Harvard Case study 3

1. Saxonville Sausage
Company

2. SITUATION ANALYSIS
SAXONVILLE
THE COMPANY
70 years old company
Well established German brand
in the US
1.5 $ billion sales in 2005
Mainly producing fresh pork
sausages
MAIN BRANDS
1. Bratwurst
70% sales, mainly used during
weekend BQ
Declining sales in a flat market
2. Breakfast sausages
20% revenues
3. Store brand sausage
5% of sales
VIVIO
Italian sausages brand
Regional distrib.: Eastern US
5% of company sales
Growing segment (+15% national
growth in 2005)

3. VIVIO IN SAXONVILLE PORTFOLIO
MARKET SHARE
MARKETGROWTH
VIVIO VIVIO
BRAT
Z
STAR
QUESTION
MARK
CASH COW DOG
SAXONVILLE
PORTFOLIO
HIG
H
LO
W
HIG
H
LO
W
VIVIO
Eastern US VIVIO
Nationwide
bratz Breakfast
sausage

4. PRODUCT
• Undifferentiated product
• No clear positioning
• Italian name to create consistency
PRICE
• In line with competition
• Inconsistent with Saxonville pricing strategy (15 % premium)
PLACE
• 16% of national supermarkets
• Mainly Eastern part of US
PROMOTION
• Discounted price during the launching period
• No communication
VIVIO: CURRENT MARKETING
SITUATION

5. SWOT ANALYSIS
Strengths
• Vivio’s success in the existing market
• Saxonville’s strong national distribution
Network
• Saxonville’s strong brand Recognition
• Saxonville’s association with high
quality products
Threats
• Competition from 29 local, already
established brands
• Some competition from national
• Risk of cannibalization with Brats
• Appealing to Western region?
Weaknesses
• Vivio’s lack of clear positioning
• No product differentiation
• Italian brand, German company
Opportunities
• Growing market for Italian sausages
• No national competitors for fresh
sausages
• Capitalizing on Saxonville nationwide
brand awareness
• Exploiting Saxonville’s retail power

6. OBJECTIVES
1. Successful launch of a national Italian Sausage brand
▪ Take advantage of high annual growth rates (2004 – 9%, 2005 – 15%)
▪ Increase market share and contribution to total revenues
1. Limit cannibalization of other market segments (Brats and
Breakfast Sausage)
1. Decrease problems associated with distributing outside of core
geography

7. SEGMENTATION AND TARGET
Segmentation
DEMOGRAPHIC
Gender, status, number of
kids, age of children,,
education level, working
staus
PSYCOGRAPHIC
lyfestile: busy life, short
time available for family
needs
BEHAVIORAL
frequence: heavy, medium
and light users
Target
• Busy female head of
household
• age: between 20 and
50
• Geography:
everywhere in the US
Values
• good, nutritious meal
• satisfy everyone’s
needs
• time spent with family
• get everything done
• creativity

8. POSITIONING ALTERNATIVESFAMILYCONNECTION
PROs:
Recalled by the Italian brand:
opportunity to make it stronger
Emotional bound
Not yet exploited
Consistent with Saxonville moniker:
“The Family Company”
Aspirational value
1° concept choice
CONs:
Already implied
copiable
Unrealistic idea
CLEVERCOOKING
PROs:
Add more value to the general family
concept
Easier tactical application
1° choice in “buying intent” test
CONs:
Loss of focus on the original target
Every sausage is “easy and fast”
Less aspirational

9. PRODUCT BENEFITS
EMOTIONAL
BENEFITS
Family happiness
CONSUMER BENEFIT
More time for the mother, make
meal that everybody loves
FUNCTIONAL BENEFITS
Creativity, ease of use, quickness
PRODUCT ATTRIBUTES
Nutritious, short cooking time, ingredient for other meals

10. POSITIONING
FUNCTIONAL BENEFITS: Quick, easy, creative, nutritious
EMOTIONAL BENEFITS: everybody loves it, the family is happy,
the mom spends less time cooking,happy memories
CHOSEN POSITIONING:
FAMILY CONNECTION
REASONING:
CLEVER COOKING already perceived by Vivio’s customers
Enrich the brand with emotional content
Exploit the first mover advantage and bind the customer

11. For the obsessing question “what do we have for dinner tonight?”
busy mothers have now the right remedy: Vivio by
Saxonville.Thanks to its high nutritional value and ease of use, this
brand of Italian sausages allows moms to prepare a variety of recipes
that everybody loves in only a few minutes. The rest is all about
sharing moments!
POSITIONING STATEMENT

