgamation of James

H. Inniss. Then in 1973, J.N. Goddard and Sons Ltd. (subsequently Goddard Enterprises Ltd.)

bought a majority interest in the business, thus bringing Hanschell Inniss under the Goddard's

umbrella.

By the 1970s, a new rum-bottling plant was established and Hanschell Inniss was able to

introduce additional quality liquor brands Old Gold, VSOR, Cockspur White and 151 proof.

As the international reputation of Cockspur grew, it attracted the interest of International

Distillers & Vintners (IDV), which approached Hanschell in 1992 and subsequently an

agreement was reached which allowed IDV to handle the worldwide distribution of the Cockspur

brand.

Having successfully entered the liquor and food distribution market, there remained one product

line not represented and that was meat. So in 1979, Hanschell Inniss became involved in meat

processing. In 1979 Hanschell Inniss Harrisons purchased a small meat cutting and packing plant

and started operating a department to produce hamburger patties. The first product in foodservice

was all beef patties and for retail was "Eve" branded hamburgers. Staffing started with one meatcutter and a manager. Within a few months of starting, a decision was made to build a small

plant of 1,200 sq. ft. to expand production. By mid 1980 this plant was up and running,

supplying foodservice and retail with fresh pork sausages and hamburger patties.


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Within two years further expansion was needed and in 1982 a 12,000 sq. ft. addition was

designed and built. Help and guidance was obtained from various sources, especially from

Griffith Laboratories, Canada Packers and Schneiders of Canada. This expansion allowed for the

addition of hams, bacon, wieners and sliced meats to the existing product range. It was at this

time that a separate company, H.I.H. Manufacturing Ltd., was formed to carry on the meat

processing operations.

In 1990 H.I.H Manufacturing Ltd. was amalgamated with Barbados Packers & Canners Ltd., a

company established in 1976 which in addition to frozen meats also produced canned meats.

This new entity became Hipac Limited. In 1992 Hipac Ltd further expanded its portfolio of

products into breaded chicken products such as nuggets, fillets and patties when it merged with

National Foods Ltd.

Today Hipac has a staff of over 170 persons. In addition to the traditional range of hams, bacon,

wieners, sliced meats, hamburgers, fresh sausages, canned vienna sausages and luncheon meats,

breaded chicken nuggets and patties, the company has expanded into easy-to-prepare seafood

products such as breaded shrimp nuggets, fish sticks, "Bajan" seasoned fish fillets, and a line of

canned Caribbean specialty products such as traditional soups, curries and great cake.

With its motto "Nothing Less Than The Best" Hipac Ltd. has grown from humble beginnings toa company that now produces a wide variety of high quality products. With more than a century

of solid achievement, Hanschell Inniss has become one of the leading businesses in Barbados.

Resources

Hanschell Inniss employs 190 people across its various departments.

Hanschell Inniss Today

More than a century and several investments later, the operations of Hanschell Inniss Ltd. extendwell beyond the ship chandlery business that had been its origin. Today the company comprises

four divisions retail, food service, ship chandlery and export.


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Retail Division

The Retail Division markets and sells several major brands such as Eve, Kellogg's, Pillsbury,

Farmers Choice, Johnnie Walker, Gordons, Green Giant, Island Cuisine and Kraft among others.

These are retailed to supermarkets, mini marts, shops and convenience stores and deliveries are

made within 24 hours of receipt of orders.

Food Service Division

The Food Service Division is made up of a knowledgeable team that can act as advisors to

clients. This Division sells and markets all of the company's brands to hotels, restaurants and

small entrepreneurs around Barbados.

Deliveries are made in refrigerated vehicles with the capacity to deliver frozen, chilled and dry

goods twice daily on Mondays to Fridays and once on Saturdays.

Ship Chandlery Division

The Ship Chandlery Division offers all of the company's products to all ships calling at the port.

In addition to food products, this Division also provides decorations, flowers, palm leaves and

housekeeping supplies as part of their service to the ships. For food products, a transshipping

service is available.

Export Division

Hanschell Inniss' Export Division is responsible for the exportation of the Company's products

mainly viennas, sausages, luncheon meats, cooking oil, margarine and liquor brands to other

Caribbean islands.


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2.0 Market Segment and Buyer Behaviour

Market segmentation is the process of dividing a total market into market groups consisting of

people who have relatively similar product needs. Market segmentation is one of two general

approaches to marketing; the other is mass marketing. In the mass-marketing approach,businesses look at the total market as though all of its parts were the same and market

accordingly. In the market-segmentation approach, the total market is viewed as being made up

of several smaller segments, each different from the other. This approach enables businesses to

identify one or more appealing segments to which they can profitably target their products and

marketing efforts.

