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Little Debbie Sales Offering to Winn-Dixie

Chris HolifieldClay Zellich

March 4, 2004

Identification of McKee Foods Corporation (Little Debbie)

McKee was founded in the late 1950’s by O.D. McKee (littledebbie.com). They began in

the 1960’s hiring independent distributors to sell Little Debbie’s. After this, they appointed

representatives to help the distributors grow their business. The representatives go from store to

store offering the managers various promotions and display offerings. They also spend time

building relationships with the store managers. After years of growth, today Little Debbie has

developed a retail business development department. People from this department travel to all of

the headquarters of the major companies. However, the little things that go on in the individual

stores are what keep the business running smoothly.

Identification of the Prospect and Its Needs

Profile of the Buyer:

The store manager at Winn-Dixie has held his position for the last five years. He has also

made the purchasing decisions for the past five years. This is a new-buy situation, but most

Winn-Dixie’s are already carrying Little Debbie’s. Sometimes when store managers are too

busy they will send you to their assistant manager to make any decisions. On this aspect, it is

also important to develop a good relationship with the assistant manager. However, if at all

possible, it is important to deal directly with the manager. After all, he makes the most important

decisions.

Profile of Winn-Dixie:

In 1984, Winn-Dixie started its first marketplace that consisted of 45,000 square feet. In

2000, they purchased 68 grocery stores in the southeast. These stores were in Mississippi,

Alabama, and Louisiana. Also in 2000, Winn-Dixie started its own store brand with almost

3,000 items sold in the 1,073 stores (winndixie.com). The store consists of a store manager and

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two assistant managers. One of the assistant managers spends his time helping the manager

make orders out and communicate with vendors. The other assistant manager manages the

stockers and checkout clerks (Holifield). For this assignment, we are going to suppose that the

current Winn-Dixie that we are calling on is not carrying Little Debbie’s. This will help us in

making the ADAPT sequence a little more interesting.

Discussion of Buyer’s specific needs and/or problems

I have noticed that the buyer has had several other cookie and cake companies’ displays

in the front of the store. I have also noticed that they are not selling anything. As a matter of

fact, a few weeks ago I saw one of the other vendors picking up product that had gone stale.

Sure, the vendor is responsible for anything that is stale, but that means that the store did not

make any money off of the product. They actually lost money because they had their money tied

up in that product. This brings a big problem to the table. The store needs to use their space

very wisely, especially the front of the store, because it is the prime spot. This is where the store

gets into the customer’s mind that “Hey, this store has great prices.” The buyer would like to

make as much money per square foot as they can. This is where the need comes into play. Of

course, everyone has a need to make more money. In the case with the other vendor, the store

lost opportunities for several sales. As a salesman, one knows that a sale lost today can never be

regained. This is a need gap that Little Debbie is willing and able to fill.

Another need that the store has is a need to draw customers into the store. They always

have to have a few products that they do not necessarily make a lot of money on, but they make

it up through other products. Now, most stores use products like Coke and Pepsi, but several

stores that I call on have been successful at using Little Debbie’s to draw in customers.

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The store also needs great service and someone to fill the shelf when it is empty. If the

shelf becomes empty the store will lose a sale. When this happens the vendor is losing money

for the store, and the manager and the organization will not be very happy.

I know that this manager also has a need for a good relationship. It is important to be able

to call each other friends, and he will feel comfortable calling me whenever he needs something.

He has a need for his business to grow. His district manager is constantly hounding him

to increase sales. He really needs his vendors to help his business grow.

He also has a need for a product that has a good reputation and brand image. Products

that have better awareness are more likely to be bought by consumers.

He has a need for a broad product line in the snack cake industry. Most of the other

companies only offer a few products.

Finally, the manager has a need for promotions and displays. He wants seasonal

offerings to take advantage of the peak seasons. There are a lot of people out shopping during

the holidays, and it is important for him to not take these times for granted.

