Marketing Plan: HillShire Farms

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Blum, Lee, Mai, and Neels 19

Table of ContentsExecutive SummaryIntroduction.1Chapter One: Who We Are.2Chapter Two: Environment and Product Evaluation.7Chapter Three: Consumers and Target Markets.15Chapter Four: Product.24Chapter Five: Price.29Chapter Six: Place.34Chapter Seven: Promotion.37Chapter Eight: Final Thoughts.40References.45

Executive Summary:Hillshire Farm is about quality, its about the family coming together after a long day of work to a table full of their favorite food. They need to go back to the beginning, to where it all started. They need to abide by the fact that their farm door is always open, and do this by becoming a more transparent company. Hillshire Farm is for the family. Not just the ones that purchase Hillshireproducts, but the ones who come to work for them every day. The company's focus going forward is on creating a family culture within the workplace. The ethical treatment of workers will be the top priority of the Hillshire Farm from this point on.The new Fresh & Fit line will provide a new experience for the health-conscious family. Hillshire Farm crafts nothing but the best, the way in which they provide their products should reflect that. That is why they are going to further their relationship with Target and foster a new one with Jimmy Johns. These companies not only cater to our target market, but they do it in a meaningful way.The best way to start providing consumers with the best experience with Hillshire Farm is to provide them with a website that fosters communication and openness. The current website does not fulfill its main purpose, which is to give the consumer any information that they may need both before and after a purchase is made. The website will have the same, country-style theme that can always be associated with Hillshire Farm, while providing an entire experience for the customer from the minute they enter the site.By investing more heavily in social media marketing, the company can reach its target market; Kids & Cul-de-Sacs and New Homesteaders more effectively. Both of these groups react more to social media, rather than the traditional television advertisement. These target markets are a look into the future of Hillshire Farm. If the company is able to market through social media effectively now, it will solidify their place in the meat industry for many years to come. Hillshire Farm will be a pioneer of the industry in how it markets itself to consumers. Much like their domestic market, Hillshire Farms largest international target market is upper middle class. Especially, keeping in mind, a huge trend of growth in the mobile market in Asia, the company will be able to firmly position its brand through the application platform. The tremendous potential growth in the Asian market is unmatched anywhere else. Establishing themselves in this market is the future of Hillshire Farm, and the meat industry as a whole.

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Introduction:Hillshire Farms is a leading company in the beef industry, which currently operates under the parent company, Tyson Foods, Inc. since their acquisition of Hillshire Farms in 2014. Hillshire operates under the slogan, The Farm. The Food. The Craft. which speaks to companys value proposition of producing high-quality meat for consumption to customers at an affordable price (Our Story). The brand audience includes a wide variety of actual and potential consumers, however their company branding is targeted specifically to reach upper-middle income individuals and families. Increased regulatory standards to ensure product quality and growing pressure for transparency in production are forcing companies in the meat industry to rethink their tactics to appeal to younger audiences who are more concerned with the production process than their older counterparts (Curtin). Younger consumers are concerned about the ethical treatment of animals and humans, the environmental impact of their food, as well as the nutritional value of the products they consume. The trends of protein-packed meals are aiding the industry as they attempt to market meat products as a healthy option for families (Allen). However, the growing concern over red meat consumption and the chemical processing materials that are used in meat production are leading causing more families to consider limiting their meat consumption or eliminating their consumption altogether (Crawford). Hillshire seeks to capture the benefits of meat for those families who wish to consume the products without the worries of sickness or poor quality ingredients. The meat industry has been a critical part of the commodity system for a long time. Since the early part of the twentieth century the industry of meat has become controlled by a few large companies, including their parent company, Tyson Foods Inc., which controls 25% of the entire market (Tyson Fact Book). As an industry, the European and US markets are certainly more mature than the growing Latin American and Asian meat markets, an area where Hillshire can eventually experience growth and is a market that the company could eventually penetrate (TSN - Tyson, Inc.). Jumps in the sales of meat are typically due to consumer preference shifts during economic shifts. During difficult financial times, consumers swap one type of meat for another, and the parent brand of Hillshire Farms, Tyson Inc., has minimized risk by offering differentiated products within the meat industry (TSN - Tyson, Inc.). Recently, consumers have begun to demand chemical-free meat, and are more concerned with the ethical treatment of animals and meat plant workers. Due to the anti-GMO and anti-chemical craze that is currently popular in the US and other developed countries, consumers care more than ever about how their meat was produced (Crawford). With the lifestyle shift to constant business, consumers are always looking for convenience, and have shown preference to products that can be safely and quickly prepared. The industry needs to shift to an attitude of transparency in the meat process and continually develop innovative products to improve the safety of meat and the sustainability of production.

CHAPTER ONE

Company Mission, Vision, and Objectives:Hillshire falters in their development of a clear, accessible mission and vision for their company. With simple taglines and a short, unclear letter that is difficult to find and inconclusive, the development of a clear mission and vision for the company needs modernization. Thus, a new mission statement and vision statement were developed that encompass the goals and objectives Hillshire Farms should have in order to become an industry leader. With this came the slogan, Producing farm fresh food with families in mind, followed by a breakdown of the key points within the slogan.

For the vision statement for the company, as a continuation of the mission statement above, a revision of the letter currently found on the website would contain their statement of purpose and elaborate on Hillshire Farms purpose and goals for long term success and market leadership.In the interest of future profitability, Hillshire Farms would do best through making several short and long term restructuring decisions. By becoming an industry trailblazer in ethical concerns and clean production processes, Hillshire could differentiate itself from other meat producers, and the long-term vision for the company encompasses that mission. These values that are incorporated with this version of the vision statement reflect the direction that Hillshire Farms could take in order to capture a larger market share in the long run.After a website and financial analysis, there are several areas where Hillshire Farms is able to improve their current financial and branding situation. These company objectives are designed to improve the companys current areas of weakness both fiscally and with regards to societal responsibility. Non-Financial Goals:

1) Redesign their website to contain useful information about where each product lines are obtained and how they are produced within three months.

2) Institute a mission statement for and make it publicly visible on all marketing materials within one month.

3) Overhaul and differentiate the More Nutritious line to penetrate further into the selected target markets within five years.

Financial Goals:

1) Increase the total return on assets to 2.0 or greater within the next five years to make it competitive for the industry.

2) Reduce equity multiplier to 2.0 by reducing company liabilities in the next five years, creating less financial risk.

3) Continue to lead the industry in Dividend yield over the next five years.(Dividend yield - Industry: 1.0% versus Hillshire: 1.13%)