The consumer buying process is a complex matter as many internal and external factors have an

impact on the buying decisions of the consumer. When purchasing a product there are several

processes, which consumers go through, these are Problem/Need Recognition, Information

search, Evaluation of different purchase options, Purchase decision,Post Purchase Behavior.There are in turn four typical types of buying behavior based on the type of products that are to

be purchased. Complex buying behavior is where the individual purchases a high value brand

and seeks a lot of information before the purchase is made. Habitual buying behavior is where

the individual buys a product out of habit. Variety seeking buying behavior is where the

individual likes to shop around and experiment with different products.

In turn this processing is determined by the good to be purchased, which is divided into

convenience goods, these are relatively inexpensive, frequent purchases; shopping goods for

which consumers wish to compare quality, price and styles; specialty goods are items that are

extraordinary or unique enough to motivate people to make an unusual effort to get them; and

unsought goods these are items that are seldom sought, and which are purchased due to adversity

instead of desire.

Hanschell Inniss need not invest in segmenting the market in which it is operating; this

assessment is based on the primary data response, which has afforded exposure by demographic

age and gender. Consumer buyer behavior although complex is driven by the good and the good

offered by Hanschell Inniss can be defined as a shopping good, in this case the need would be to

adopt a position of reminding current shoppers of the attributes of the brand based on the


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awareness of the brand. There is no indication of segmentation and the approach should be to a

mass based audience currently seem to be the most efficient instrument for utilizing resources

and effectively responding to needs of a socio-economic kind. Advertising does this, among

other ways, by informing people about the availability of rationally desirable new products and

services and improvements in existing ones, helping them to make informed, prudent consumer

decisions, contributing to efficiency and the lowering of prices, and stimulating economic

progress through the expansion of business and trade.

Essentially in making the effort to this mass based audience Farmers Choice will be able to more

efficiently convert advertising dollars to sales without the need to go in-depth research a genuine

and distinct long term advantage.


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4.0 Competitive Analysis

4.1 Market Share Brand Awareness & Positioning

Brand Awareness can be defined as the level of brand recognition that consumers have of a

particular brand and its specific product category. Brand awareness can examine three levels ofrecognition: whether the brand name is the first to come to mind when a consumer is questioned

about a particular product category; whether the brand name is one of several that come to mind

when a consumer is questioned about a particular product category; and whether or not a

consumer has heard of a particular brand name. Positioning simply can be defined as customers

perception of the product offer relative to competitors.

SBI was either unable or unwilling to share information on Brand Awareness and Positioning. A

survey was then commissioned in an attempt to capture this aspect of the analysis and make use

of prevailing techniques to as accurately as possible reflect the perception of customers, these are

the semantic differential scale which asks a person to rate a product, brand, or company based

upon a seven-point rating scale that has two bi-polar adjectives at each end and the dichotomous

question is generally a "yes/no" question. These simple questions seek to measure the results in

one instance and establish consciousness of the brand.

The premise of the data responses was based on a definition of Brand Awareness, that is,

knowledge or consciousness by the public of a brands existence and quality. The raw data and

calculations are shown in Table 1 and Figure 1 respectively. The interpretation is as follows.

The survey returned data that was averaged individually and collectively in order to arrive at

2.98. This falls in the 40-percentile range of the survey and gives only a moderate assessment of

the Home brand. Given the strong infrastructure of SBI and the parent Companies this can be

seen as inadequate and would require a re-evaluation of the present positioning.

The survey was able to capture responses from both gender and age demographics, with

responses in the 10-19 age group having no awareness of the brand and also in the 30-39,

obviously positioning is not what is done to the product, it is however what is done to the mind

of the prospect, that is, the product is positioned in the mind of the prospect.


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On the other hand H Jason Jones determined that their Brand JJ was just as well known as their

competitors and that the Burgers are the best on the island they alluded to the fact that they

controlled more than 50% of their target market, which consist of hotels, restaurants and schools

and that individuals were the smallest segment of their market. The market for hotdogs and slice

ham is relatively smaller as compared to the burgers, as they are unbranded but of the same

quality as the their competitors Eve, Home and Farmers Choice brands as they are all produced

by the same company. H Jason Jones also stated that their products has brand equity, as

customers were aware that to purchase the JJ brand is to purchase a quality product, whether it is

in the Meats, Doors or Beverages.

Market share, in strategic management and marketing, is the percentage or proportion of the total

available market or market segment that is being serviced by a company. It can be expressed as a

company's sales revenue (from that market) divided by the total sales revenue available in that

market. It can also be expressed as a company's unit sales volume (in a market) divided by the

total volume of units sold in that market. It is generally necessary to commission market research

(generally desk/secondary research, although sometimes primary research) to estimate the total

market size and a company's market share. (Table 5)


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4.2 Product Contribution Information and Current Strategy

Current strategy formulation at this time is very difficult for SBI for the individual brand items.

