As part of an assignment for my Business Marketing class I am supposed to start this blog. As a person who has never publicly published anything online(unless Facebook counts) then this is a first for me. I am normally fairly private and am breaking out of my turtle shell through this experience. I currently attend California State University of Monterey Bay (CSUMB), go Otters! I am a transfer student from Cabrillo College in Aptos, California. This being my first semester at CSUMB I feel a bit out of sorts and kind of like I am in a tornado. Everything is swirling around me and I am just trying to find solid ground, and gain an understanding of what is expected of me. So as the pieces of debris from my personal tornado fall to the ground, I hope they fall into place and help me to gain a better grasp of everything. If you are reading this then you have joined me on this endeavor.
Retailing and Wholesaling
“Retailing includes all the activities involved in selling products or services directly to final consumers for their personal, non business use.” (Kotler & Armstrong, 2012, p. 374) Many of the stores that we shop in are retail stores for example the stores at The Capitola Mall are retail stores.
There are several types of retail stores such as specialty stores carrying a limited product line such as Westside Beauty that only sells beauty and hair supplies or one of my personal favorites, See’s Candies. See’s only sells assorted chocolates and candies to consumers. There are also department store retailers. Such as Macy’s, JC Penny’s or Kohl’s. These stores carry clothing, bedding and home furnishings. Supermarkets sell groceries and products typically used in homes. Convenience stores such as 7-11 or Quickstop offer convenience items such as chip, soda or candy among other items that can be purchased quickly but the variety is limited. Discount stores such as the Dollar Tree offer items at a reduced price. Off- price retailers such as factory outlet stores allow consumers to purchase goods or clothing at a discounted price. Warehouse or wholesale clubs such as Costco make discounted bulk items available at cheaper price. A membership is required to chop at wholesale stores such as Costco. While superstores such as Walmart or Target try to incorporate grocery store and department stores to create supercenters.
Wholesalers usually sell products to retailers, wholesale stores or to industrial customers. The wholesaler is usually the middle man between the manufacturer or producer and the retail company and the products being sold are usually sold in bulk sizes.
Just as there are different types of retailers there are different types of wholesalers. Merchant wholesalers include full service wholesalers who provide a broad range of services and limited services wholesalers provide fewer services.
I have shopped at the Jewelry Exchange which is a limited wholesaler that provides wholesale jewelry directly from the factory. When buying from a wholesaler a wholesale business license was required.
Kotler, P., & Armstrong, G. (2012). Principles of marketing. (15th ed.).
Upper Saddle River, NJ: Pearson Education, Inc.
Entering Foreign Markets
When a company wants to enter a foreign market they must first decide how many different markets to enter and what marketing strategy the would like to use. There are several different strategies that can be utilized. The first strategy is standardized global marketing. This is where a company uses one marketing approach globally. For example Facebook is a global company and uses a similar marketing strategy worldwide. Facebook uses a “small team of content strategists working on some of Facebook’s most innovative marketing messaging.” (Global Marketing Strategy: Four Benefits to a Global Marketing Strategy, 2013) Facebook uses one marketing strategy to incorporate all aspects of the business, reduce cost and effectively service users.
The other marketing strategy for entering a global market is to adapt the marketing mix and strategy to the country that the product is entering. For example McDonalds uses the same menu layout but changes their menu to fit the local culture of the market they are entering. It is easier for some companies to enter a foreign market over others. For example Starbucks has had a difficult time entering the market in China. Starbucks coffee beans has such a high import tax when entering China that the product has to sell for nearly $5 a cup of coffee. Starbucks also had to change their product offering to fit a culture the mainly drinks tea not coffee similar to entering the market in India. This is one of the difficulties with entering a foreign market.
It is not uncommon for a company to have to change their product or their marketing strategy to fit the market they are entering. Sometimes a company will have to create a new product just to enter a foreign market. Other logistics that also need to be considered in a foreign market is pricing and how the product will be promoted with the language barrier being considered.
Kotler, P., & Armstrong, G. (2012). Principles of marketing. (15th ed.).
Upper Saddle River, NJ: Pearson Education, Inc.
Product Life Cycle Stages and Strategies
Product life cycle stages are important to how a product or service performs while in the marketplace. The life cycle stage a product is in will directly impact the sales and revenue of the product or service.
Development is the first stage. While a product is being developed it produces no sales and just costs the company money. During the development stage is when many of the product details get worked out and implemented.
There are several strategies that can be used to introduce a product into the market. The penetration strategy is ideal if there aren’t many competitors.
Skimming is the other strategy used to introduce a product or service to the marketplace. Skimming is when the price starts out high and gradually decreases. This is the strategy that is used by Apple. This strategy has not always pleased Apple’s consumers. When the first generation iPhone came out people paid high prices for them just to have a new model released less than a year later. “Some customers complained and some went so far as to write letters to Steve Jobs. Jobs issued a public announcement (that contained one of his patented “apologies-that-isn’t-really-an-apology”). Jobs apologized for letting the customers down and announced that all iPhone customers who paid the $599 price would get a $100 credit toward any purchase at an Apple retail store.” (When Is Skimming Price Strategy A Good Idea?, 2013) During the introductory period profits are usually relatively low.
When a product hits the growth stage, profits increase and market acceptance has been achieved. While a company pushes for product growth they will utilize advertising tools such as TV, magazine or print advertisements or even word of mouth to generate product awareness.
The maturity stage is where the product spends most of its life. It is important to set yourself apart from the competition during this stage. Establishing brand awareness and customer value relationships will help with continued sales. Profits level off at this stage so it is important to really push brand loyalty with consumers.
