Introduction
First in Show Pet Foods is among the newest frozen dog food companies, which can be considered to be a first-mover in the given market. The dog food market is estimated to be worth $10 billion, which is half of the veterinary service market of $20 billion. The overall dog food market analysis also should consider the fact that there are 60 million dog owners, which is a significant portion of the US population. However, the market is competitive because there are 50 dog manufacturers and 350 dog food brands in the U.S. alone. The market is segmented into three main categories, such as dry food, canned food, and treats. Canned and dry foods can be considered as complete foods for dogs, whereas treats are supplementary only. There is a low awareness level regarding frozen dog foods, which is both a challenge and an opportunity.
Main body
The target market for Show Circuit, a product of First in Show Pet Foods, consists of dog owners who would like to purchase the finest dog food for their pets. Buyer behavior is complex, where one’s total income, presence of children, and age influence the choice of dog food. Show Circuit offers the best dog food in the market, which was originally designed for dog show champions. The product offers a new way of feeding a dog, which will be the healthiest approach. The overall appeal is manifested in four concepts, such as luxurious fur coat, finest dog food, guilt concept, and champion comparison. These are highly appealing product attributes, which can be marketed effectively.
The most suitable segment is dog owners who wish to purchase complete and healthy foods for their pets. These individuals should have a household income higher than $25000, and thus, they will invest in their dogs. The most suitable strategy for the company is to increase the overall awareness of the public regarding frozen dog foods. There is a high likelihood that many dog owners wish to buy the finest dog food, but do not know about alternatives to canned or dry foods. Therefore, Show Circuit has a good promise to be successful if it informs and attracts the majority of interested buyers.
In order to calculate the breakeven point, the following formula needs to be utilized:
- Break-Even point = Fixed costs / (Sales price per unit – Variable costs per unit)
- The cost of production, freight, and packaging per case of 12 15-ounce tubs = $7.87
- The cost per tub = $0.66
- Commission fee = 7% of price or $0.7
- Fixed costs = $700000 for marketing + $30000 for slotting fee
- Overall Contribution = $10 – ($0.66 – $0.7) = $8.64
The appropriate price is $10 or higher because another frozen food treat of 14 ounces is sold for $4.19, whereas similar premium product Bil Jac is sold for $5.29 per five pounds. Therefore:
- Break-Even = ($700000 + $30000) / ($10 – ($0.66 + $0.7)) = 84490 units.
Conclusion
First in Show Pet Foods needs to carefully plan its marketing strategies and execute them correctly. In addition, the production sector needs to be flexible for sudden changes in demand, because it can either exceed expectations or fail. The company should consider utilizing social media platforms to raise awareness regarding frozen dog foods. The company should associate frozen dog foods with Show Circuit because only raising awareness about frozen dog foods will benefit its competitors in a similar product segment.