This is due in part to the removal of the Hamburger brand item in an attempt to introduce the

brand item Perronne, it must be understood that this is a necessary repositioning because of the

brands dependence on Hanschell Inniss for production of three of its brands. Interviews with the

distributors have indicated a ranking of individual brand items, these ranking are seen in Table 2.

Given the obvious sensitive nature of the situation SBI is limited by the amount of options with

respect to attempting to aggressively pursue increase market share.

It is believed that SBI should adopt Market Follower strategy or the hitch-a-ride strategy. This

business plan strategy is normally associated with companies in industries that are stable. This

company type is content to just follow the pack. They typically don't innovate nor challenge theindustry with new ideas. It's like they are worn out or have grown old. They just plod along

taking what they can get, changing very little and running along with everyone else. While they

can survive and make money, they are not stars and will not be market leaders unless they make

significant changes in how they do business. Of all the strategies, this is a dangerous one for a

new company and it is not recommended that a business plan be created with this type of new

business in mind fortunately for SBI they are an established company and can afford this

position given the present circumstances.

A follower can gain many advantages. The market leader often bears the huge expenses of

developing new products and markets, expanding distribution, and educating the market. By

contrast, the market follower can learn from the leaders experience. It can copy and improve on

the leaders products and programs, usually with much less investment. Although the follower

will probably not over take the leader, it often will be profitable. Essentially SBI must know how

to hold current customers and win a fair share of new ones. It must find the right balance

between following closely enough to win customers from the market leader while following at

enough distance to avoid retaliation. Each follower tries to bring distinctive advantages to its

target market- location, services, financing. SBI can be a major target of attack by competitors;

SBI must therefore keep manufacturing costs low and product quality and services high. It must

also enter new markets as they open up.


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H Jason Jones is relatively new to the market and as such are making inroads capturing their

share of the market, and to keep their product top of mind. Almost every industry includes firms

that specialize in serving market niches. Instead of perusing the entire market, or even large

segments, these firms target sub-segments. H. Jason Jones is a candidate for this type of current

strategy. Niches are often smaller firms with limited resources. Firms with low share of the total

market can be highly profitable through smart niching. The main reason is that the market nicher

ends up knowing the target customer so well that it meets their needs better than other firms that

casually sell to this niche market. As a result, the nicher can charge a substantial mark up over

cost because of the added value. Whereas the mass marketer achieves high volume, the nicher

achieves high margins.


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4.3 Competitive Strengths and Weaknesses

S.B.I Distributions

SBI is an amalgamation of three major distributors they are Spring Garden Foods, MER

Bourne and Interage Ltd. This has allowed the entity to leverage pre-established market shareheld individually into an integrated and coordinated acquisition. This has been achieved by

streamlining expertise at the position of Brand Manager to avoid duplication and exploiting the

experience gained collectively by each entity in the market.

Contacts developed by way of years of industry experience equates to invaluable word of mouth

marketing and networking, attributes needed to maintain and further build on any attempt to

entrench SBI position in the market. Coupled with its association with the Barbados Shipping

and Trading as a wholly owned subsidiary and in turn Barbados Shipping and Trading being

wholly owned by the conglomerate Neal and Massey, SBI is in a position to access promotion

assets through BCB communications, and distribution support through the Super Centre chain of

supermarkets for a marketing campaign of any type.

The product portfolio is of manageable size and is backed by an inventory control system which

attempts to ensure adequate inventory to meet customers needs without incurring additional

costs of carrying excess stock hence the use of JIT or Just In Time inventory control system.

SBI has combined and utilised the concept of Retailer & Wholesaler Brand, these are goods

created by the retailer or wholesaler. They are exclusive to them and carry the store name. To

achieve this Perronne has been used as a supplier for a select set of product items, this has been

eclipsed however by the constraint of product runs of three product items in Hot Dogs, Bacon

and Chicken Chunks being done by a major competitor in Hanschell Inniss.

H. Jason & Jones

H. Jason Jones & Co. Limited, a division of the Kensington Court Group, is located in

Bridgetown with easy access to both the South and West coast regions of Barbados. With

origins dating back to the 1860s, the company has evolved through an extensive history in

import, export, manufacture and distribution in Barbados. They currently have two

divisions: Building Products (supplies and manufactures products for the private and

commercial construction sectors) Food Service (supplies specialty foods, beverages and systems


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to the hospitality and private sectors). The Food Service Division, which includes Meats,

Seafood and Customer Beverage Systems, is a prominent supplier to the hospitality industry

which encompass small hotels and restaurants to large all-inclusive resorts. The division has

also operates retail outlet and free delivery service to private homes and villas. Theirproduct

range includes, Douwe Egberts coffee, Sunshine & Vitality juice, Slush Products, Ruprecht

beef & steak cuts, French Fries, English cheddar cheese and butter products, Selection of

seafoods: Scottish smoked salmon, squid, mussels etc. Burgers and the list goes on.