And the the dreaded decline is the least favored stage of the product life cycle. It is at this point that sales started to drop off and the product is no longer profitable.
So what happens when a product reaches the end of it’s life cycle? Several things can happen at this point. The product that is no longer profitable for a company can be discontinued, sold off to another company looking for acquisitions or it can be reinvented to bring new life to it. For example Ugg boots have been around for many years. I bought my first pair of UGg boots when I was in eighth grade (approx. 24 yrs ago), it was all the rage to have a pair. They only came in 3 colors brown, black and grey with a tall version and a low version. The trend died back and around 2000 the product re-emerged onto the market with boots, sandals, slippers and clogs. Today Uggs come in a variety of styles, colors and textures and are in high demand.
Personal Growth
It is important to understand the world in which we live in and how we are influenced by the things that surround us. I have learned lots in the class but it has not changed my core values. I still believe in my personal morals, ethics and religious beliefs but it has reaffirmed my belief in ethical practices. There are many times when we are faced with what is the ethical thing to do. Both Marketing and business face these dilemmas often.
I think that the most important ethical career goals are:
“Strive to serve the needs of customers. Avoid using coercion with all stakeholders.
Acknowledge the social obligations to stakeholders that come with increased marketing and economic power.Recognize our special commitments to vulnerable market segments such as children, seniors, the economically impoverished, market illiterates and others who may be substantially disadvantaged. Consider environmental stewardship in our decision-making.” (Ethical Norms and Values for Marketers, 2013) I also think that when it comes to having a career you have to have a continued appreciation for what you are doing, the influence you are having and the change you are making. If you don’t possess a desire to succeed then you will become complacent and not be doing the best you can.
Human nature sometimes gets the best of people. Behavioral influences can change an entire office culture. You can either be a leader and motivate your peers or you can be the person that doesn’t meet deadlines or goals. I think it is also human nature to be competitive, as long as that competitive edge doesn’t become an unethical situation then it is fine. When an employer gives its employees the power to influence their work environment, employees take more pride in their job and their performance. It is important for employees to behave as part of the company . This positive attitude becomes part of what people outside the company see.
Marketing and Business are both industries where core values can become nonexistent depending on people’s greed. I think it is important to recognize that no matter which role you play in the business or marketing world you have to stay true to your vision and morals. There are legal ramifications to unethical behavior but there are personal consequences that come with it as well. Colleagues and peers don’t forget unethical behavior, it can cost your company money and it may jeopardize any future you have in that industry.
Mental Module
Please follow my mental model starting in the top left corner to see the things that I have learned this semester.
Marketing Planning Video
Marketing Planning Final
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Muddy Buddy Bars |
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Marketing Planning Assessment |
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Ms. Carol Davis Bus 306 – Marketing |
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By: Joseph Goldberg, Susan Laccabue, Kirby Riecks, Siobhan Scott |
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11/17/2013 |
Table of Contents
Executive Summary. 4
Marketing Analysis. 7
Situation Analysis. 7
Market Summary. 7
Target Market. 8
Geographics. 8
Demographics. 9
Psychographics/Behavioral 10
The Market. 10
Market Needs. 10
Market Trends. 11
Market Growth. 12
SWOT Analysis. 12
Strengths. 12
Weaknesses. 13
Opportunities. 13
Threats. 14
Competition. 14
The Product: Muddy Buddy Breakfast Bar. 15
Product Offering. 15
Packaging. 16
Keys to Success. 17
Critical Issues. 17
Marketing Strategy. 18
Mission. 19
Marketing Objectives. 19
Financial Objectives. 19
Target Markets. 20
Family. 20
College Students. 20
Physically Active Single Adults. 20
Positioning. 21
Strategies. 21
Marketing Mix. 22
Pricing. 22
Distribution. 23
Marketing Communications. 23
Marketing Research. 24
Financials. 26
Break-even Analysis. 26
Sales Forecast. 28
Expense Forecast. 29
Controls. 32
Implementation. 32
Marketing Organization. 33
Contingency Planning. 33
References. 35
Appendix. 37
List of Tables and Figures:
Figure 1: Target Markets in the United States. 9
Figure 2: Distribution Process. 23
Figure 3: Promotional Mix. 24
Figure 4: Cereal Bar Sales Survey Results. 25
Figure 5: Ingredient Importance Survey Results. 26
Figure 6: Breakeven Analysis by Price and by Cost per Unit 27
Figure 7: Break Even Analysis Chart 28
Figure 8: Sales Forecast 28
Figure 9: Costing Analysis – Year 1. 29
Figure 10: Costing Analysis – Year 2. 30
Figure 11: Costing Analysis – Year 3. 30
Figure 12: Contribution Margin per Period – Year 1. 31
Figure 13: Contribution Margin per Period – Year 2. 31
Figure 14: Contribution Margin per Period – Year 3. 31
Executive Summary
A Muddy Buddy food bar will be introduced into the market place. The makers of Chex cereal, General Mills, have an existing product line called Muddy Buddy’s. Muddy Buddy’s are made with gluten free Chex cereal with a variety of added ingredients to create unique combinations. It comes in packaging and is sold as a dry snack mix. Muddy Buddy mixes in its assorted flavors are a favorite among many consumers and the Muddy Buddy line has expanded its flavors over the years. Consumers have posted on the Internet, recipes for making Muddy Buddy bars; up until now, no bars have been made by General Mills.