12. Italian sausages
by Saxonville
Saxonvill
e
Vivio
• Unknown
• brand1.
• German
heritage
• Italian
product
2.
• Italian
brand
• Quality
recognition
3.
PRODUCT
Brand name - alternatives

13. PRODUCT
WHY VIVIO ?
◼ Well established in Atlantic areas
▪ Cost of reintroduction of new brand?
▪ Necessity?
◼ Italian Name
▪ Placed 7th out of 20 choices of Brand
Names
▪ How much value does moving from 7th
to 1st add?
▪ Italian family message is still conveyed
◼ Nationwide recognition and
popularity
◼ Signifies quality/credibility for an
unknown brand
◼ Preferable placement with retailers
WHY BY SAXONVILLE?
Brand name – Vivio by
Saxonville

14. ◼ Packaging:
▪ Uniform/ large window to make fresh product visible
▪ Large Vivio Brand/ Family Image
▪ Italian colors in the brand
▪ “Back-Placed” recipes
PRODUCT
◼ SKU choices:
▪ 4 highest performing SKUs from 2005
▪ 91% of 2005 Italian Sausage revenue
▪ Limits product variability/eases distribution problems

15. PRICE
◼ 5-10% premium above competitive brands
▪ Brats and Breakfast sausage both priced above SRP of competing brands
▪ Price must signal quality
▪ 5-10% on a low price product doesn’t impact that much
▪ Consistent with overall brand image
▪ Especially if we are going to keep “by Saxonville” in the brand
▪ Especially after the emotional positioning and communication effort
◼ Must be careful not to overprice too much:
▪ Multiple regional competitors as opposed to brats and breakfast
▪ Regional brands will have “homegrown” differentiation and firm established customer base

16. PLACE
National Supermarket Chains
Supercenter concept
Prominent placement in the Italian Sausage section
in the store
Currently stay out of Discount Warehouses despite
increasing popularity

17. PROMOTION
Influence FHH @ home
• 83% of shoppers make their purchase
decision before they leave the house
• 90% of Mothers prefer brands
recommended by other mothers
Magazines/Websites
• Older vs. Younger (Babble.com &
Family Circle)
• Family theme ads/Sponsored Recipes
Complements/Coupons
• Rice, Pasta, etc.
• Online Coupons
On-Site
• BOGOs
• Sampling/Events

18. CANNIBALIZATION WORRY
Cannibalization
?
Seasonality
Different Peak
Purchasing Periods
Target
FHH vs. MHH
Eating
Habits
Special Events vs.
Everyday Dinner
LO
W

19. Financial Projections
Base Year 1 Year 2 Year 3
Sweet Sausage $3,714,499.00 $9,576,442.73 $10,725,615.86 $12,012,689.77
Hot Sausage $18,858,587.00 $48,619,794.61 $54,454,169.96 $60,988,670.36
Mild Sausage $42,414,884.00 $109,350,872.81 $122,472,977.55 $137,169,734.86
Mild Sausage (55oz) $2,829,047.00 $7,293,636.80 $8,168,873.21 $9,149,138.00
Totals $67,817,017.00 $174,840,746.95 $195,821,636.59 $219,320,232.98
% of Revenue 5% 10% 12% 13%
55% National
Supermarket Penetration
75% Relative to Current
Sales
ASSUMPTIONS
:

20. ACTION PLAN-PRELAUNCH
Pre-Launch
March 2006 - Dec 2006
Launch
January 2007 – Feb
2007
Post-
Launch
Jan 2007 – Jan 2008
IMMEDIATE
Distributor
Coordination
Ad Campaign
Website
Sales Info
2 Weeks Prior to Launch
Magazine/Online
Advertising
Ambassadors/Word of
Mouth
Launch (First 2 Weeks)
On-Site
Sampling/Promotion
Buy One/Get One
Launch (Following 4
Weeks)
Complementary Products
Post-Launch
Measurement/Control
New Growth Ideas

21. MEASUREMENT/CONTROL
Product
Ideas
• Additional SKUs/Flavors
• Differentiated Packaging
Promotional
Ideas
• Television/Radio?
• New Target/Target Expansion
Measurement/Control
Broader Geographic Focus
Raw Sales Data
Sales Force/On-Site
Feedback

22. DwDeclaration
Created by
Divya Agarwal, during an
internship under Prof. Sameer
Mathur, IIM
Lucknow.
www.IIMinternship.com

23. Thank You.