H. Jason Jones & Co. Limited ensures that these quality products and services are backed by

exceptional customer service at all times. their product mix consists items bought from

Hanschell Inniss which are unbranded but are of the same quality as the Eve and Farmers

Choice Brands as they are made on the same product run by Hanschell Inniss.

The biggest seller for H. Jason Jones is their burgers, this product category consist of three

product items Beef Burgers, Chicken Burger and Jerk Burgers. Their Price is thought to be

competitive, and their distribution channels are catering to street vendors in St. Lawrence Gap,

Schools, Supermarkets and Restaurant.
http://www.hjasonjones.com/main/food.htmlhttp://www.hjasonjones.com/main/seafoods.htmlhttp://www.hjasonjones.com/main/seafoods.htmlhttp://www.hjasonjones.com/main/beverages.htmlhttp://www.hjasonjones.com/main/beverages.htmlhttp://www.hjasonjones.com/main/seafoods.htmlhttp://www.hjasonjones.com/main/seafoods.htmlhttp://www.hjasonjones.com/main/beverages.htmlhttp://www.hjasonjones.com/main/beverages.htmlhttp://www.hjasonjones.com/main/food.html


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5.0 Companys Portfolio Analysis Hanschell Inniss

5.1 Brand awareness Positioning & Market Share

Brand Awareness as stated before is defined as the level of brand recognition that consumers

have of a particular brand and its specific product category. It examines three levels ofrecognition: whether the brand name is top of mind when a consumer is questioned about a

particular product category; whether the brand name is one of several that come to mind when a

consumer is questioned about a particular product category; and whether or not a consumer has

heard of a particular brand name. Positioning is a process of developing a specific image for a

product, brand or group of products in the consumers mind relative to competition.Hanschell

Inniss was either unable or unwilling to share information on Brand Awareness and Positioning.

As such, a survey was also commissioned in an attempt to capture this aspect of the analysis and make

use of prevailing techniques to approximately reflect the awareness and perception of customers. The

semantic differential scale which asks a person to rate a product, brand, or company based upon a seven-

point rating scale that has two bi-polar adjectives at each end and the dichotomous question is generally a

"yes/no" question. These simple questions seek to measure the results in one instance and establish

consciousness of the brand.

Further investigations revealed that people made decisions on which brand of frozen food to buy

based on personal information cues, where price was not often the motivator for qualified buyers

to purchase. Most of the consumers interviewed and surveyed, identified underpinning brand

awareness and perceived product knowledge of the Farmers Choice brand. They were observed

to be motivated to buy, and willing to seek out quality, value and service from either previous

experience or the perception of what a good breakfast experience meant to them. There were

eight features established to be of importance to the customer when assessing the Farmers

Choice brand. From these eight characteristics there were six key buying criteria highlighted tosatisfy the buyers needs and wants:

Performance

Reliability

Conformance


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Safety

Aesthetic

The report evaluated that these five considerations were part of the consumer buying process,

and concluded that the customers own expectation, prior experience and brand perception were

the driving factors in defining value for money and ultimately the decision process rather than

price.

Historically, the top three brands in a product category occupy market share in a ratio of 4:2:1.

That is, the number one brand has twice the market share of number two, which has twice the

market share of number three. Ries and Trout argue that the success of a brand is not due to the

high level of marketing acumen of the company itself, but rather, it is due to the fact that the

company was first in the product category. Farmers Choice has the enviable advantage of this

market assessment when competing.

Similarly, SBI and H Jason Jones have struggled to compete with Hanschell Inniss in the frozen

food market. These examples support the point that the success of a brand usually is due to its

being first in the market rather than the marketing abilities of the company. The power of the

company comes from the power of its brand, not the other way around.

With this point in mind, there are certain things that a market leader should do to maintain the

leadership position; Farmers Choice has achieved this by not boasting about being number one.

If a firm does so, then customers will think that the firm is insecure in its position if it must

reinforce it by saying so; Farmers Choice has not fallen into this trap. Another strategy that a

leader can follow to maintain its position is the multibrand strategy. This strategy is to introduce

multiple brands rather than changing existing ones that hold leadership positions. It often is

easier and cheaper to introduce a new brand rather than change the positioning of an existing

brand. This strategy called a single-position strategy because each brand occupies a single,

unchanging position in the mind of the consumer. Farmers Choice has maintained this by

introducing new products in the beef burger line by way of veggie and smaller packaging in this

category.


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Finally, change is inevitable and a leader must be willing to embrace change rather than resist it.