The food bar market is projected to reach U.S. retail sales of 8.3 billion dollars by 2016. The food bar industry is classified into two categories: cereal/granola bar and energy nutrition bar. Due to continued growth in the market, opportunity is sought within it. Muddy Bars will enter the market with competition from many well known cereal bar makers such as Kellogg and Nature Valley. Although there is stiff competition and the market is saturated with food bar products, Muddy Buddy bars will be differentiated by its classification as both a cereal bar and an energy nutrition bar and with specific nutritional benefits. Muddy Buddy bars will be gluten free, made with organic or all-natural ingredients, of substantial size, convenient and nutritious. Bars from Kellogg and Nature Valley are neither gluten free, organic, nor a larger portion size. Muddy Buddy bars will sell for an average cost of $1.49 per bar and be sized at 2.4 ounces each. While this cost is higher than its major competition in cereal bars, priced at just under $1.00 per bar, it is much lower than its competition for food bars that are gluten free, organic or all-natural and of equivalent size, priced at over $2.40 per bar.
Muddy Buddy bars will be targeted towards families, college students, people with gluten sensitivities and the healthy minded. Geographically, it will be geared towards major cities and their suburbs in the United States. All ethnicities will be targeted; however, a concentration towards Hispanics and single fathers will be used in its advertising and promotions. Hispanics are reported as higher users of food bars due to their higher percentage in the population and that they are more likely to have children. Single fathers are a growing niche and are often looking for convenience. While these two areas represent specific targets, overall targeting will include all on-the-go types such as families, college students, sports minded and singles. Not only are these groups looking for convenience, but they are also looking to find healthy alternatives at an affordable price. Muddy Buddy bars will meet all those needs.
Muddy Buddy has the benefit of brand recognition and consumer acceptance. In addition to these strengths, Muddy Buddy is a healthy snack, a trend that more consumers are moving towards. A weakness of Muddy Buddy will be its need to add a production facility modification and meet gluten free certification requirements. Lastly, although brand recognition exists for Muddy Buddy, its advertising campaign must focus on branding Muddy Buddy bar as a healthy meal alternative and not just a tasty snack. The opportunities Muddy Buddy bars have in the industry is substantial as the food bar industry is experiencing continued growth. Furthermore, society is on the move and convenience is an important factor. Threats for Muddy Buddy bars are the saturated marketplace and the importance of differentiation. A consumer has an abundance of options for this type of product. Creating and maintaining interest and loyalty to a Muddy Buddy bar will have its challenges.
The mission of Muddy Buddy bar is simple. “We aim to be the go-to meal alternative for people on-the-go by providing a healthy, gluten free, organic and delicious food bar.” The marketing objective will include capitalizing on brand recognition, product awareness, and gaining substantial market share. The slogan, “Don’t be nutty, grab a Muddy Buddy” will be reinforced to keep it in the minds of the consumer. The goal is to maintain it in the minds of the public and to brand it as a healthy, convenient, meal alternative. Its image will be promoted for instant recognition to remind the consumer of its convenient, healthy and delicious benefits. Gaining market share and increased sales will be the primary marketing objectives. This will be done through target marketing towards families, healthy minded, on-the-go individuals, Hispanics, single fathers, and gluten sensitive people.
Start up costs will consist of product line extension, production facility reorganization and customization as well as advertising and promotional expenses. Sales are projected for the first year to reach almost 24 million in unit sales. Year 2 and Year 3 sales are expected to increase up to 31.2 million and 40.5 million units, respectively. Sales forecasts for the first year represent fluctuations in each of the first four quarters as exposure and acceptance of the product affects the market. Initially, due to consumer curiosity, it is expected that sales will be strong. Sales are projected to show a substantial increase as consumers become aware of the product and are motivated by its price and taste. As the Muddy Buddy bar product gains recognition and word-of-mouth advertising takes place, sales will continue to rise. As consumer target groups such as college students and single fathers are lured into the food bar industry and food bar enthusiasts loyal to current brands sample Muddy Buddy bars, sales and recognition will increase.
Marketing Analysis
Situation Analysis
We propose to introduce a food bar into the market that would capitalize on the booming industry and the popular gluten free Chex product called Muddy Buddy’s. The food bar market is classified into two categories: cereal bar/granola bar and energy nutrition bar (PR Newswire, 2012). The U.S. Food Bars market is projected to reach $8.3 billion in U.S. retail sales by 2016 (Press, 2013). Due to continued growth in this market, we seek opportunity within it. We will introduce a gluten free bar that can be classified as both a cereal and a nutrition bar with new innovative flavor combinations.
Chex currently offers a variety of Muddy Buddy recipes online. There are many home consumers who create this product on their own. By creating it for them, our product will enter a market that is already booming. Using the already successful Muddy Buddy recipes, we will develop a product in a convenient to-go form. This bar will be a cereal bar, with its ready to go convenience, and energy bar, catering to healthy minded individuals seeking a nutritional option. Our bars will be a mix of organic and/or natural ingredients and cater to those who have gluten sensitiveness. Although reportedly under diagnosed in the U.S., people currently diagnosed with gluten sensitivities account for approximately 6% to 7% of the population, which is roughly estimated at 20 million people in the U.S. alone (Anderson, About.com, 2013). Additionally, our bars will help the consumer practice portion control by establishing an appropriate serving size. This allows for ease of consumption, without over-indulgence.
Competition in the market is strong, with Nature Valley being the leader in the industry (Statista, 2013). However, our product will carry an advantage because of its gluten free differentiation, Chex current brand recognition, and consumer motivation towards variety and alternative healthy options.