Identification of our Total Market Offering

Now that we have discovered several needs for the buyer, we are going to offer him

several features, advantages, and benefits that our products offer. We discovered that he had a

need to draw people into the store. As we explained earlier, most stores use Pepsi and Coke to

draw people into the store, but we have found in stores that Little Debbie’s work really well in

this type of situation (Holifield). The advantage, that he will have from this, is that people will

see the low prices, and they will automatically assume that the store has low prices. This will

ultimately increase sales volume. Thinking reasonably, all customers will not fall into this trap,

but the majority of grocery shoppers are drawn in by this. The managers of grocery stores

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almost always think like this, and they are always looking for ways to draw a customer’s

attention. The major benefit for the store manager and the organization, in this case, is to

increase revenue.

Another need that we have discussed is the need for a profitable use of space. Grocery

store managers determine profitability by square footage. They will look at a display and

determine how much money they are making off of that display. Little Debbie will offer them an

opportunity to make more money per square foot. The competitors’ products sit there and

eventually go stale. This is a lost opportunity for the store manager and Winn-Dixie. The

advantage that Little Debbie brings to the table is that it will sell a lot better than the competitors’

products. The major benefit that this will bring to Winn-Dixie is a growth in sales and profits.

The store manager always needs a vendor that will give him great service. One of the

store manager’s key tasks is to make sure that all of the shelves stay full. When the shelves are

empty, the store manager and Winn-Dixie loose sales. The advantage that I bring to Winn-Dixie

is that I make sure to keep up good service. This means that I am in and out of the store on a

daily basis and keep the shelves full and in great shape. The customers are more apt to buy from

a clean and fully stocked shelf. The major benefit of all of this is that it will make the manager’s

store more money.

We also understand that it is important for the store manager to have a good relationship

with his vendors. The advantage to this is that the manager can call me anytime that he needs

something. The benefit from this is that there will be trust, honesty, dependability, and

compatibility between the store manager and I.

The manager needs his vendors to want to help his business grow. The major feature that

Little Debbie brings to his business success, is that Little Debbie attracts more customers,, which

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will help his business grow. The advantage to this is that the major fact is that Little Debbie’s

just simply sell. It does not take a lot of work to sell Little Debbie’s. This will benefit the

manager because it will help him make more money, and it will give him personal recognition

within Winn-Dixie. When he makes a move to help his business grow, he is put in the spotlight

of the company.

Another need that the manager has is to have well established brands that have a good

reputation. A feature that Little Debbie offers is that people look for our snack cakes. Our brand

is much better known than that of our competitors. As a matter of fact, the Little Debbie brand

has a 98 percent awareness it the United States (littledebbie.com). The major benefit of all of

this is that the manager does not have to hard sell or worry about a surplus of products because

they are going to move very quickly. I can recall one customer saying that “they will not be back

in that store because they got rid of Little Debbie’s.”

Next, the manager has a desire for a broad product line under one brand name. Pepsi and

Coke offer several lines of drinks to satisfy several needs. Little Debbie also offers this in the

snack cake business. This gives a variety for people to choose from. We are always offering

new products and seasonal products for special holidays. The advantage to this is that you can

satisfy several customers that share different needs. This will ultimately satisfy the customers

and make Winn-Dixie more money.

Last, the manager needs promotions and display offerings at certain times of the year.

During holidays like Christmas there are more people shopping, and this is the time of year the

store manager can take advantage of gaining customers. The major advantages to us offering

him seasonal promotions like the one that I discussed, are that customers will buy more. The

benefits are really great from this type of promotion. The manager will decrease cost, decrease

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price, increase demand, and make more money. Who can argue with making more money while

selling more volume?

Features, Advantages, and Benefits Matrix

Prospects Need Feature Advantage Benefit1. Draw customersinto the store

Brings customersinto the store

People are going tobuy more

Increase Revenue

2. Profitable use of space

Make more moneyper square foot

Little Debbie will sellbetter compared toother brands.

This will help inmaking the storea low cost leader

3. Great Service The shelf and displays will stayfully stocked

You do not lose anysales.

Make moremoney

4. Relationship The buyer and sellerhave a close relationship.

The manager cancall me any timethat he needs something.

Trust, honesty,dependability,and compatibility

5. Need for his business to grow

Little Debbie attracts morecustomers.

Products that willsell.

Make more money and havepersonalrecognition

6. Products thathave a good reputation

People look for theLittle Debbie brand

Brand is better thanthe competitorsMore awareness

You do not haveto hard sell or worry about a surplus ofproducts.