When new technology opens the possibility of a new market that may threaten the existing one, a

successful firm should consider entering the new market so that it will have the first-mover

advantage in it. For example, in the past century the New York Central Railroad lost its

leadership as air travel became possible. The company might have been able to maintain its

leadership position had it used its resources to form an airline division.


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5.2 Contribution Information and current strategy

Historically, Barbados has been a stable market for frozen food products. Farmers Choice is a

strong competitor in the wieners, chicken chunks, bacon and slice meat sectors. Recently,

however, there has been a declining growth rate in frozen meats and positive growth rate in

substitute. In 2009, the frozen food meat market was composed of 18% weiners, 14% chicken

chunks, 21% bacon and 2% slice meat.

Farmers Choice currently has the opportunity to expand its product line to vegetables, pizza, or

breakfast compliments. It is important that the decision will add consumer value. Previously, the

package sizes for Farmers Choice products have been larger than those of leading competitors,

providing more customer value. The customers perception of the product is the primary

promotional focus in this industry. Farmers Choice has been successful in providing a qualityproduct to existing consumers. The companys overall strategy must focus on higher levels of

profitability to ensure that investments made today will result in market growth. The brand

Farmers Choice currently has 74% consumer recognition. Because of this, the company is in a

unique position to expand its product line. The decisions made in the short term, involves a

degree of risk. The assessment made by this analysis indicates four criteria, critical to

determining a sound current growth strategy for Farmers Choice. These are; consumer value,

profit potential, market growth and lowest level of perceived risk. The analysis of each criteria

concerning growth strategies for pizza, vegetables and breakfast items, determined that frozen

vegetables market expansion is the most favorable strategy.


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5.3 Company Strengths & Weaknesses

Competitive strengths and weaknesses is a concept that seeks to deal with two fundamentals that

are as a result of direct action taken by the company. Hanschell Inniss strengths are examined in

three areas namely the established manufacturing plant, established local and export market andestablished Brands. The weaknesses are measured in the areas of limited distribution freezer

space, competing internal brands.

HIPAC as it is known is owned by the Goddard Group and is responsible for supplying

Hanschell Inniss with the Farmers Choice Brand. The plant is both HASAP and ISO 9001

certified utilizing cutting edge health and hygiene practices. HIPAC is the only meat processors

on the island giving Hanschell Inniss the leverage to negotiate the best prices for raw materials.

The export market for HIPAC through the production of Farmers Choice has allowed for

expansion regionally, this allows the analysis of other markets, which are more uncertain than

the local market; it therefore allows a unique perspective in analysis and therefore an advantage.

The Farmers Choice Brand is seen as a quality brand, it is about 30 years of age and was

established in an attempt to position a high-end quality product. Through advertising the brand is

a household name and a valued brand for Hanschell Inniss.

In marketing, cannibalization is the decreased demand for an existing product that occurs when

its vendor releases a new and similar product. For example, when Hewlett-Packard puts out a

new printer, they realize that older printers will suffer some erosion of sales or market share; that

erosion is referred to as cannibalization. Farmers Choice sees competition from a sister-brand,

Eve and to date has done very well, this however has implications for Farmers Choice going

forward in a maturing market. The fact is clear, the medium which is used to store the brands is

at a premium, Hanschell has made the decision to carry a number of competing brands which

would have to share market space as well as display space this has resulted in the seeding of

space to brands on a rotational basis in order to maintain visibility of all the brands. Investment

in plant has been an asset and liability, the inability to secure major distribution channels would

limit the ability of the company to penetrate effectively in shopping areas owned by a competing

brand. This is compensated by an attempt to have distribution go into rural areas using vans; this

is however a very competitive networking system as the competitors has this channel well

populated.


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5.4 Product Assessment Using BCG Matrix

The Boston Consulting Group (BCG) Matrix

Independent products of an organization make up what is called a product portfolio, the firm's

products, Farmers choice bacon, wieners, burgers, chicken chunks, and slice ham compete in

different markets, a separate strategy often must be developed for each product. The Boston

Consulting Group (BCG) Matrix is designed specifically to enhance a firm's efforts to formulate

strategies.

The BCG Matrix graphically portrays differences among products in terms of relative market

share position and industry growth rate. The BCG Matrix allows an organization to manage its

portfolio of products by examining the relative market share position and the industry growth

rate of each product relative to all other products in the organization. Relative market share

position is defined as the ratio of a product's own market share in a particular industry to the

market share held by the largest rival firm in that industry.

Relative market share position is given on the x-axis of the BCGMatrix. The midpoint on the

x-axis usually is set at .50, corresponding to a product that has half the market share of the

leading firm in the industry. The y-axis represents the industry growth rate in sales, measured in

percentage terms. The growth rate percentages on the y-axis could range from -20 to +20

percent, with 0.0 being the midpoint. These numerical ranges on the x- and y- axes often are

used, but other numerical values could be established as deemed appropriate for particular

products.