(For reference regarding financial goals please see Appendix A).Sustainability Assessment:In the last several decades, the principle of creating business processes without causing harm to the environment is the essential concern for most companies, including Hillshire Farms. Hillshire Farms has made incremental changes with regards to reducing waste; however there are certainly larger production changes that need to occur for Hillshire Farms to remain a relevant brand to younger target markets. The company has attempted to mitigate the impact of its manufacturing process to produce a clean product while reducing waste. Hillshire Farms facilities look for ways to reduce the water and energy usage as well as the material waste used for feeding livestock through the meat production (Chrisman). In particular, the company also applied environmental sustainability principles into the construction of their new corporate headquarters building in Chicago, and gained Leadership in Energy and Environmental Design (LEED) certification for their building design (At Hillshire Brands). Moreover, their parent company, Tyson Foods, Inc. has introduced new packaging reducing the size of boxes during the meat transporting, which eliminates at least 211 truckloads annually. Hillshire Farms makes incremental changes with lunch meat product packaging which uses reusable polypropylene containers (Heather). This reduces the large amount of plastic waste through purchasing a reusable product (Why RE-USE?).These changes are small efforts to reduce overall waste are marginally effective; however they do not adequately address the serious environmental issues created by Hillshire Farms meat production and manufacturing process. While moving towards environmental sustainability, the company must consider the process of the meat production, and the incorporation of technology to improve the efficiency of this process in order to move forward in the industry in the long run.In the Societal Classification of Products, Hillshire Farms typically produces pleasing products, as the products gain high immediate satisfaction with their consumers for their meat quality and taste, the convenience of their lunch meat and ready-to-eat sausage products; however they may not satisfy the long-run consumer needs as many of these products are not necessarily healthy for consumers in the long run. There are also health concerns for consumers in the long run as the pollution influences society and can cause negative health effects (Armstrong, Kotler 515) In the external analysis, Hillshire Farms competitors are also in the same position in mitigating the environmental impact of their manufacturing processes as well as caring about the societal factors. For example, before having a merger with Hillshire Farms, since 2004, Tyson has cut the water consumption by about 11 percent (Heather).Tyson also set up the waste reduction processes at some of the pork plants in 2013 to save in the electricity usage, the emission of CO2 and water waste. (Tyson 2013 Sustainability Report). Competitors have attempted small, incremental changes with regards to their environmental impact, but as with Hillshire Farms, their competitors have yet to implement any large changes to counteract the negative impact they currently have on the environment.

CHAPTER 2

Macroanalysis:Demographic ForcesThere are several demographic factors that will affect Hillshire Farms and their branding strategy. One threat is veganism becoming trendy with young adults as it creates the notion that all meat is inherently unhealthy and inhumane to a key target market. With increased literature on the toxins that could be present in some meat, young men and women are less likely to eat meat themselves, or purchase it for their young children (Crawford). However, there are other demographic trends that create opportunities for Hillshire Farms. One of the largest segments within Hillshire Farms targets young and developing families. The trend of families looking to snack more, but snack on healthier, protein-saturated food is shaping how their children make food choices. Families are beginning to involve their children more in the food selection process, but are also more likely to teach their children about nutrition, and choosing healthy food options. Thus, if Hillshire Farms can successfully create products that are healthy to meet the standards of those families, they are also creating a market for the next generation of children, as those children would grow up eating those products and likely mature into consumers themselves. (Fromm).Another important trend involves Millennial Moms (mothers who are in their mid to late twenties), who are more connected than any other adult age demographic to media and mobile devices. They have latched onto the foodie trend; they are more likely to buy products that are featured in online cooking videos and are likely to search and follow online video recipes (Ray). This creates potential to expand upon Hillshire Farms currently available online recipes and produce media that could effectively target this market.

Societal and Cultural Forces

Shifts in society and culture have a large impact on consumer behavior, and meat consumption is no exception to that statement. Protein, which is traditionally a hallmark characteristic of meat, is becoming a sought-after product across demographics as young children and older generations alike whom are drawn to the idea of losing weight and gaining muscle by adding a nutrient, as opposed to other diets that are nutrient-restrictive. (Allen). With more consumers looking to meat as a source of protein, this provides Hillshire Farms with a clear consumer desire in numerous markets, which will boost sales in the industry as a whole. Consumers are also looking for more organic, environmentally friendly, and local food options. They are more likely to select food based upon the production of the food more than ever before. Hillshire Farms could view this trend as an opportunity to market a sustainable line of meat to consumers. ("Technology, Lifestyle Food Choices Evolving Trends for 2015"). With regards to Hillshire Farms specific target market, Millennials are becoming increasingly concerned with the ethical treatment of workers and the organizations and causes a company supports. They continue to care fiercely about the treatment of workers and animals, oftentimes ahead of the product itself. This could be a problem for the meat industry, which has been trying to quiet claims of unethical worker treatment in plants for more than a decade. (Curtin).

Economic Forces

Several factors have shifted meat consumption and branding within the industry. One note is that meat is cheaper in American markets as compared to foreign markets. The foreign market for meat is significantly different than the domestic meat market in regards to brand strategy, which can be an advantage for Hillshire Farms if they are able to make modifications to their strategy to account for the market differences. With regard to specific meat products, chicken has grown in market share with the associated health benefits and cheaper price tag, which can also be an advantage if Hillshire Farms chooses to capitalize on this information and use it in the consideration of their branding strategy. When the market is down or when dealing with lower or middle income markets, meat consumption dips in times of economic hardship, which can be a threat to the meat industry as a whole. (Charles). Investment into the poultry field is also gaining traction as a solution to feeding hungry masses as an efficient source of protein; current experimentation with technology that could produce more meat and superior meat using fewer resources is coming into the meat market. With this knowledge, Hillshire Farms could take advantage of this opportunity to capitalize on new technological advances and health trends through expansion of their poultry options beyond a few lunchmeat options. (Bunge).Pressure to provide safe meat with outbreaks of illness has caused companies to be more willing to go through the regulatory process as when press releases of illness arise, entire companies can be destroyed. The public has proved to take away large amounts of buying power over a single mistake, and their lack of forgiveness could decimate any meat producer that skimps on safety, including Hillshire Farms. ("USDA ERS - Market Incentives & Government Regulation: Meat & Poultry"). Thus, they must be especially cautious in their safety regulations in order to ensure that they do not lose the brand association of safety that they currently enjoy.

Technological Forces

As mentioned previously, investment into the poultry field is gaining traction as a solution to feeding hungry masses as an efficient protein source, as investment in technologies that could produce more meat and superior meat using fewer resources soars (Greenaway).With regards to production technology, larger firms are usually the only ones able to purchase the best technology to regulate food safety. Much of the cutting-edge technology can be cost-prohibitive equipment can cost up to a million dollars apiece, making implementation for smaller firms difficult. This is an advantage for Hillshire Farms, as they are a larger corporation that would be able to differentiate themselves from other boutique meat firms because they can afford the best equipment. ("USDA ERS - Market Incentives & Government Regulation: Meat & Poultry"). Another technological development is being used to cause more rain to fall in areas of severe drought, dramatically aiding farmers when they need the rain to allow crops to survive (Chang). This kind of technology would be especially useful as it could drive livestock feed costs down in years of scarcity, lowering a huge supply cost. It also considerably affects the availability of feed when currently about 2/3rds of farmland is currently used within the US to grow livestock feed (Climate Change: Why Meat is a Bigger Threat Than Cars). If this technology is harnessed and fully developed, it could be a monumental opportunity for companies like Hillshire Farms that rely heavily on farmland as a food supply for their livestock.

Natural Forces

Many environmental and natural changes and consumers increased awareness of those changes affect meat purchase and consumption behavior. The environmental effects of meat production are gaining greater publicity as more consumers are becoming aware of how much land and freshwater is needed to produce meat, particularly red meat.("Climate Change: Why Meat Is a Bigger Threat than Cars"). As consumers become aware of the effects that meat production has on the environment and how much water is wasted in the meat production process, it could easily cause more negative media coverage on the meat industry, creating a barrier to higher sales and customer positioning.As mentioned previously, forces and natural causes such as droughts severely impact the cattle industry as the water missing in a drought is essential in pasture cultivation which is what cattle need to survive in many areas of farmland where cattle are treated humanely. These droughts increase the costs of supply for the entire industry, and can drive up the cost of production for Hillshire Farms beef products. (Leader).Recent global trends indicate a growing population that has to obtain the necessary nutrients using fewer resources. With this trend there is rapid growth in the poultry development industry as scientist try to work with changing environmental standards to provide for increasing populations. The burgeoning population will be looking to the meat industry as a source of food, particularly in Asian countries in the long run as they struggle to feed their growing populations. (Bunge). This is of interest to Hillshire Farms as they are currently attempting to enter the Asian market and are seeking new ways to create value in those markets.