Market Summary
The food bar market began in early 2000 with retail sales reaching record levels in 2006-2007 to $1.7 billion (Purcell, 2010). Although it suffered a brief stagnation in 2007, it is once again growing. Its sales flattened in 2008 and remained flat through 2009. The declining economy and a movement towards healthier alternatives were the cause (Purcell, 2010). In 2011, food bar sales reached record levels with retail sales at $5.669 million per year (Press, 2013). In 2012, retail sales increased once again at a rate of 9.6% to $6.211 billion per year (Press, 2013). Again, projections are expected to reach new levels in 2016 to $8.3 billion in retail sales.
We will market our product towards families with children, college students, physically active single adults, people with gluten sensitivities and the healthy minded. Parents with young children are looking for a quick and easy way to incorporate breakfast into their morning routine. College students and physically active single adults tend to lead busy schedules and are looking for a quick energy alternative. People with gluten sensitivities are becoming more aware of product alternatives that are gluten free. Healthy minded people will be motivated by our product as more Americans are following the megatrend that smaller food portions eaten frequently throughout the day leads to a better health (Packaged Food, 2013).
The geographic area to market our product will be within major cities and their neighboring cities. These regions are more densely populated with families, college students, singles, and the health conscious consumer. Within these densely populated areas, Muddy Buddy Bars will target all ethnicities, although it is recognized that statistics report a higher rate of food bar consumption among Hispanics. This is largely due to the higher rate of Hispanics in the overall population and that Hispanics are more likely than the population as a whole to have children (Heller, 2006). Food bars have proven to be a product bought by all types of people, regardless of ethnicity and culture. Although ethnicity is not a factor, our consumers will most likely maintain certain lifestyles. They will be on-the-go type personalities looking for an easy substitute for a bowl of cereal or quick snack during the day (Statista, 2013). They will be early risers looking to minimize the morning routine. Lastly, they will be families with children.
Target Market
Geographics
The geographic areas our product will appeal to primarily are cities and their surrounding suburban cities. These areas have a higher population density and appeal to the determined target market. The urban areas will host singles, and the on-the-go types, whereas the suburban areas will host more families with children. Muddy Buddy’s is an established brand with its products already on store shelves. We will introduce the Muddy Buddy bars into retail grocery stores as an expansion of its Muddy Buddy line. Figure 1, Target Markets in the United States, shows the major cities in the United States. This will be the target focus and will include surrounding cities.
Figure 1: Target Markets in the United States
(Beattie, 2012)
Demographics
We will target families looking to add a healthy snack to their children’s lunchboxes and active individuals and students because they are typically looking for snacks on the go. This bar will also appeal to the health conscious and endurance athletes due to the portability of the snack. It is great for individuals with gluten intolerance as many cereals and snack bars contain gluten. Since it is targeting people on the go, it will appeal to families who own homes, as they are likely to have children or be employed, and individuals looking for a quick meal. Students in college or young adults recently living on their own will purchase this product because it is a quick snack and easy to consume on the go. Consumers have “cited reasons for eating cereal bars were to replace meals or as a snack, consumers also state they use bars for weight loss, as an energy boost, and to maintain metabolism or blood sugar” (Heller, 2006). Furthermore, Hispanics and parents with children are two demographics that are heavy consumers of food bars. Marketing research shows that the food bar market is typically targeted to men between the ages of 18-24, and that [single] dads are left out (Wright, 2011). Targeting attention towards single fathers and Hispanics will open up additional segments that are potentially untapped.
Psychographics/Behavioral
The social factors impacted will be reference groups, family, role, and status. Because we expect to see Muddy Buddy’s in lunch boxes, gym bags, on hand in cupboards, and available in all box stores, we anticipate the stated reference groups to be highly influential. Buying influence from family such as the mother or father will be a primary focus in our marketing campaign. The roles and status to focus on will be the health minded, active and hard working professionals. With the influence of healthy active people we can spread the word of how Muddy Buddy Bars should be perceived. The perception of Muddy Buddy’s should be a healthy on-the-go meal replacement. Gaining such recognition with the brand will change the nature of how the product is viewed.
Consumers with celiac disease look for a gluten free diet. Gluten causes inflammation in the small intestine of people with this disease (Mayo Clinic Staff, 2011). Our product is not only gluten free, but offers all-natural and/or organic ingredients. Informing the population about the benefits of a gluten free product will be something to sell our product on.
Another behavior focus of our campaign will be based on budget and pricing. The target market includes professionals, students, singles, and families. The pricing structure must appeal to each of these classifications and also be competitively priced. The product will be available in single serving, 2.4 ounce bars. It will be packed for individual purchase as well as discounted bulk buying. It will be promoted with discounts and promotional incentive pricing strategies.
The Market
Market Needs
A market survey was conducted using Survey Monkey. Several questions were asked, one of which was, “What would make you most likely to use our product?” Of the 68 people questioned, the responses indicate that a healthy, good tasting, low calorie, and gluten free product would be appealing. The following is an example of typical feedback:
10/16/2013 1:23 PM – Good taste and texture
10/16/2013 1:08 PM – Knowing the nutrition content, especially the protein and carbs/sugar levels.
10/16/2013 1:05 PM – Gluten free ingredients
10/15/2013 11:08 AM – healthy snack/low calorie
(Goldberg, Laccabue, Riecks & Scott, survey, October 2013)
These responses are a reflection of what a customer expects of a cereal bar. Muddy Buddy’s will meet this expectation. Chex Rice cereal is gluten free and Muddy Buddy bars will maintain itself as a gluten free product. Muddy Buddy bars will also be protein packed, a good source of fiber, and low-calorie. See the Appendix for the entire survey results.