7. A need for several snackproducts

Variety for different people

You can satisfyseveral needs of customers that sharedifferent needs

Satisfied customers andultimately makemore money

8. A need for displays andpromotions

Displays and salesofferings

This attractscustomers, and theywill buy more.

Decrease CostDecrease PriceIncrease DemandMake more money

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Profile of the Competition

Hostess:

Hostess’s major strength is the image of their Twinkie Golden Snack Cake and the

Chocolate Cup Cake (littledebbie.com). Even though this is their major strength, Little Debbie

has four products that sell more than they do. Another strength that Hostess has is the high profit

margin per product that they offer to the customers. The major weakness of Hostess is high

prices, and they do not sell a lot of volume (Holifield). We will sell a lot more of a variety at

lower prices, and we offer a much better overall profit margin. According to IRI Infoscan data,

Little Debbie holds seven of the top ten bakery snacks.

Krispy Kreme:

Krispy Kreme’s major strength is in the pastry-donut-coffee cake industry. They have

two products in the top three that consists of assorted donuts and plain yeast donuts. Although

this is true, the Little Debbie Honey Bun is still the number one product in this category with

Krispy Kreme’s two products ranking a distant second and third. Another strength that Krispy

Kreme has is the ability to locate local bakeries so that the pastries are fresh (Holifield). A

weakness of Krispy Kreme is that they are not as accessible as Little Debbie’s. Another

weakness is that they are a little high on their prices. Most people looking for this type of

product are very price sensitive.

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Multiple Attribute Analysis: Characteristics

Drawing customers toThe store

Little DebbieP I PxI

10 8 80

HostessP I PxI

7 8 56

Krispy KremeP I PxI

5 8 40Profitability 10 10 100 10 10 100 7 10 70Service 10 10 100 10 10 100 10 10 100Relationship 10 8 80 6 8 48 5 8 45Help business grow 10 10 100 6 10 60 4 10 40Reputable Products 10 8 80 7 8 56 10 8 80Broad Product Line 10 8 80 4 8 32 5 8 45Offer promotions anddisplays

Overall evaluation score

source: Holifield

10 10 100

720

5 10 50

502

5 10 50

470

As you can see from this multi-attribute model, Little Debbie has the upper hand in most

categories. Even though we are the best at most categories, there are still areas that we could

improve. It is our philosophy that we can find an improvement in every store that we go into.

These improvements could include new racks, relocation of racks, displays, better customer

service, building relationships, and even more. The fact is that if we set a goal to find an

improvement in every store, we will be able to offer our customer knowledge to not only grow

our business, but to grow his too.

ADAPT Sequence

Assessment questions:

1. What are your major objectives as a store manager?

2. How does Winn-Dixie lay out their chain of command starting with the store manager?

3. What is the day in the life of a store manager such as yourself?

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4. What is your current position in this area compared to other grocery stores?

Discovery questions:

1. Who are your current snack cake vendors?

2. How long have you been dealing with your current snack cake vendors?

3. How are the sales for these vendors?

4. Are you pleased with the service that you are getting from these vendors?

5. How often do these vendors offer you promotions or seasonal discounts for you to take

advantage of?

6. What disadvantages do you see from the vendors that you are using at this time?

Activation questions:

1. What happens if one of your vendors lets their shelf get empty?

2. What all do you have to loose if your shelf is empty?

3. How important is it to have displays up in front of the store?

4. What would you like more?

a. A product that had a large profit margin and sold very little?

b. A product that had a small profit margin and sold a lot?

5. How important do you think that a good buyer-seller relationship is?

6. Do you think that a product that has more awareness will sell better than one that doesn’t?

7. How important does this phrase mean to you “profitability per square foot”?

8. Are you currently having any problems drawing customers into the store?

Projection questions:

1. What do you and Winn-Dixie have to gain if the shelves stay full?

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2. What would it be like to for you to not only have displays up front but have displays that

would sell large quantities?

3. Would you like it if you could sell large quantities and make large sums of money at the same

time?