Competitive Forces

Findings have indicated that larger scale production factories can be just as effective as smaller firms with regards to cleanliness and overall food safety indicating that smaller companies are not necessarily better in ensuring safety and compliance to regulations. This information could be used to market Hillshire Farms ability to scale up production to reduce overall costs in ways that competitors cannot, in order to ensure a quality product while keeping costs low ("USDA ERS - Market Incentives & Government Regulation: Meat & Poultry"). The meat industry is dominated by a few main corporations, including Tyson Inc., the parent company of Hillshire Farms. Recently, domestic legislation was struck down that would have broken up and regulated the current meat monopoly by those major companies (Laskawy). For now, the death of that regulation in Congress creates the continuation of opportunities for Hillshire Farms to grow free of government regulation. However, if this legislation were to resurface again on a national level it could threaten future corporate business practices and profitability. Due to the aforementioned oligarchy within the meat industry, larger companies have the ability to essentially dictate market price for poultry and other meat. This control even trickles down into the ability of larger firms to have the ability to dictate supply costs to some extent (Leonard). This is a continual industry opportunity as having control over supply costs within the industry places those companies at a significant advantage over their smaller competitors and creates a significant barrier to entry for new companies. Using their influence to dictate supply prices and product prices, Hillshire Farms could continue to hold its place and expand their market share among their few competitors within the industry.

Legal and Political Forces

Upon examination of the legal and political environment, there are several factors that threaten the profitability and brand strategy of Hillshire Farms. Recent media attention spotlights animal cruelty and emphasizes the importance of the ethical treatment of animals. Hillshire Farms and other industry competitors have been slow to react to these allegations and generally refuse to be transparent in their meat production process, which makes this attention a serious threat to the future profitability within the company and the industry holistically. Scandal in the media regarding alleged cruelty and increased awareness on animal treatment creates tension between officials and meat industries at they examine the ethical and legal implications of factory policies regarding animal cruelty and meat safety. (Madhani). Other material additionally explores how recent concerns over the treatment of meat production workers have raised ethical and legal questions. Increased attention on the employment and exploitation of illegal immigrants is a common theme that casts a negative view on the industry as a whole (Spangher). A report compiled by the US Government Accountability Office for the Minority House Leader found that the majority of the workers in the meat industry are young immigrant males in an industry with a high injury rate. It also noted that OSHA regulations were becoming more stringent to regulate the industrys ability to hide worker abuse, and made recommendations to increase the ability to regulate individual factories by assigning a unique identifier and looking at their ethical treatment of workers over time in order to select factories for inspection. (US Government Accountability Office). Any industry struggles under increased scrutiny of their practice, and the notion that this industry needs the regulation and cannot implement basic ethical principles without government intervention reflects poorly upon their public image. The parent company of Hillshire Farms, Tyson Foods, Inc., indicates that they contributed to the 10 percent of reduction in the OSHA Recordable Incident Rate since fiscal year 2013 (Sustainability at Tyson Foods). This statistic on their company website indicates that they are attempting to at least appear to be progressing in their view of ethical workplace standards. However, without major improvements and changes, the increased attention on worker safety and ethical employment conditions could prove to be a viable threat to Hillshire Farms.

Potential Stakeholders:

General Public: Ensure its public safety regarding environmental impact of production. The company must acknowledge its social responsibility about environmental sustainability. This issue arises from increasing emission of Methane emission from beef production, the excessive usage of freshwater, and the use of farmland to produce feed for livestock. The excessive methane emission has been connected with the exponentially furthering the greenhouse effect, and scarcity of farmland and freshwater are issues for ever-growing populations. ("Climate Change: Why Meat Is a Bigger Threat than Cars.").

Consumers: Provide safe products to consumers. Consumers prefer fresh products that are made with high standards of cleanliness to ensure safety (USDA ERS).

Employees: Providing a safe workforce for employees with fair compensation. A safe working condition should be ensured to its workers. According to the Government Accountability Office, the majority of meat industrys working conditions have a high injury rate. However the company should guarantee safe conditions for their worker by revising the current standards found in their factories.

Suppliers: Providing a fair price to farmers who hold high standards for livestock raising. Many farmers who choose to raise their livestock ethically currently cannot compete with larger, mass production suppliers that inhumanely produce their meat products (Leonard). Hillshire Farms must choose to support smaller suppliers if they want to comply with higher standards of corporate responsibility.

SWOT Analysis:

Internal Strengths:

Hillshire Farms has a large portfolio of well-known brands that have an immense, diverse customer base which they reach out to effectively. This creates high revenues for the company and will continue to sustain their business (Global Data). Hillshire Farms has operated under a parent company, Tyson Foods, since 2014. Tyson Foods is a meat industry leader with more than forty-one billion dollars in revenue. (TSN Income Statement). Having a successful parent company gives Hillshire Farms the financial stability to continue operation for many years to come.With the convenience factor that Hillshire provides, they are able to satisfy a growing customer demand for a healthy and hasty meal, without sacrificing product quality.

Internal Weaknesses: Hillshire lacks an accessible mission statement, and is necessary to have a framework to build off of for a company this large. Without a mission statement, it is difficult to prepare for the future and this shows a lack of forward thinking among the companys executives, which is essential with a company of this stature. Hillshire is not a transparent company regarding their production process. Since a large group of consumers, specifically millennials, are looking to the internet for their information, it is crucial that Hillshire adapts to that trend by putting more information online (Ray).Hillshire depended on Walmart for 25% of their revenue in 2012 (Global Data). Having one fourth of Hillshire reliant on one distributor is extremely risky. If Walmart were to pull out as distributor it would be difficult for Hillshire recover a large portion of lost profits.

External Opportunities:

Consumers are moving towards food that has been processed organically and in a manner that is environmentally friendly (Technology). Hillshire could capitalize on this by simply changing one aspect of their production. For example, if they were to change the packaging by making it more environmentally friendly, or produce a product line that is organic, they would develop a new market.There is a segment of younger, developed families that is an advantageous target market for Hillshire products to pursue. They want to snack, but in a more health-conscious way (Fromm). Hillshire needs to capitalize on this segment within the consumer meat market. Hillshire products are healthy and affordable, as well as quick to make as a snack or meal. Meat consumption varies directly with economic changes; when the market is down, meat consumption goes down. However, when the economy rebounds, meat consumption goes up due to people having more buying power. (Charles). Capitalizing on a strong economy will maximize company profits. Hillshire could market their cheaper products more when the economy is in a downturn in order to sustain net sales.

External Threats:

Theres a growing trend among millennials regarding their concern for the ethical treatment of workers a company employs (Curtin). This could harm not only Hillshire, but the meat industry as a whole. There is a growing amount consumers moving towards veganism (Crawford). This is a threat to Hillshire as it spreads the idea that meat products in general are unhealthy and inhumanely produced. This could cause a loss in current Hillshire customers.Pressure from consumers to produce meat free of toxins and food-borne illnesses have caused companies to increase their regulatory standards with regards to production in order to avoid bad press (USDA ERS...). The public has proved in the past that they can be detrimental to a company's livelihood if they feel that they were negligent during the production of a meat product (USDA ERS).