The size of the circle corresponds to the proportion of revenue generated by that product unit,

and the pie slice indicates the proportion of profits generated by that product. Products located in

Quadrant I of the BCG Matrix are called Question Marks, those located in Quadrant II are called

Stars, those located in Quadrant III are called Cash Cows, and those products located in

Quadrant IV are called Dogs.

Question Marks-Products in Quadrant I have a low relative market share position, yet

compete in a high-growth industry. Generally these products' cash needs are high and their

cash generation is low. These productss are called Question Marks because the


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organization must decide whether to strengthen them by pursuing an intensive strategy

(market penetration, market development, or product development) or to sell them.

Stars,-Quadrant II businesses (often called Stars) represent the product's best long-run

opportunities for growth and profitability. Products with a high relative market share and a

high industry growth rate should receive substantial investment to maintain or strengthen

their dominant positions. Forward, backward, and horizontal integration; market

penetration; market development; product development; and joint ventures are appropriate

strategies for these products to consider.

Cash Cows - products positioned in Quadrant III havea high relative market share position

but compete in a low-growth industry. Called Cash Cows because they generate cash in

excess of their needs, they often are milked. Many of today's Cash Cows were yesterday's

Stars. Cash Cow products should be managed to maintain their strong position for as long

as possible. Product development or concentric diversification may be attractive strategies

for strong Cash Cows. However, as a Cash Cow products becomes weak, divestiture can

become more appropriate.

Dogs - Quadrant IV products of the organization have a low relative market share position

and compete in a slow- or no-market-growth industry; they are Dogs in the product's

portfolio. Because of their weak internal and external position, these products often are

liquidated, divested, or trimmed down through retrenchment. When a product first becomes

a Dog, divesture can be the best strategy to pursue.

The major benefit of the BCG Matrix is that it draws attention to the cash flow, investment

characteristics, and needs of an organization's various products. The products of many firms

evolve over time: Dogs become Question Marks, Question Marks become Stars, Stars become

Cash Cows, and Cash Cows become Dogs in an ongoing counterclockwise motion. Less

frequently, Stars become Question Marks, Question Marks become Dogs, Dogs become Cash

Cows, and Cash Cows become Stars (in a clockwise motion)


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FIGURE 6-7 The BCG Matrix

RELATIVE MARKET SHAREPOSITION

High Medium

Low1.0 0.50

0.0High

I G +20N R STARSQUESTION MARKSD O IIIU WS TT HR MediumY R 0

AS TA E

L CASH COWSDOGSE (%) IIIIVS Low


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6.0 Strategy Development and Rationale

Strategy development and rationale attempts to consider the internal and external environment in

an effort to charter a clear and unobstructed path, to the set of objectives; both environments will

be subsected and the rationale shared to explain the reasoning. The subset of the internal

environment is the four Ps and the target market and positioning. Initial primary data has

established no clearly defined target market. The demographics of age and gender were

represented with no clear concentration to indicate segmentation and therefore a target market,

this approach has served Farmers Choice well. A clear advantage can be seen by way of

advertising costs which can be spread over a larger market hence reducing overall costs.

Analysis has shown that price is not a major consideration in selection; this is due in part by

Farmers Choice brand offering larger brand items allowing for depth to the product line. Thisprocess allows two things to occur, customers purchase in bulk or larger size and still have the

option of purchasing regular. Price observation has shown that allowing for as much as .35

differences this is not seen as a hindrance to purchase. The strategy going forward would be to

maintain the present pricing arrangement, while at the same time keeping an eye on the

competition for any movement in price.

The product, identified as a fundamental to the explanation of the marketing strategy, has served

Farmers Choice brand well. Assessed against competing brands it is holding adequate marketshare. It has been observed that SBI has retreated in the production of hamburgers and H Jason

Jones lacks the brand item selection to threaten by way of new product development.

Consideration at this time should be to improve on product especially given the response of the

survey to convenience, although agreed this is an accurate assessment there is a feeling that

effort should be put in having packaging for bacon, wieners and slice ham that allows for easy

perforated entry. The strategy of product improvement by way of packaging could allow

improved market share but is not a certainty.

Placement or distribution has been seen as an opportunity for improvement, Hanschell Inniss

does not have at its disposal the distribution network as compared to SBI where the Super Center

Marts are able to carry the Home line and afford best shopping position in the display freezers.

Hanschell Inniss has within its portfolio the Eve brand which has proven to a sustained

competitor and often compromise must be meeting in order to allow these competing brands an


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opportunity to occupy space in the limited freezer spaces. There is a need to establish more

depots in the village and town centers, this would afford the control of the limited freezer space,

eliminating the retailer thus being able to offer best price.