Market Trends
Food bar sales have and continue to boom in sales. As previously supported, sales of food bars are expected to reach $8.3 billion in retail sales in 2016. Muddy Buddy bars may influence the current market trend by being flavorful and healthy. Many diet bars lack taste and do not fill a dieter’s desire. “Flavor is the number-one influencer of brand selection for all types of bars. Cost is nearly as important a decision factor as taste” (Purcell, 2010).
Muddy Buddy bars will influence the health conscious consumer, as it is a gluten free product. Diet restricted buyers may gravitate to a new option in gluten free consumption. With many people following the diet trend of gluten free living, consumers can still eat Muddy Buddy’s without concern. People with celiac disease are unable to eat gluten without health complications. It is reported that one out of every 133 Americans has Celiac Disease, that 97% of Americans that have it have not yet been diagnosed, and that the U.S. Department of Agriculture projected that the gluten free industries revenue will reach $1.9 billion by 2012 (Statistic Brain, 2013). In reality, this market reached $4.3 billion in 2012 and is expected to reach $6.6 billion by 2017 (Stone, 2013).
Convenience and packaging are leading trends in the retailer industry. (Burfield, 2013) Single portions and convenience are both important factors for people looking for a quick and easy option. It is important that packaging maintains brand recognition, nutrient information, and non-plastic material (Burfield, 2013).
Breakfast itself is becoming more important as people realize that it is the most important meal of the day. Studies show that children perform better during the day and have less behavioral issues when they start the day with a meal (Aubrey, 2006). Furthermore, since keeping blood sugar stable is the key to optimal wellness, starting off the day with breakfast is crucial (Lempert, 2012).
Market Growth
While, the food bar market remained flat in 2008 and 2009, it is back and setting record numbers in sales (Press, 2013). Muddy Buddy’s bars are a great alternative to the morning meal or anytime during the day. Targeting attention towards single parents, particularly fathers, and family oriented Hispanic cultures, will open potentially untapped revenue opportunities.
SWOT Analysis
Strengths
Healthy Snack – Consumer trends lead toward healthier snack alternatives. Muddy Buddy’s are gluten free and can be developed to be a low-calorie healthy alternative for those who have gluten sensitivities.
Brand Recognition – Muddy Buddy’s are already a popular choice at parties and events. The popularity of a new Muddy Buddy and Chex product will have wide appeal and acceptance due to its familiarity.
Consumer Acceptance – There are literally hundreds of Chex mixes in the market place with a high a degree of acceptance. Consumers have created blog sites and recipe reviews on Muddy Buddy bars that they personally developed. By listening to what consumers want, Chex can capitalize on the demands of consumers.
Proprietary Blend Established – Muddy Buddy has already established its proprietary blends. With over 300 mixes on the market, selecting a dozen or so flavors for development would be just a matter turning its snack bags into snack bars.
Weaknesses
New production facility/modification – Chex will need to add an additional line to its production facility to accommodate the development and packaging of Muddy Buddy bars. Capital expenditure will be needed to accommodate a new line extension.
Gluten-free certification – Requirements will need to be established and met. The level of certification is established by the Celiac Sprue Association, which has the most stringent standards of the three primary certification boards. Food must meet the requirement of less than five parts per million of gluten and be free of oats, including gluten free oats (Anderson, 2012).
Defined target market – Recipes and blogs devoted to the creation of Muddy Buddy bars can be found online. This indicates that a desire for this product is already established. However, it is important to gain more popularity with more adults and those who seek healthy snack alternatives. A defined target marketing campaign will be needed in order to raise more popularity among students and other target markets.
Opportunities
Growth in cereal bar markets – The popularity of cereal bars in the United States has become increasingly more consistent (Statista, 2013). Companies in the market place have realized continued growth in cereal bar sales, in spite of the 2007 stagnation (Statista, 2013). Retail sales have again gained momentum with 2013 showing record sales and sales projections rising (Press, 2013).
Society on the Move – Convenience is a growing trend in busy consumer lifestyle (Burfield, 2013). As people and families take on more responsibility, the tendency is to grab food on the go. Although most people do not have the time to prepare meals, they are still moving towards healthy alternatives (The Nielsen Company, 2010).
Worldwide distribution – E-commerce and increased use of the Internet has allowed companies to grow and expand nationally and internationally. Muddy Buddy’s is a popular United States product, created by Chex in 1996. It was originally distributed as a seasonal mix, but with gained popularity, it was introduced as a year round blend. With distribution channels opening up, national and international sales and Muddy Buddy popularity can grow. (Hunt, 2010)
Threats
Saturated Marketplace – The marketplace has many cereal bars on the market. Even though it is a growing market, there is a point of saturation. Determining if the market has reached its saturation will be an important criterion.
Differentiation – Identifying itself in the marketplace will be a challenge due to the saturation of competing brands in the cereal bar market. In order to stand out from its competitors, Chex must offer a unique product. Muddy Buddy’s focus on gluten free, organic and natural ingredients, and substantial serving size lead to differentiation.
Competition
“General Mills, the maker of Chex cereal is the largest food company in the world.” (Hoovers A D&B Company, 2013) . Rice Chex cereal is the main ingredient in Muddy Buddy bars. General Mills has several competitors when it comes to cereal bars.
- Kellogg’s brand is General Mill’s toughest competition. Kellogg’s manufactures Special K Cereal Bars. Kellogg’s markets these bars in the grocery store in the cereal aisle. It uses aisle end caps during the start of the year to promote Special K as a low-fat way to trim the waistline. Special K commercials air at a higher frequency during times of the year when people are eating more, such as Thanksgiving and Christmas. This reminds consumers to use them as a meal replacement. Special K has tried to create a synonymous image with fitness. It does this through its various give-away sweepstakes, fitness challenges and packaging design. Special K Cereal bars are priced competitively at $5.98 for a box of six 1.59 ounce bars (Safeway, 2013).