CHAPTER 3

Customer Analysis:

Primary Target Market:Upper-middle income, domestic families and individuals are more likely to buy Hillshire Farms products, and the primary target market for our products will be this group, particularly families. This rationale is derived from the idea that this market is more willing to pay for products that they perceive to be of a higher quality, and the target market of younger families is increasingly concerned with the production of their meat products. Currently, Hillshire Farms produces many different types of lunchmeats and sausage products, which appeal to this demographic because it is more expensive than chicken or lower-grade lunchmeat and considered more of a luxury good without the price of deli products. Hillshire Farms attracts a wide range of upper-middle income individuals and families who have the money to spend on sausage products and deli-style lunchmeats, whom are unwilling to splurge on deli meat each week.More individuals in the relevant demographic target market for Hillshire Farms have shown and stated that they increasingly care about the process of production for their products. Research has shown that this particular demographic is interested in how brands treat their workers and how their products are made. People are spending more time reading nutrition labels and looking to see how their products are produced. Many are less brand-loyal unless they see that a company is openly committed to treating their workers with respect and their production process is noticeably more transparent and environmentally conscious (Curtin). With regards to geographic distribution of income, a significant portion of Hillshire Farms target market income demographic is situated across the United States, including the western portion where Hillshire Farms currently has few offices (Nielson.com; Locations). This is an important note for the company as they could consider expansion into the Western portion of the United States to capture that customer market.With regards to parents within Hillshire Farms demographics, it is important to note that more families are involving their children in choosing foods for purchase. Increasingly, parents have begun to teach their children about nutritional value in foods and have involved them in the decision-making process. In teaching their children to look for the quality in the foods that they consume, the next generation of upper-middle income individuals will likely carry on the trends of seeking food that captures the taste they desire with the nutritional value they need.Technology is changing the way that younger families cook and consume meat products. Research has shown that families, particularly Millennial Moms are more likely to use cooking and recipe videos and follow food blogs. The same study also noted that these moms were far more likely to purchase products that were mentioned in food videos and blogs, and paid more attention to advertising on social media as opposed to ads on television or radio programs. Many of these families own multiple mobile devices and increasingly rely on them to meal plan for their families, and are far more receptive to product advertising through mobile media platforms. (Ray). Another interesting trend that was noted in research was the response of older millennials to different forms of marketing. Consumers interviewed for an article discussed their willingness to follow Instagram accounts for brands that provided beautiful pictures, such as Patagonias inspiring account that made consumers want to venture outdoors. However, the same group of consumers was often annoyed by television advertisements that advertised products in a traditional way. (Curtin). Our consumer is up to date on current events and trends. They are open to new ideas and products that will help them live a better life. They will fall in one of two categories based on the Diffusion of Innovations model (Armstrong). The first category is an early adapter. Our consumer is susceptible to new ideas, technologies and products that will allow them to live life in a healthier, more efficient way. The second category that our consumer falls into is early majority. Much like early adopters, they are open to new ideas, and are on the early side of a trend. These consumers are more than likely going to be in the older age group of our target market. The survey that was performed with the intent of providing further information on the market behavior and expectations of consumers proved inconclusive because it did not encompass our target demographic.Need RecognitionHillshire Farms satisfies a wide range of their target customers needs and wants in a variety of ways. This is shown in their production of goods that are seasonally popular, such as their smoked and summer sausages which are staples during summer and Christmas season, when entertaining is popular. Other products, such as their lunch meat, ham, and other sausage products are year-round favorites. Hillshire Farms also appeals to the consumers desire for convenience with their design of re-sealable containers for their lunchmeat line to keep the food inside fresh and easy to store. They also produce a line of frozen handheld sandwiches that are a convenient option for consumers who are constantly on-the-go. Their products are convenient, and affordable for busy middle-income families (Chrisman).Americans now consume an average of about five small meals per day, and many parents are looking to for convenient and healthy foods for themselves and their children. Hillshire Farms offers a range of meat products that are already prepared and safe to eat without having to worry about cooking, providing a viable option for parents who are willing to pay more for convenience and quality. With raw food the necessity of more time to prepare arises, as well as a greater risk of sickness if prepared incorrectly. The diverse product offerings of many favors and package sizes of sausages, hams, and nutrition-conscious products allow customers have more mealtime options. They also introduced the line of lunch meat called Hillshire Farms Naturals that contains no artificial ingredients, preservatives, colors or nitrates (Bullock). In general, lunchmeat is also a popular choice for students or workers to take to work for lunch as a source of midday protein (Ewert). Hillshire Farms creates products to meet the needs of those upper- and middle- income families and individuals who crave the taste of high quality meet, in a convenient form, at a reasonable price.Influential Factors

Social class, family and lifestyle all play a significant role as influences to those who will purchase Hillshire Farm products. Hillshires target market is mid to upper-middle class couples with children. This group can afford a higher quality meat product at a slightly more expensive price, however, the products are still affordable and convenient. The companys product line is an important influence on buyers. Having a high quality product gives customers the peace of mind that they are buying a product that is not only convenient, but healthy.Placement is another important influential factor. Considering the fact that Walmart is Hillshires largest customer, making up 25% of Hillshires total sales, we need to continue harvesting that relationship (Global Data). However, we also need our products to be in areas with retailers that cater more specifically to the upper-middle class. There are middle class communities all across the United States. However, Tyson, Hillshires parent company, has not taken advantage of the Western region of the United States by implementing food plants in that area (Locations). This is a large portion of the domestic market that is not being marketed to. If Hillshire were to market and sell their products in the Western region, their customer base would increase significantly.

Emotional Appeal and Value Proposition

Hillshire Farms provides quality meat products that are both affordable and convenient. We do this by providing superior products, for a healthy family.

Buyer Decision Process

The consumer buyer decision process starts with the recognition that they need a product for consumption, specifically, a meat product. Need recognition can occur at any point throughout the daily life of the potential customer.There would likely not be an information search done by the customer unless they are in search of how the meat is produced by different companies.The evaluation of alternatives is the next step. Since this is a meat product, they might decide relatively quickly as to which brand to buy unless they are brand loyal (in which case they would not likely take part in this step). However, there are some customers that evaluate all the alternatives and arrive at a final decision. These consumers are likely to take part in the information search as well. At the point of the purchase decision, two factors come into play. The first is the attitudes of others (Armstrong). A consumers friends, family and acquaintances are likely to influence their decision on what to buy. For example, if a family member did research into the meat industry and decided to stop eating non-organic meat products, the consumer may likely change their decision based on the assessment of the family member. Secondly, there are unexpected situational factors (Armstrong). These factors vary depending on many external forces. An example would be a change in the price of an item that the consumer, previously may have wanted, but due to the price change, decides against it. Next the consumer will determine whether or not their decision to buy a specific item was a good one. This depends solely on the consumers expectations of the product that they purchased (Armstrong). In this example, the consumer purchased a Hillshire product. They are delighted, satisfied, or disappointed with their purchase (Armstrong). Cognitive dissonance, although common, would not likely be a relevant factor after purchasing a Hillshire product. Because our target market is one that has disposable income, they would not be as likely to regret purchasing an item that is for every-day consumption.