It is recommended that Farmers Choice penetrate the frozen vegetable market, this decision

should help the product line expand and increase sales. The market growth for vegetables is

currently strong and is expected to increase with consumers demand for healthy foods.

Marketing frozen vegetables also increases Farmers Choice consumer base; traditionally the

company has not targeted a specific group, now it is possible to extend its products to

vegetarians.

In order for Farmers Choice to enter into the frozen vegetables market, it will have to first create

a business analysis with a concept evaluation; the managers need to develop a plan for this new

product. Within the plan, the company needs to forecast revenues, identify the size of the market

and define top competitors. It is important to identify the consumer trends and develop a strategy

to satisfy unmet consumer needs. This plan needs to be creative and different than the existing

product strategies. Once these concerns have been met, it will be necessary to evaluate the plan.

Pending the approval of the plan, Farmers Choice should establish a strategic alliance with an

existing frozen vegetable manufacturer.

Currently, the company only has the capacity to produce frozen meats because the procurement

of vegetable processing technology would be expensive. It is recommended that the company

utilize a strategic alliance reducing the time required to penetrate the market and also acquire

skills and technologies to drive the company forward. The Republic of Guyana is seen as a

viable location for this type of investment, in this way the company can increase its profits

without a significant amount of risk.

A quality marketing strategy will be evaluated throughout the new product development process.

Farmers Choice should examine a segment; women aged 24 to 45 to target. With the new

vegetable product, Farmers Choice would then make a decision whether or not to stay with the

current target market or to enter into a new one. It is recommended that staying with the current

target market will be advantageous; however, market research will still be required. Vegetables

can be positioned as a healthy addition to the consumers meal; an advertising campaign will


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need to be developed to support this concept to build brand awareness and personality associated

with the new product line.

Once the product is fully developed, Farmers Choice should test it to measure buyer response

and further evaluate and develop its positioning strategy. The use of conventional test marketing

would result in placing the product, in actual market conditions, in test locations on the island.

Product sampling will also be required; it should be conducted in retail stores or other locations,

based on consumer demographics and concentration. The test markets need to be a representative

sample of the target market.

In order to launch this new product line, Farmers Choice will use intense distribution. Multiple

channels of distribution will guarantee wide spread availability of the new line; all marketing

activities will be coordinated. The campaign will also require a distribution of coupons and in

store sampling to create consumer desire to test the new product. After implementation, a

thorough evaluation will be conducted to determine the project success. If the vegetable product

line is a success in Barbados, it too will be able to penetrate the U.S. and U.K. markets.

The environment in which purchases are made are constantly changing, it is therefore important

to examine the new features of the purchasing climate as the features may pose threats or create

opportunities for the company. The companys environment includes cultural, social, situational,

technological, and economic environments as well as the natural environment which

encompasses demographics, heredity and home environment, family life and life-changing

events.

Clow and Baack states there are many demographic variables such as age, gender, income level,

race, and geographical area that distinguish buyer types, and that companies create products to

meet the need of individual demographic segments. For instance men and women purchase

differently, that is they may buy similar products for different reasons or with alternate features.

Women in this market may make more frequent purchases than men, and may make up the

majority of the market, as they buy breakfast items while doing the general shopping for their

families. However the products appeal may be more suited to children as they are the primary

users of the products, therefore the ideal market for the product mix would be women with

children.


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Cultural factors also bring to bear extensive and profound influence on consumer behavior hence

the way in which the buyers culture, subculture and social class affects the consumers buyer

behavior must be understood. If the organization fails to adjust to the differences or changes in

buyer behavior it can result in mistakes and ineffective marketing. Buying decisions can be

impacted by the different cultures and sub-cultures, as such, the influx of the different

nationalities in the Barbados society must be taken into consideration and their consumption

habits should be determined. The societys basic values have also changed moving towards a

healthy life style, hence persons are tending to eat healthier, and see their bodies as a product of

what they eat. They are turning more and more towards soya based products, meats low in fat

and foods which will be low in calories. Hence the product for Hanschell Inniss must evolve,

providing the target audience with healthier foods, with leaner cuts.

According to Kotler and Armstrong business buyers are influenced heavily by factors in the

current and expected economic environment, as the imbalance in the economy rises buyers will

cut back on the amount of product they buy thereby reducing their inventories, hence reducing

the revenue that would otherwise be available. It can be argued that persons still have to eat so

the market should be able to hold its own, however the market is saturated with a number of

complimentary as well as substitute goods that can be viewed by the wholesaler, retailer and the

household as more affordable. These are products such as Gran-burger which is also competing

in the market and is a healthy choice solution.