- Kellogg also markets Kashi cereal bars. Kashi is marketed as part of a macrobiotic diet. “The company advertises their products as a blend of seven whole grains and sesame and emphasizes high protein and fiber content (Kellogg Kashi, 2013).” While Kashi is not as prominent of a name as Special K, it has a solid place in the cereal bar market. Kashi is promoted through television commercials as well as print ads in Parenting magazine and can be found in the cereal aisle at the grocery store. Kashi’s all-natural cereal bar is priced competitively at $5.36 for a box of six 1.2 ounce bars.
- Nature Valley Cereal bars is also made by General Mills creating self-competition. Nature Valley Cereal bars were the “company’s first attempt at a 100 percent natural ready-to-eat cereal.” (General Mills, 2013) Nature Valley cereal bars are marketed as a healthy, convenient bar for the person on the go. Nature Valley Cereal bars are promoted alongside other Nature Valley products often in a buy one gets one free promotion. Nature Valley cereal bars are priced reasonably at $4.60 for a box of six 1.2 ounce bars (Safeway, 2013).
- A lesser known food bar on the market that is gluten free, organic and is offered in a substantial serving size is made by a company called, Perfect Food Bar. It is a family company started by a health enthusiast in San Diego, California. It offers five distinct flavors in 2.5 ounce single serving portions at $2.43 per bar. It markets its product in a handful of sports facilities and health food markets (Perfect Food Bar, 2013).
Although the first three competitors are leaders in the cereal bar market with pricing averaging slightly under $1 per bar, Muddy Buddy Bars, being offered at $1.49 per bar will provide a larger portion serving size at 2.4 ounces per bar and organic and all natural ingredients. This pricing differentiation will be supported as its size and substance will be considered a healthy meal replacement, as well as a snack or meal supplement. The last competitor on the list is an example of a comparable bar in terms of its organic gluten free ingredients, yet its pricing strategy is well above the range of Muddy Buddy’s entry into the market.
The Product: Muddy Buddy Breakfast Bar
Product Offering
Muddy Buddy bars are a low calorie food bar. Muddy Buddy bars ingredients consist of:
- Gluten free Chex cereal
- Rice
- Salt
- Sugar
- Molasses
- Vitamin E
- BHT (preservative)
- Vanilla
- Semi-sweet chocolate
- Unsweetened cocoa powder
- Butter
- Powdered sugar
- Peanut butter (All-natural)
Muddy Buddy bars are made of Rice Chex cereal, a gluten free low calorie snack. A combination of organic semi-sweet chocolate and unsweetened cocoa powder is combined to make a low calorie chocolate coating. The chocolate coating is combined with all-natural peanut butter and it includes honey instead of high fructose corn syrup and oil. Peanut butter is a “combination of fiber and protein that fills you up and keeps you feeling full longer, so you eat less overall” (Perry, 2012). Then, butter and vanilla are combined with the chocolate coating and peanut butter to drench the Chex cereal and hold the shape of the bar. The bars are then lightly dusted with powdered sugar to give flavor, eye appeal, and add texture to the product.
Packaging
Packaging will be in two different forms: individual serving and bulk. Individual serving will be packaged in foil. A package of six individual servings will be combined to make a standard bulk product packaged in a cardboard box. Bulk quantities will be promoted in warehouse stores in packages of four bundled standard boxes. Each individual foil wrapper will include the name, the slogan, “Don’t be nutty, grab a Muddy buddy,” nutritional information, and the Muddy Buddy brand recognition. The cardboard box will indicate the same information as the foil packaging as well as the number of servings per container and a section regarding Muddy Buddy benefits and gluten free awareness.
Keys to Success
There are several factors that will make Muddy Buddy bars successful. Muddy Buddy bars are made of Chex cereal, which is wholesome and nutritious. Muddy Buddy bars are relatively mess free, convenient, and a quick and nutritious snack while on the go. The wrappers can easily be disposed of after consumption. With America’s busy lifestyle many people do not take the time to stop what they are doing to eat, yet they strive to maintain a healthy lifestyle. A Muddy Buddy bar allows people to continue their “on-the-go” lifestyle and keep healthy.
A more important marketing factors relating to Muddy Buddy bars success is its gluten free ingredients. With the numbers of people on a gluten free diet, and the numbers yet to be diagnosed, the target market for Muddy Buddy bars is likely to expand. In America alone, there are currently “2.4 million people on a gluten free diet” (CBS News Staff, 2012).
General Mills strives to be “among the most socially responsible food companies of the world” (General Mills, 2013). It works to reduce its environmental impact and contribute to the communities that surround it by addressing social and environmental change. General Mills contributed over “$118 million to charitable causes during the fiscal year in 2011, amounting to more than $2 million each week.” (General Mills, 2013) General Mills continues its “Box Tops for Education” program to help fund schools through the purchase of its products. This type of customer equity creates a positive relationship with its consumers.
General Mills has strong branding. General Mills products are sold globally which will allow global expansion of Muddy Buddy bar sales.
Critical Issues
The critical issue Muddy Buddy bars face is its entry into a market saturated with food bar competition. The food industry has an abundance of packaged goods creating greater barriers for new products entering the market. Creating and maintaining an interest in Muddy Buddy bars will come with challenges. Obtaining customers loyal to their existing brand or product has challenges. However, presenting a product that currently maintains its own brand recognition as a snack mix will encourage consumers to branch out and sample it as a food bar. In addition, its substantial serving size and gluten free properties will add interest. Muddy Buddy bars will make an effort to target new consumers into food bar consumption by promoting its convenience and health benefits.