4. How much more profitable would you be if this was the case?

5. How would your business be affected if your vendor was there to help your business grow?

6. How much more could you sell if you had products that customers were more aware of?

7. What would it be like to say that you are making more money per square foot?

8. What would happen if you had products that would draw customers in to your store?

9. Do you think that they would buy other products (other than the draw-in products)?

Transition Questions:

1. So, having a vendor that keeps the shelf full is important to you? Being profitable per square

foot? Having displays that sell products? Selling large quantities while making large sums of

money? Our company helping your business grow? Having products that customers are aware

of? Helping you accomplish your organizational and professional goals? If I can completely

satisfy all of these needs, would you be interested in doing business with Little Debbie snack

cakes?

Anticipated Buyer Objections or Resistance

1. I have been doing business with my current vendor for 10 years.

Response: Little Debbie is Americas number one snack cake, and they are sold in 95% of all

supermarkets. I am not asking you to quit selling the other vendors snack cakes. I am simply

offering a proposal to have a larger line of products, and products that will move.

2. The profit margin per unit is not very good with your products.

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Response: Well, This is the focus on our products “Sell cheap, and sell a lot.” People really

come out and look for Little Debbie’s because they are so good and cheap. I know that

companies want you to reach sales in units and dollars. With Little Debbie, you can reach both

goals.

3. I can’t see giving you all of that display space because I have other products that need to be

on display.

Response: Sir, I will find an open space somewhere, and I can almost guarantee you that you

will make more money on Little Debbie’s. I will also give you a Feature Display Allowance that

will allow you to cut the price tremendously.

4. I just don’t see how Little Debbie’s will draw people into a supermarket.

Response: Little Debbie is a household name. Today, you know women don’t have the time

that they used to, and they are buying more convenience goods. A few months ago, I had a

customer that put up some displays in the front of his store. I gave him the same promotional

offerings that I would give you, and he ended up increasing his overall sales that week by 10%.

Little Debbie was a big part of that because we sold over 200 cases that week

5. I really don’t have time to discuss this with you today. My district manager is coming today.

Response: I understand. Although, I would like to come spend a few minutes with you

tomorrow or any time that is convenient for you this week. Would you please take a look at your

calendar and see what will be best for you?

6. How do I know that you will keep my shelf full?

Response: Well, the fact is you don’t know. The only way that you can know it to trust my

word and let me show you what I am capable of. You will find that I am here to help you grow

your business.

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7. I don’t have any space for you on the snack isle.

Response: Well, Little Debbie has an assortment of modern elegant racks, and we will supply

you with any rack and/or racks that you want. We have everything from end-caps to shop-

arounds. Here is a brochure with all of the racks that we have to choose from. Whichever one

that you want, I can get it in here by the end of the week. I would recommend the Little Debbie

Smile Island Shop-Around. It has been very successful in supermarkets like this one. I would

also recommend a snack rack to put by the cash registers

8. I need time to think it over

Response: Please, take all of the time that you need. However, I would like to keep in touch

with you. I believe that doing business with you will be a great opportunity for you to make

more money and increase customer satisfaction. I am leaving you a few brochures for you to

look over, and I look forward to meeting with you again real soon. I really appreciate the time

that you have given me.

9. I am really overstocked on snack food items.

Response: Well, are you having trouble selling the snack cakes that you are currently carrying?

Buyer: Yes, a little trouble

Response: You are not going to have that problem with Little Debbie. Little Debbie’s sell like

hot cakes. Most of the snack cakes that you have are either overpriced by the vendor, or they are

poor quality according to most customers. Little Debbie will give the customer a great price and

great quality, so you will definitely not have to worry about being overstocked.

10. I am willing to give you regular space; however I am not willing to give you any display

space.

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Response: At this point, I would take what I could get and run with it. After I got my product in

the store and proved that it would sell, I would make my move and try to get display space.

Even then it is possible that the buyer will say no. The key to this is to be patient but persistent.

I will always remember that a no today is not a no tomorrow.

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Work Cited

Holifield, Cliff. Personal interview. 21 February 2004

McKee Foods Corporation. Collegedale, TN. 27 February 2004 www.littledebbie.com.

Winn-Dixie. Jacksonville, FL. 27 February 2004 www.winndixie.com.

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