International Considerations

Hillshire Farms parent company, Tyson Foods, Inc., is currently operating internationally. They have bases in more than one hundred and thirty nations, but their largest emerging market is in Southeast Asia, particularly in China and South Korea (T International Operations). While Hillshire Farms does not currently have products placed internationally, they have begun testing market profitability by placing their products in Koreatown in Los Angles, California (Lee).The popularity of foreign meat products has risen with increase in middle-class population from newly-emerging nations, such as in South Korea, where the consumption of meat and dairy products substantially increased (Kim). This creates opportunities for companies in the meat industry to capitalize on the new middle-class consumers. Tyson Foods, Inc. had already been expanding its international influence notably in two populous countries, China and India (International Operations). With influence from the parent company established in these major countries, it provides an opportunity for Hillshire Farms to eventually penetrate those international markets as well.Research supports that if Hillshire Farms moves into Southeastern Asian markets, they should target upper middle class consumers first in non-domestic markets (Lee). Hillshire Farms should let the international customer see the brand as a high quality and recognize it initially as a foreign luxury. After it is established as a luxurious brand, it will make it easier for the company to target a broader range of customers. Eventually, it becomes an affordable product to a broader range of foreign customers still recognized as a high-end meat product. One example of this strategy was found in the American luxury brand, Coach, as they entered the Asian market. From Coachs success, one can ascertain the importance of a brand to initially be recognized as a luxury. According to Angela Donald, an editor from Advertising Age,

The luxury sector has cooled in China, and show-off luxury items are now often seen as tacky. In that context, affordable luxury brands are well-positioned, and Coach has benefited. Coach is hurting in North America, with same-store sales down 23% in the most recent quarter. In China, sales were up a solid 8%.By positioning their meat products first as a luxury that is eventually seen as an affordable luxury, Hillshire Farms would be able to capture an untapped Asian market with their meat products.Tyson is already shown intent to target upper middle class in the Korean market. It has constructed a Korean office is located in the Beverly Hills of South Korea, in the town of Samsung-dong. Hillshire Farms does not currently have presence in South Korea; however we can see how Korean customer will react to Hillshire brands from its sales for Koreatown in Los Angeles. From the information on sales within this particular sector in the United States, we can draw inferences on practices that would aid their branding in the Southeastern market, particularly in South Korea and China. Sales have shown the importance of a recognizable symbol for international consumers. According to Sung Lee, an journalist from Korea Daily, the sales of ham products in Koreatown dropped noticeably once it changed the ham products packaging -- they took out it symbolic red color and instead they used a transparent one. This showed that Korean customers recognized the Hillshire Farms products through their use of trademark red packaging, and bought the products largely for the brand recognition (Lee). Establishing brand recognition through the use of symbols and color to associate a company name with a product is the most effective way to generate sales for affordable luxury products within the meat industry, and would be the strategy best used by Hillshire Farms if they introduce their product in the South Korean and Chinese markets.

Consumer Divisions within Market Segments:

These consumer divisions are derived from Nielson.coms PRIZM analysis of consumer segments, and best encompass the traits highlighted within the previous consumer analysis.

Segmentation DimensionNumberPercentageAgeslunchmeatSausagePriorityRank

Up-and-Comers1,677,10122.39%25-4417.00%33.70%No.4

Greenbelt Sports1,683,586 22.47%45-6411.00%36.40%No.3

Kid & Cul-de-Sacs1,914,578 25.56%25-4431.70%20.30%No.1

New Homesteaders2,215,91529.58%25-4440.30%9.60%No.2

Total7,491,180100%N/A100%100%N/A

Product Consumption:

Hillshires target markets, within the segments above, are New Homesteaders and Kids & Cul-de-Sacs. These markets fit well with the products that Hillshire provides, as their products fulfill their needs for healthy, convenient options for families. Hillshire looks to make these two segments true friends (Armstrong).Hillshire provides lunchmeat at a lower price than they do sausage products. That is why the demographics with the least amount of disposable income (couples with kids) would consume more lunchmeat products due to the affordability and convenience factor.Hillshires sausage line, as stated above, is more expensive than their lunchmeats. Our consumption estimate is based on the fact that consumers with the most disposable income will purchase sausage products from Hillshire. The top two segments for consumption of sausages do not have children, which gives them more disposable income to purchase more expensive products.

Estimated Market Growth:

Our estimates conclude that the market that will grow the most in the long-run is suburban households with children. Although there has been a recent population shift among people migrating from smaller towns to cities with suburbs, this will not completely negate the overall trend of people moving out of cities and into suburban areas (Shah).

Value Proposition:

Hillshire Farms provides quality meat products that are both affordable and convenient. We do this by providing superior products, for a healthy family.Competitors:

Domestic: Considering financial elements and ratios, Pilgrims Pride will be Hillshires greatest competitor. Pilgrims Pride has the best financial ratios in comparison to others in the meat industry including the Tyson Foods. The existence of a challenging competitor means consumers could consider their product as substitutes. Further, it also can lead Hillshire to compete for the same segment as its competitors. Hillshire will compete through differentiation based on higher quality and convenience of products.

International: Recently, Smithfield was acquired by a Chinese company, Shuanghui (Kim). As a result of this acquisition, Smithfield will likely be the most challenging competitor for Hillshires future international expansion, especially in Asia. Although Tyson has already started its business in mainland China; however Smithfield is currently advantaged in its understanding the local Asian market with their parent companys innate knowledge (Locations).

Competitive Advantage:

Hillshires has a competitive advantage in the marketplace by producing a quality product for a well-defined target market. Hillshire competes on two points of difference. They differentiate themselves in terms of quality and convenience. Both differentiating attributes will be promoted. Hillshires brand difference clearly mirrors our Marketing from the Heart statement.

From the four market segments previously analyzed, the following strategy is based on the decision to focus on the Kids & Cul-de-Sacs and the New Homesteaders as this is where tactics can be implemented to achieve the most significant growth.

CHAPTER 4

Market Segmentation and Differentiation

Kids & Cul-de-Sacs:

Need convenience, healthy options for young children.

Need options in larger quantities without sacrificing healthy benefits.

Quality: These mid- and upper-income families have high expectations for the kind of food they buy for their families -- they dont just want it to be good for their families, they want it to look like an affordable luxury as well. These are larger families, so they are more likely to look at the prepackaged options as they are likely to be consuming larger quantities of food. Hillshire Farms can provide the deli-style products, at a price that makes sense for larger families. Convenience: With so many kids and activities to keep track of, Hillshire Farms provides many good options of convenient lunchmeat and sausages for families with busy schedules. They want to ensure their kids are receiving the best of the best, and the focus on child-centered products and services includes the food that parents are choosing for their children on a daily and weekly basis. Hillshire Farms can use products that are rebranded from their More Nutritious line to target these families desire for healthy options for the whole family.

New Homesteaders:

Need convenience (for different reasons), want the quality of nicer products but dont want to pay a premium.

Quality: Hillshire Farms has several lunchmeat and sausage options that can satisfy the New Homesteaders yearning for a luxury taste, without the deli prices. They can provide products that deliver the same feel of deli meats -- from the taste of the product itself, to the nicer appearance of the packaging. Convenience: New Homesteaders have a more active lifestyle and are known for wanting to get out of the suburban sprawl and are more likely to own boats and campers. Hillshire Farms has numerous nutritious options that work with these consumers active lifestyles to provide lunchmeats and sausages that can be quick, portable products for all of their picnics and trips, as well as the sandwiches for their kids lunches.

Ansoffs Product Market Grid:

Product Development

Hillshires More Nutritious Line requires significant developmental work. The name of the line is going to be changed to Fresh & Fit. The name will make the product line a more recognizable. With the new name, there will be new packaging. Repackaging this product line will give a new face to Hillshire Farms as well as distinguish it among their competitors. The new packaging will give the Fresh & Fit line a high-quality look that is both eco-friendly and convenient. It will show the product within the package to allow customers to see exactly what theyre buying. The new packaging would be made of recycled cardboard material with an interior plastic lining, to avoid the old plastic-on-plastic look of the other lines. The product line itself would also boast chemical-free meat with a readable, recognizable ingredient list. The products would be produced organically and without any added chemicals or pesticides. Allowing the customers to see what theyre buying before they make their purchase is another way Hillshire Farms will become more transparent with their products.

Market Penetration

Producing a video campaign of several short videos of chefs and known bloggers using Hillshire Farms meat products to produce videos of the execution of healthy and quick recipes, targeting busy families and moms who are more likely to buy products they see in how-to videos. Hillshire Farms should also seek to expand their social media platform through their creation and development of an Instagram, Tumblr, and other social media accounts that can be clearly linked to the main media platform of the company.