Marketing Strategy
The primary strategy will be to focus on the uniqueness of the Muddy Buddy bar. There are many food bars in the marketplace, but few are gluten free, organic and/or all natural and offered in a substantial serving size. People who desire our product are on-the-go type people, looking for a healthy yet convenient way to satisfy their hunger. Because our bar is a nutritious and low calorie food bar with ideal ingredients, we fit right into that mold.
Social media and the Internet will be used to promote and bring awareness to the Muddy Buddy product and its unique benefits. Key words will be identifiable on our websites allowing people using product searches to find Muddy Buddy bars easily. Social media sites will be used as well as ad placement on social media sites. Ease of access to information will be a primary focus at the early stages of our development, and utilizing a variety of media will allow for more exposure.
Television advertising will be used as well as coupon and supermarket display promotions to bring about more awareness to General Mill’s new product. Fitting into already existing General Mills advertising campaigns will be a direct emphasis for Muddy Buddy bars. A marketing slogan will be used to identify the Muddy Buddy bar as well as specific branding with its package design.
Muddy Buddy bars offer an easy, affordable alternative to help satisfy hunger and energy needs. We create a healthy mix of gluten free, yet tasty ingredients forming one of the best food bars in the market. Consumers with on the go lifestyles will be satisfied because of how easy it is to eat, and the benefits it offers.
- Gluten free
- Conveniently packaged
- Delicious
Mission
We aim to be the go-to meal alternative for people on-the-go by providing a healthy, gluten free, organic and delicious food bar.
Marketing Objectives
Marketing objectives will include capitalizing on brand recognition, product awareness, and gaining a substantial market share. Brand recognition will be focused on maintaining itself in the minds of the public. General Mills is a widely known brand and Muddy Buddy’s has an established name. However, more effort will be made in branding Muddy Buddy bars to promote health, convenience, and gluten free ingredients. Word-of-mouth marketing will be utilized, as many parents tend to rely on the advice from their friends.
Product awareness will be utilized by promoting convenience, flavor, and its gluten free benefits. Convenience will be a primary focus as survey results showed 27% of those sampled found convenience to be extremely important and 26% found it to be very important when choosing a cereal bar. It also showed that 22.73% are very active while 33.33% are moderately active (Goldberg, Laccabue, Riecks & Scott, survey, October 2013). Since flavor is the number one factor in choosing a cereal bar we will be counting on it to ensure customer satisfaction and return customers (Purcell, 2010). And lastly, as the public becomes more aware of gluten free benefits, Muddy Buddy’s gluten free ingredients will motivate consumers.
Gaining market share and most importantly increased sales will be the primary marketing objective. This will be accomplished through target marketing towards families, healthy minded, on-the-go individuals, Hispanics, single fathers, and gluten sensitive people.
Financial Objectives
Start up costs will consist primarily of product line extension, production facility re-organization and customization, and advertising and promotion expenses. Total costs in the first year of production are expected to be $16.0 million. The financial plan for Muddy Buddy includes projected revenue in the first year at $35.7 million in retail bar sales. Revenue is based on first year sales of 24.0 million in individual unit output. Year 2 sales are projected at 31.2 million actual output and year 3 sales are projected at 40.5 million actual output. Due to the number of competitors in the industry we don’t expect to take a large percentage of the market in the first 3 years. However, even with less than 1% of an 8 billion dollar industry, sales and ultimately profits will be substantial. The profit margin percentage is calculated at 51% in its first year. This calculation is based on total costs divided by total revenue.
Target Markets
Family
The family is a primary target market as statistics reveal it is a vast consumer of food bars. Family life is busy and often times finding time for a meal is difficult. Families may find themselves going to school, practice, music lessons, vacations, or simply spending time together, but not always with the convenience of being at home. Muddy Buddy bars are an ideal snack to sustain the family while on the go. With its healthy, yet good tasting bars, children will be likely to enjoy its taste and parents will appreciate the lack of mess it offers. Among this target group will be Hispanics and single fathers as these are growing segments and established consumers of food bars.
College Students
The Muddy Buddy bar is a healthful alternative to the college student who tends to eat fast food out of convenience. Not only does this cost add up in expense, but it is not a healthy alternative and weight and well-being may be compromised. Convenience is a priority for the college student who is less inclined to want to make a meal. Marketing food bars towards these students who need a lift at certain points in their day, but don’t want to get caught up in the constant fast food cycle, will boost Muddy Buddy’s success. Students are busy with class, homework, and often employment obligations. With the availability of a convenient bar as a healthy snack, they can maintain their energy level.
Word-of-mouth marketing will be especially valuable with college students. This type of marketing will be a focus of the marketing strategy. College campuses are areas of condensed populations, and word spreads quickly.
Physically Active Single Adults
Similar to the college student and family unit, physically active singles tend to include people who spend less time in the kitchen. Physically active singles may be engaged in activities such as running, biking, swimming or other outdoor activities. These endurance activities require refueling. To match their on-the-go activities a Muddy Buddy bar is a healthy snack choice.
Positioning
Muddy Buddy bars will be positioned in the food bar category. Muddy Buddy’s will be sold in stores alongside other cereal and food bars. Muddy Buddy’s will position itself as a go-to meal replacement for people seeking a healthy, substantial, gluten-free meal for themselves and their family. There are many other food and cereal bars on the market yet Muddy Buddy bars will differentiate itself from the competition and in the minds of consumers by being a gluten free, organic and low calorie food bar. Muddy Buddy’s position in the market will allow consumers with dietary restrictions to shop conveniently at larger grocery stores, such as Safeway and Albertsons, for a product that fits their budget and priorities. By offering a more-for-more product, Muddy Buddy bars will outshine its competition. More product, better ingredients, and bigger serving size are offered at more than its competition.