The technological environment also can influence the business buyers as well as the consumer

buyers and can also prove to be a threat or an opportunity to the company, companies use of the

internet and other technological advancements can bring the product into the international arena,

Hence Hanschell Inniss use of the internet www.hanschellinnissltd.com and H Jason Jones

website www.hjasonjones.comhighlights the product mix of the companies, they are interactive

and introduces the customer to the variety of products they have to offer.
http://www.hanschellinnissltd.com/http://www.hjasonjones.com/http://www.hjasonjones.com/http://www.hanschellinnissltd.com/http://www.hjasonjones.com/


26/33

7.0 Appendix

Survey Questions

S.B.I Distributions Sampling Information

Farmers Choice Sampling Information

H Jason Jones Sampling Information

H Jason Jones Price List

SBI Distributors Inc. Price List


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Survey Questions

Are you aware of the refrigerated _____________ brand?

Yes

No

Have you purchased the refrigerated ____________ brand?

Yes

No

Is the PERFORMANCE of the brand?

(7) Very Good

(6)

(5)

(4)

(3)

(2)

(1) Very Poor

Is the RELIABILITY of the brand?

(7) Very Good

(6)

(5)

(4)

(3)

(2)

(1) Very Poor


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Is the CONFORMANCE of the brand?

(7) Very Good

(6)

(5)

(4)

(3)

(2)

(1) Very Poor

Is the SAFETY of the brand?

(7) Very Good

(6)

(5)

(4)

(3)

(2)

(1) Very Poor

Is the AESTHETICS of the brand?

(7) Very Good

(6)

(5)

(4)

(3)

(2)

(1) Very Poor


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S.B.I Distributions Sampling Information

Person

1

Person

2

Person

3

Person

4

Person

5

Total

Average

2 5 5 4 6

3 5 5 4 6

2 5 6 4 7

5 6 6 5 7

7 6 5 5 7

Total 19 27 27 22 33

Average 3.8 5.4 5.4 4.4 6.6 25.6

Table 1

Brand Awareness is equal to total Average divided by total number of persons polled thereforeBrand Awareness is 2.56

Age Range Male Female10-19 x

20-29 xx x

30-49 xx x

40-49 x

50+ x x

Table 2


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Farmers Choice Sampling Information

Person

1

Person

2

Person

3

Person

4

Person

5

Person

6

Person

7

Person

8

Person

9

Total

Average

4 6 5 5 4 6 6 5 5

5 6 5 5 4 6 5 5 46 7 6 5 5 7 6 6 6

7 7 4 6 6 6 6 6 5

9 7 5 6 6 6 6 6 5

Total 31 33 25 27 25 31 29 28 25

Average 6.2 6.6 5 5.4 5 6.2 5.8 5.6 5 50.8

Table 3

Brand Awareness is equal to total Average divided by total number of persons polled therefore Brand Awareness is

5.0

Age Range Male Female

10-19 X X

20-49 X

30-49 XX XX

40-49 XX

50+ X X

Table 4


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H Jason Jones Sampling Information

Person

1

Person

2

Person

3

Person

4

Person

5

Person

6

Total

Average

3 4 5 3 4 3

4 4 5 5 4 43 5 4 3 5 3

6 3 4 3 3 5

4 5 4 5 4 5

Total 20 21 22 19 20 20

Average 4 4.4 4.2 3.8 4 4 24.4

Brand Awareness is equal to total Average divided by total number of persons polled

therefore Brand Awareness is 2.4

Age Range Male Female

10-19 X X

20-49 X X

30-49 X X

40-49 X X

50+ X X

Table 4


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Market Share Analysis

CompanyFreezerSpace HOME

Farmer'sChoice Jason Jones

Carlton A1 Supermarket 113400 10800 37800 2700

Jordan's Supermarket 172800 14400 43200 3600

Trimart Supermarket 405000 40500 243000 20250SuperCentre WarrensSupermarket 729000 81000 243000 27000

Total 1420200 146700 567000 53550

Market Share 10% 40% 4%Table 5

The hypothesis is to equate market share to a premium constant being freezer space. Hold the market

constant and isolate market share to the four supermarkets shown. Total freezer space is then calculated

and the percentage of each competing brand, the result being equated to market share.


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8.0 Bibliography

Philip Kotler, Gary Armstrong (2004). Principles of marketing, Pearson: Prentice Hall.

Tony Yeshin (1998). Integrated marketing communications, Butterworth Heinemann.

Ian Swift (200). Marketing An analytical and evaluative approach to business studies,

Hodder & Stoughton.

Clow & Baack (2004), Integrated Advertising, Promotion, and Marketing

Communications, Pearson: Prentice Hall.

http://www.hanschellinnissltd.com

http://www.hjasonjones.com/main/index.html
http://www.hanschellinnissltd.com/http://www.hjasonjones.com/main/index.htmlhttp://www.hanschellinnissltd.com/http://www.hjasonjones.com/main/index.html

product development analysis

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