Diversification

Considering the current financial and non-financial of Hillshire Farms, the company should seek to continue its current ventures in diversification and improve upon those ventures (such as the Hillshire Snacking line), rather than sink resources into further product diversification at this time. Though significant product development changes could be construed as further diversification of the products offered by Hillshire Farms (with the line being redeveloped as a chemical-free, organic line it does diversify the new product line from the other types of products produced by Hillshire Farms.

Market Development

Domestic: Hillshire should also targeting the rest of middle classes; middle-middle class. However, the company will not target under middle class level customers. Because it will not match for the companys fundamental goal; to provide high-level products.

International: Hillshire has to market their product as a high-quality i.e. luxury, but affordable to international market. Actually the company already started doing it. For example, one of primary target international market, South Korea, Hillshire farm locates its office in Gangnam, the place where middle/upper classes reside.

Product Life-Cycle:

With the More Nutritious line, the product itself is in the late introduction stage, as it has been on the market for a length of time and has gained some customer recognition. The parent brand of the line, Hillshire Farms has products that are largely in the Maturity stage of the product life cycle, as the meat industry is a mature industry. However, with the major changes proposed in the redevelopment of the More Nutritious line, the products would be reintroduced as new products and would begin at the start of the product introduction stage once more.

The product would be rebranded as the Fresh & Fit line -- as lunchmeats and sausages that are free from unnecessary chemicals and organically raised livestock. To promote the new line of Hillshire Farms products a diversified marketing campaign to make customers aware of how they are producing meat that is chemical-free, ethically produced, and high-quality in nature. This campaign would include recipe videos from popular bloggers, with links on the channels of the bloggers along with posting the videos on every form of company media. Company media platforms would also be updated with short video testimonials from workers from the suppliers Hillshire Farms contracts with to show consumers that the company is dedicated to putting families first -- including the families within the company. The new media platform would also have links where consumers could contact the company directly, and receive a response by email or live-chat within hours or minutes.

Contact Points

1) Hillshire products will be available in-store for customers. The product packaging will provide all the nutritional information as well as suggested retail price and a link to a page in the companys website that will provide more information about that specific product. Retail associates will be able to easily access any information about Hillshire Farms products through the improved Hillshire website should a customer request more information. The website will allow associates to answer any questions a customer may inquire about, as well as provide the customer with the ability to easily access the information at home.

2) Hillshire is looking to penetrate deeper into retailers that are suited directly for their target market. Retailers that are in mid to higher income areas which have an atmosphere which conveys quality and convenience is where Hillshire products should be. Retailers like Target provide the impression that we want to make on our customers; Hillshire is a quality, healthy product that is convenient for the entire family. Hillshires retailers will take care of their products and display them in a manner that is convenient for the customer to find.

3) Hillshires website will provide customers with any information that they may need. Hillshires mission statement will be front and center on the company website, so that its the first thing that is seen. There will be links to nutritional facts about each product as well as information on how each product line is produced. There will also be a link for customers to contact the company and receive quicker responses to questions. Lastly, there will be informational videos on how to use Hillshire products to make healthy, appetizing, meals that the entire family can enjoy.

4) Hillshires product packaging will provide customers with instructions on the best ways to prepare their products after their purchase (whether or not its ready to eat or requires specific cooking time, etc.). Each package will have a suggested retail price to ensure they are paying a good price and link to the company website for that specific product. Having a link on the packaging will lead to more traffic on Hillshires website, which will increase selling opportunities.

5) Since Hillshire provides relatively affordable, everyday products, it is unlikely that there would be a great risk for dissonance. However, there is always a risk for cognitive dissonance. Hillshire will reduce this risk by being extremely transparent with their production and providing testimonials to give customers increased assurance that they made the correct decision.

Core Benefit

Hillshire Farm is a company provides a high quality meat products to family using a homey emotional appeal. They use the slogan The Farm. The Food. The Craft. to evoke an image of farm-fresh food. The logo reinforces the slogan, with the picture of the barn and simple font. This is used to appeal to the consumer using tactics that make the brand seem smaller and more accessible to the consumer. The company currently uses some social media, and has a sentiment of middle-class luxury. Consumers become loyal as they associate the product with traditional, quality meat that feels familiar.

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CHAPTER 5

Pricing Objectives:

Convey the Quality of the Product

The price should be a reflection of the type product Hillshire Farms produces -- the price should not be so low that consumers cannot differentiate their ideas of quality from that of lower-end brands. Ideally, the price should be the first point of conveying the idea of an affordable luxury to consumers.

Convey the Convenience of the Product

The price should convey that the product provides some level of convenience to the families that purchase their products -- a price that is not so low to negate the value associated with the product, but also one that makes it possible for regular purchase by upper-middle class families. The price should thus convey an idea of weekly household convenience for families who are looking for food that is ready to eat or quickly prepared.

Pricing constraints:

Cost of producing ethically-made food

Producing food that is organically made and chemical free is far from inexpensive. The cost to use alternative methods is notably more expensive than the current methods of production, and paying their workers a just wage would be a deviation from current industry standards and would significantly increase the cost of production.The extent of willingness for consumers to pay a premium Consumers in the target demographics are more willing to pay a premium for food that they know is healthier and safer for their families. However, there are realistic limits to their willingness to buy foods that are produced ethically and organically -- as consumers might choose to just buy deli meat or locally produced meat if the price of Hillshire Farms is too high for their families.

Pricing Assumptions:

Inputs: The environment factors during the meat production such as disaster, drought can affect quality and quantity of the meat industry so they can let the changing price for the product. Processes: The way they reduce the waste that cause during the meat production can affect the price for the product, such as the price for electricity usage, the water waste, etc. The process of introducing the re-usable packaging of Hillshire Farms lunchmeat products also affect their prices as well, such as the cost of innovating, designing the packaging as the purpose of convenience and friendly-environment. Research and Development: The development of the new line products called Naturals lunchmeat come along with the first-ever money-back guarantee program Love It or Well Eat It where Hillshire Farms can make a donation to Feeding American, a non-profit hunger relief organization, or customers can get a refund of up to $6 for one per household if they chose Well Eat It plan. This rebate program definitely affect the price that Hillshire Farms would set as well (Shaffer, 2015) Fixed costs: The marketing plan such as promotion costs. Variable costs: The input costs. Processes cost as well as R&D, particularly the coupon rebates for the program of Naturals lunchmeat.

Factors Affecting Price Sensitivity

At the time of the new Fresh & Fit lines introduction, Hillshire Farms would have a line that would make them one of the first large-chain companies to introduce an organic, chemical-free, ethically produced line of meat products, giving families a new option in the market and thus presenting a very different value proposition than other brands in the market. With this unique value associated with the new products, consumers would be willing to pay a premium to obtain meat products from the Fresh & Fit Hillshire Farms meat line. Consumers could pay for other options such as deli meat, or smaller brand lines of organic meat, but other major producers have been slow to produce lines of easy to prepare and ready-to-eat meat products that are similar to the proposed Fresh & Fit line. With few products on the market providing a direct comparison, it would be harder for consumers to find products that fill the exact proposition of the new Hillshire Brands product line. In larger cities, there are more options, but our target markets live in the suburban sprawl and in smaller towns, which limits the ability to compare for the New Homesteaders more than that of the Kids and Cul-de-Sacs (As the latter live where there are more grocery options in the same close radius). The price of the products would consume a portion of the household income that is fairly small in proportion to the purchase of other household products, which means that families are less likely to spend large amounts of time debating the product, and they are less likely to stop buying the product if it becomes marginally more expensive because the price is not likely the deciding factor when purchasing the product. Consumers in the target market are primarily concerned with the end-benefit of the product and how it will affect the health of their children and their families. With the new product re-development, Hillshire Farms is promoting the idea that they have shouldered the costs and the resources for changing the way that they produce healthier meat for families, and they are making that a possibility for families to consume high-quality meat on a weekly basis. The company chose to invest in suppliers that produce meat ethically and organically, though it increases the supply cost significantly. The cost of producing and maintaining an inventory of meat that is chemical-free gives the company a shorter window for inventory turnover, which creates a greater need for efficiency and localization in product production. However, the price associated with a higher-quality product matches the costs of production that are shouldered by the company, and Hillshire Farms can thus justify the cost of producing a unique Fresh & Fit line.

