Saxonville sausage company

SAXONVILLE SAUSAGE COMPANYHarvard Business School

Company Background

70%

20%

5% 5%

Revenues

Bratwurst Breakfast sausageVIVIO Italian sausage Store brand products

Manufactured fresh pork sausage products

2005 revenues of about $1.5 billion

Sold via national and regional distributors, yet little presence in North-eastern markets.

Decision Makers

Anne Banks• Product Marketing Director

Steve Sears• VP of Marketing

Laura Bishop• Director of Market Research

Project Score• A team of 10 people from the R&D, Packaging, Graphic, Marketing and Sales Department.

Objectives of the company

• To launch a national Italian sausage brand to achieve the company’s profit objectives• To create a well thought out positioning plan to become a national

category leader.• To assess the Italian opportunity by doing ample qualitative and

quantitative research.

Objectives of the case

• To develop a new product for increasing profitability.• To understand the positioning of a new brand.• To make use of qualitative and quantitative research to understand

customers’ behaviours and needs.• To develop a distinct product to align its attributes and core values of

the customers.

Situation Analysis

• Vivio entered the Italian sausage market in 2002 in North-east where brats were not a staple food.• Was priced comparably to other regional competitors.• Positioned as “fresh Italian sausage” and “locally made” with an Italian flag on

the packaging.• Had an annual growth of 9% in 2004 & 15% in 2005• Brat sales had been flat; Breakfast sausage had a double digit revenue decline

in 2005• An extensive research was carried out to assess the Italian opportunity • Develop a national product to increase profitability and reduce cannibalization

Key Issues

• Should the product be developed under the Vivio name, as a new brand or utilize the Saxonville name to leverage the company’s brand equity?• What are the core values of the customers which can be incorporated

into the positioning?• How to prevent cannibalization of the company’s other products?• How to distribute outside the core geography ?

VIVIO’s Background

• It entered the Italian sausage industry in 2002 in the North-east where brats were not a staple food.• Was given an Italian name to overshadow the company’s German

heritage.• Was priced comparably to other regional competitors.• Initially sold through in-store sampling, discounts and deals to

establish itself.• Had an annual growth of 9% in 2004 & 15% in 2005

POSITIONING:• Fresh and locally made-Transparent packaging • Authentic Italian heritage-Italian flag on the packaging.

PROMOTION:• Base trade spending• Multiple facings

VIVIO SALES

Research and EvaluationSTEP 1:Planning new research on the target customers

• Formation of 4 mini pilot groups in a Pennsylvania research facility. Each group contained 4-6 users-men and women aged 25-50 who either used branded or store-brand products.• OBJECTIVE: To understand the benefits Italian sausage delivered.• Recruitment,Screening & selection of consumers for focus groups to

be conducted in selected locations. Women were the primary purchasers.• 103 women had qualified for the sessions.

Step 2:Findings from focus groups on Italian sausages

Italian sausage consumers by purchase

Heavy Users:Once a week during fall

& winter months.Once every 2 weeks

during spring & summer.

Medium users Light users: Once every 6 weeks

• Quick and enjoyable meal for family.• Cooking was done for evening dinners.• Considered a great meal-maker.Used as an

ingredient in sauces,soups.

VIVIO:• Considered to be of exceptionally

high quality and great taste.• “The Family Company”• However Bratwurst was a poor

brand name due to German heritage

• Vivio ranked 7th in a list of 20 brand names.

• Family connection• Clever Cooking• Confidence• Appreciation• Quick and Easy• Tradition

STEP 3:Building Positioning Concepts

• “Brand ladders” were built with a core value at the highest preference.

CORE VALUE: The woman doing a good job as a mother & a homemaker.• Four mock concepts were decided. Consumers were asked to select &

prioritize their favourites.“Family Connection” and “Clever Cooking” received the highest votes with Family connection receiving the most first-place votes.

Supporting tactics by other functional groups

STEP 4:Additional quantitative research• Field-testing of “Family connection” & “Clever cooking” concepts with

250 & 256 target customers to understand their likelihood to purchase.• Both concepts were viable.• Family connection had scored better due to the word “Italian”

implying family.

Italian sausage concept assessment

RecommendationsHow to launch and position a national Italian sausage brand to achieve the company’s profit objectives?

Family connection Clever CookingPROS:• Italian heritage resonates with the concept of

family and togetherness.• The woman is the magnet that pulls everyone

in.• 81% would definitely/probably buy• One of the core values of the target consumer

CONS:• Cannibalization of other products.• Common concept

PROS:• Projects herself as a good cook with her own

recipes• Can be used in different ways• Less cannibalization• 41% would definitely buy it.• Rated high in perceptual maps i.e. can be

associated with Family.• Easier to provide tactical support

CONS:• Does not align with the Italian family concept.

Clever cooking should be the brand positioning.

Should the product be developed under the Vivio name, as a new brand or utilize the Saxonville name to leverage the company’s brand equity?

• Vivio brand had matched the level of Italian sausage growth in the retail sausage market; Annual growth rate of 9% in 2004 & 15% in 2005.• Contributed to 5% of the Saxonville revenues.• It can help tap markets where bratwursts & breakfast sausages can be introduced• Through base trade spending and multiple facings, it has already made

distribution gains.• Loyalists considered Vivio brand to be of exceptionally high quality.• Vivio ranked 7th in a list of 20 brand names.• Saxonville Italian sausage received a mixed response and might not resonate

because of its German seeming heritageTherefore the new products should be developed under VIVIO brand.

What are the core values of the customers which can be incorporated into the positioning?

• Women were the target customers.• CORE VALUE: The woman doing a good job

as a mother & a homemaker.• In the perceptual map, Italian sausage

ranked high on family-pleasing.• So a woman can be portrayed in a positive

light by being a magnet that pulls everyone together who can come up with her own recipes and add a little zest to her dishes.

Core value: Good dinner experience

Emotional benefit:

Satisfaction

Functional benefit: Ingredient for multiple

dishesQuick and easy

High quality, good solid to fat ratio and color,great taste and texture

How to prevent cannibalization of the company’s other products?

• Instead of developing a new brand, the new products will be developed under the VIVIO brand without affecting the sales of breakfast sausages and bratwursts.• Repositioning and proper promotions of Saxonville’s products• New markets can be tapped with the help of VIVIO brand to sell

Saxonville’s products.• “Clever cooking” brand positioning.

How to distribute outside the core geography ?

• Once the fresh and locally made Italian sausages positioning is successful at a national level, the company can expand their business to frozen ,smoked and semi-dried sausages.• No national players.29 regional competitors.

Created by Santa Nibedita, CET Bhubaneswar, during an internship by Prof. Sameer Mathur, IIM Lucknow.

www.IIMInternship.com