Demand Elasticity

Demand for these products is inelastic, as price is not the determining factor in demand, as our target market looks at other factors when purchasing meat products and meat products do not consume a significant portion of household income.

Competition and Competitive BehaviorThere is little competition currently in the market from other similar-size brands. The high cost of market entry makes it difficult for new markets to emerge in the meat industry, and the high conversion cost for the production of a similar line makes it more difficult for competitors to emerge quickly to compete with Hillshire Farms.

Environmental analysis

Since consumers have been to seeking for a meat as their protein for daily life, Hillshire Farms which figures most of meat-centric products can be one of their best choice. This factor provides Hillshire Farms with a clear consumer desire in numerous markets, which will boost sales in the industry as a whole. Due to the cheaper prices of domestic meat compared to the international meat prices, Hillshire Farms can take advantage in the pricing decision. The ability to afford the best technology for food safety as well as eco-friendly packaging.

Pricing over the Product Life Cycle:

Our strategy will not change over the PLC. If we lower the price of the product than it will negate the value of the products since we are targeting our brand as affordable luxury. Same reason, we cannot raise the price incredibly, by doing so our target customers cannot afford our products. However, we will be able to increase the price marginally. Our target customers will be the ones who will be less elastic for the price change because the primary factor for them to buy our product is the quality not inexpensive price.

Segmented Pricing:

We could probably have to differentiate the price based on region. For instance, the cost of living and the meat will vary depending on the retail places so some place will have higher price than others. But this cannot be considered as Segmented Pricing this price differentiation is based on different cost of production.

Pricing Determinants:

The product will be the most significant factor when determining price. Hillshires Fresh & Fit product line will be more expensive due to the nature of production. Fresh & Fit will require a more rigorous process that will cost the company more to produce. However, the product line will be sold at a higher price than the other lines because of it being healthier and organically produced. Placement will significantly influence the price of the product. The region in which the products are being sold will affect the price more than each individual retailer (unless a retailer is exclusive to one region). In a region where the cost of living is higher, the price of Hillshires products will reflect that, that is true with lower income regions as well.Promotion will only slightly affect the price of Hillshire products. The main source of promotion will be the online presence that Hillshire has, which is significantly cheaper than television advertisement. Having a presence on Instagram, Facebook, Twitter, and YouTube and through the company website will be our strongest, promotional, assets.

CHAPTER 6

Channels and Intermediaries:

Target will provide the best coverage of our target market. They are conveniently placed in neighborhoods across the U.S that are made up of upper middle-class consumers. Target will be our main intermediary. Target conveys quality and convenience to shoppers from the minute they enter the store. Those factors are precisely what Hillshires target market considers when they are shopping for their families. Jimmy Johns also fulfills our consumers buying requirements. Just like Target, they are known for their quality meat products, good customer service, with a high convenience factor. Target and Jimmy Johns will likely be our most profitable intermediaries due to the fact that they both penetrate our target market. The competition these intermediaries face is Subway and Walmart. Ideally, Hillshire products should be fully integrated into Jimmy Johns locations in a year and a half. Hillshire products can already be found in Target, however, they look to put more emphasis on that relationship in order to gain more shelf space in the next six months.

Inventory Considerations:First, the company needs to have suppliers for the meat. Next the meat will need to be processed and packaged. Lastly it will be sent to retailers who have made purchase orders and it will be stocked on their shelves for end-consumers to buy.Use technology systems to ensure that Hillshire has a high inventory turnover ratio. This will reduce waste by having less inventory on hand that has not been purchased by an intermediary which could expire.

Customer Service Factors:

Dependability>Convenience>Communication>Time

Hillshire can best serve their customer base by producing dependable products that are convenient for them. They also need to communicate well with customers in order to be a transparent company.

Retail Considerations:

Product Life Cycle

Hillshires Fresh & Fit line is currently in the product development stage. At this stage, the most important part of the process is developing the product, then getting feedback from our target market using focus group and a soft launch in retail stores like Target.

Strategy

Hillshires retail strategy is to move into retailers such as Target that cater more towards the mid to upper-class. Our product line will continue to be relatively narrow for the industry. Focusing mainly on the convenience products that are offered domestically. We are still going to continue with all of our product lines (lunch meats, summer sausages etc.) except for the more nutritious line which will be replaced by the Fresh & Fit line.

Selections

Jimmy Johns and Target both emphasize quality. Jimmy Johns in particular, is known for their convenience and customer service. Both of these retailers will be strong assets for the future of Hillshire. As far as competition, we are competing mainly with the other big companies in the meat industry. Jimmy Johns main competitor is subway, however, with Hillshires partnership, they could differentiate themselves even further. Target faces a lot of competition in Walmart.

CHAPTER 7

Integrated Marketing Communication (IMC) Presence:

The firms strategy does not appear to be truly integrated. First, it is due to lack of promotion on new social media, like Instagram. Also, for Hillshire farms new product line, Hillshire Snacking, the company has a separate webpage (as well as separate Instagram account), but there is no link between the main website and new product line (Hillshire Snacking). The firms promotional objectives are providing high quality food that is convenient but due to the problem mentioned, the brand is not truly presented in a consistent, positive message.

Advertising

Hillshire Farm is using a pull strategy in advertising. The companys website fails to convey the main objective, which is providing a high quality product for the family. Hillshire Farms main promotional outlet is still TV commercials. The company does have online commercials on YouTube, but it is lacking in promotion on new social media like Instagram. Hillshire Farm uses both TV and social media.

Public Relations

The company does not have robust enough image to cover up an unfavorable event. For instance, according to the Food Safety News, Tyson Foods was repeatedly blamed for unfair treatment of animals. The treatment to animals has been pointed out as the companys main weakness, but the company has not resolved this issue.

Personal Selling

Hillshire farm use the B2B sales force. It does not reach out directly to the customers. Instead, it sells to retailers like Hy-Vee who then sell their products to end consumers, thus our main prospects are the major retailers. Since Hillshire Farms main final target customers are middle or upper-middle class people, the company should gather the information about each retailers main customers, like income range or size of the family. Hillshire should emphasize that its brand is already well recognized and has established loyal customers. Second, it provides high-quality but affordable products. Third, its products are convenient, especially for family oriented consumers. The sales force should be organized by mainly considering customer type because our main target customers are upper-middle class who live in suburban residential area.

Sales Promotion

The company use the traditional media as well as some social media like Facebook or YouTube. According to its Facebook page, it posts commercials 2-3 times per week.The websites overall design is pleasant. It is very simple. Primarily using red color, which successfully catches the eye. Simple and clearly organized. There are no videos on the website. The website is currently lacking ways for user-to-user communication to take place. Hillshire Farm does not provide a website tailored for consumer purchases. Currently it does not have a direct transaction tool.Hillshire Farm is lacking in promotion through new social media. For instance, on Instagram, they only have a few posts and it is not polished enough to attract the customers. The company is reaching the target audience, but not effectively. Our main target markets (Kids & Cul-de-Sacs, New Homesteaders) are more exposed to new media, rather than traditional media outlets. But Hillshire Farms social media marketing needs to be developed more. The promotional strategy is in the stage of introduction and growth. Hillshire Farms main focus is to promote their high quality products. As mentioned before, the company is behind in utilizing social media.

Proposed IMC Strategy:

Hillshire Farms value communication will come from an integrated online presence. The companys informational/recipe videos will show consumers exactly what they can do with our products. The revamped Instagram account will show the quality of finished products, as well as the farmers who help produce those products. General transparency will do a lot to communicate the value of Hillshire products. Hillshire will answer all questions that are sent in via email or through the forums implemented on their website. Doing so will give consumers peace of mind that what they are purchasing is a quality product and that Hillshire stands by their craft.Currently, Hillshire has a sub-par advertising strategy. Hillshire needs to move away from television advertisement and more towards social media. The company website, as well as any social media, needs to be one cohesive unit in order to give the same message across all media outlets.Product publicity is what Hillshire needs to focus on. The awareness of Hillshires snacking line is lacking. Our social media and online presence is the best way to publicize new product lines. The company needs to publicize their work with nonprofit organizations such as Feeding America. Doing so would give Hillshire a lot of good PR that is otherwise untapped. As far as sales promotion goes, Hillshire will give lower prices to retailers who order their products in bulk. This will encourage large orders while maintaining good customer relationships.Hillshires direct marketing will be focused on social media. Previously, Hillshire has used television ads to reach their target audience. Their use of social media has not been prioritized. Social media is the future of marketing Hillshire products because it is the best way to reach the millennial generation. Website management along with social media, and video blogs are all technological tools that Hillshire can benefit from. It will increase awareness of new and current products as well as maintain general transparency with customers. Due to Hillshires advertising going from more traditional to online/social media marketing, that cost will go down by an estimated 5%.

CHAPTER 8

Market Alliances:

Within the industry, we could form an alliance with Jimmy Johns as well as Kraft cheese. Jimmy Johns combines the idea of a product as an affordable luxury with gourmet sandwiches. They also capitalize on the convenience factor with the slogan freaky fast delivery which works with the convenience factor that is important to Hillshires target market (Jimmy Johns). Kraft is in the same market as Hillshire (food products), but is more of a complementary purchase, with similar branding strategies as Hillshire farms (Kraft-Heinz). Outside of the food industry, pairing with a beverage such as the Simply Orange Juice Company (which actually makes a wide range of natural juice products), is a good pairing as their brand is built around juices that are made with all-natural products and a clear, concise ingredients list without all of the chemicals and preservatives found in their competitors (Simply Orange Juice). This strategy aligns with the proposed strategy for Hillshire as they move into the market of selling chemical-free meat.

Marketing Budget and Schedule:

The proposed strategy would require an increase in overall expenditures due to the high switching cost for moving suppliers and cost of changing packaging materials and updating technological tactics in marketing. While the economy did take a fall in 2008, the market is beginning to rebound and people are once again more willing to spend more on products than when the recession first hit (Food Industry Costs, Profits, and Productivity). It is difficult to pinpoint exact numbers, as stated previously segmented financial information on Hillshire Farms is outdated and does not include budget information.

However, generally speaking for the industry, total marketing and production costs represent 80% of the total cost to the consumer, leaving a 20% margin before assessing other costs (Food Industry Costs, Profits, and Productivity). With this in mind, its likely that the total cost would temporarily increase as a result of the switchover by approximately five percent. However, those costs would likely return to the industry average after integration as many of the expenditures would be one-time switching costs. Within the total marketing and product costs, the ratio of marketing costs to farm production costs is likely to shift as well, as the cost of production would more sharply increase. The farm cost will increase due to the standards for the Fresh & Fit line being much higher than Hillshires previous More Nutritious line. Maintaining these standards for this product line means that Hillshire will spend a relatively large amount during the production phase. Using the proposed strategy as compared to the marketing costs. Currently, marketing costs represent approximately 75% of the total cost of marketing and production, and the farm production costs equate for 25% of the total. However, with the change in costs within the total cost, the new projected ratio would have 70% of the total costs as marketing costs and 30% of the total costs as farm production costs.

Criteria for Determining Effectiveness:

The following four criteria should be used to determine the effectiveness of the plan, with the questions listed below used to decide whether the new strategies were effective at meeting the financial and non-financial goals of the company.

Create better media outputs that are more functional

Was the proposed expansion to the website implemented?Did consumers notice the improved ease of use and contact?Does Hillshire Farms have a clearly cohesive media platform that links everything back to centralized pages?Were the cooking videos utilized by the target audience?Have media that highlights transparent materialDoes the media that is discovered on search pages reflect the reality of the new product line at Hillshire Farm? Does the company communicate their family values across their media platforms?Is the message that consumers receive clear and consistent?Can consumers find how and where their products are produced with ease?

Increased total asset turnover with further market penetration into specified target markets.

How have sales increased in our target markets?How are resources being utilized more efficiently under the new standards?Through creating a greater sense of customer loyalty with a family-oriented product, which maintains revenue that permits dividend yield leadership.

How many customers buy our products twice a month or more?Are consumers returning? If so, why?What feeling does our brand image create?

Post SWOT:

Strengths

Upon implementation of the new marketing plan, Hillshire will have created exceptional brand transparency. Consumers will be able to easily access product information regarding how and where it was produced, as well as what is in the final product. Hillshire will still have a large portfolio, a well-established brand, and a strong customer loyalty base.

WeaknessesHillshire will eliminate their lack of transparency by utilizing their online presence to show what goes on in the production process and what is in the final product. Communication between Hillshire and consumers will increase significantly with the new website and social media accounts. Walmart will remain a large customer, however, Hillshire will move towards retailers like Target, who better serve their target market.

Opportunities Hillshire will capitalize on the fact that consumers are moving more toward organically produced food with their Fresh & Fit product line. They will also give consumers an insight into how Hillshire products are produced, which will give consumers peace of mind when purchasing their products.

ThreatsHillshire will put to rest consumer concerns of the ethical treatment of workers with their transparency throughout the production process. Some threats could not be neutralized such as veganism and pressure to produce safe products, every time.

Final International Considerations:

Hillshire Farm will still primarily target upper-middle class consumers in the international market, because those are the people who can consume high quality meat products. However, the company must consider current trends in its primary target market. For example, in China, one of the firms biggest international markets, according to Mark Maginier, currently the portion of the upper-middle class in mainland China accounts for 12% of the whole population and it will be growing up to 54% by 2022. This implies a huge potential increase in company margin; growing population of upper middle class (about four times greater!) means more expected profits. This will lead Hillshire to have greater market capitalization in China.There is another important trend in China that the company must keep in mind; the growth of mobile market. For instance, like Facebook messenger in America, one of the most influential mobile messenger in China is WeChat. WeChat currently has more than 0.4 billion monthly users and the annual growth rate of its users of 57% (Dou). This app functions similar to Facebook. Chinese people not only use this mobile application to send and receive messages, but also to check their newsfeed. By successfully initiating promotion in WeChat, the company can firmly position its brand in the Chinese market.

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Part II Referenes:Animal Rights Group Files Criminal Misdemeanor Affidavits Against Tyson and Six Employees. Food Safety News. News Desk, 28 Oct. 2015. Web. 21 Apr. 2016. This source was employed to support the argument of criticizing the companys poor reputation management.

"Families Will Love New Hillshire Farm Naturals Lunchmeat or Their Money Back." Reuters. Thomson Reuters, 09 Feb. 2015. Web. 21 Apr. 2016.

Food Industry Costs, Profits, and Productivity. Food Cost Review. Economic Research Service. USAD, 1997. Web. 21 Apr. 2016. This source was used to support our marketing budget.

Hillshire Snacking. Instagram. 2016. Web. 10 Apr. 2016. This was used to support our argument that points out the companys poor p