Strategies
The Muddy Buddy market strategy is focused on health and convenience. The primary target market is consumers with dietary restrictions that require food products to be gluten free, endurance athletes looking for a healthy portable meal, and families looking for convenience with nutritional benefits. The secondary target market is Hispanics and single fathers. Studies show these demographics as untapped target markets and heavy consumers of food bars due to their likeliness to have young children (Smith, 2013). Targeted will also be people on the go, students in college or young adults recently on their own. Muddy Buddy bars will cater to their quick moving busy lifestyle.
The objective is to make Muddy Buddy food bars a convenient choice for the busy consumer. Muddy Buddy bars will have a competitive edge since it can be marketed within the existing food bar market as well as the gluten intolerant food market.
Advertising will be done initially with saturation of five different marketing strategies including: Taste trials, coupons, promotions, television and magazine advertising.
Muddy Buddy bars are to be introduced to the market through various means including taste trials at various wholesale markets including:
- Sam’s Club
- Costco
- Wholesale Food Outlets
Introductory coupons and promotional discounts will be offered at supermarkets nationwide such as:
- Safeway
- Vons
- Nob Hill
- Kroger
- Albertsons
- Wal-Mart Superstore
- Target
- Foodmax
- Savemart
Television advertising will be utilized maximizing time slots aimed at viewing schedules of families such as early evening and Saturdays. And finally, magazine ads will be strategically placed in parents’ magazines in English and Spanish and in health magazines. A follow up to the initial saturation will be staged releases of each advertising method with heavier emphasis on magazine and promotional coupons.
Marketing Mix
Pricing
The suggested retail price for Muddy Buddy bars will be $1.49 per bar. Pricing is determined based on what the market will bear, what its competition charges, and the desired profit margin sought. Food bars are sold in a variety of ways, at various prices, and with a full range of benefits and ingredients. Muddy Buddy is motivated to price itself between the leading, yet smaller serving size bars, such as Kashi and Nature Valley, and the more expensive health food store bars such as Perfect Food Bars. Muddy Buddy is looking to provide distinction with its bar providing a widely available, less expensive alternative to a healthy food bar. It is estimated that Muddy Buddy bars will result in a 51% profit margin in the first year. This is a motivating profit margin and allows room for additional advertising, and unforeseen start up costs, expansion, or other expenses. Analysis shows that bars must be sold at no less than $.78 per bar in order for breakeven to occur in its first year. Breakeven results when revenue equal fixed and variable costs based on unit sales of 24 million bars.
Distribution
Muddy Buddy bars will reach consumers through a six tiered distribution process. A bar code system will be used to track products through each distribution channel. Cases of Muddy Buddy bars will be packaged, coded and shipped in flats to the distribution center. Each case will be inventoried and tracked at the distribution center and then shipped to its designated wholesaler. The wholesaler will distribute and track its shipment to its designated retailer. Additionally, a bar code will be included on each box for retail inventory tracking. Bar coding will track inventory and allow for efficient tracking and distribution through the distribution channels. Below, Figure 2: Distribution Process, illustrates each tier of the process.
Figure 2: Distribution Process
(Goldberg, Laccabue, Riecks & Scott, November 2013)
Below, Figure 3: Promotion Mix, shows the three approaches of the marketing communication to be utilized and includes: sales promotion, personal selling and advertising.
Marketing Communications
Figure 3: Promotional Mix
Muddy Buddy bars will use an emotional approach to marketing to gain consumer support. The idea is to develop a relationship with the consumer by promoting Muddy Buddy bars for the average, everyday, health conscious person. Muddy Buddy bars will be offered as a product that can be easily incorporated into a person’s daily life, while supplying the energy needed to get through a busy day. Personal selling will be done by sales representatives of General Mills to retail outlets in order to set up and establish its new product on the shelves. New shelf space and advertising plans will be negotiated and arranged. Paid advertising will be done using television and magazine advertisements. These advertisements will focus heavily on brand recognition, Muddy Buddy’s gluten free benefits, and convenience. Advertising will be directed towards families, with influence towards Hispanics and single fathers. Additionally, paid advertisements will be featured in health magazines and college centered resources. Sales promotions will be used in various combinations in strategic locations and will include samplings, promotions, and coupon offerings. Samples will be offered in various box stores and supermarkets as well as campus centers and targeted mall outlets.
Marketing Research
Marketing research was done using a survey and analyzing trends in food bar sales. After review of the food bar sales it is concluded that although substantial competition exists in the food bar sales market, the market is experiencing continued growth in sales as well as trending interest in gluten free products. In addition to these strengths, Muddy Buddy’s has established itself as a known product on the market and carries strong branding through General Mills. Figure 4: Cereal Bar Sales Survey Results, shows 60% of those surveyed would be interested in a Muddy Buddy bar.
Figure 4: Cereal Bar Sales Survey Results
Would you be interested in a Muddy Buddy cereal bar?
(Goldberg, Laccabue, Riecks & Scott, Survey, October 2013)
It will be important to conduct follow-up surveys to determine continued interest in Muddy Buddy bars once the initial saturation in the market place has been established. A further survey will disclose any shifts in Muddy Buddy bar awareness and whether interest has increased or decreased. This information will be useful in determining the target market focus and its effectiveness.
The initial survey addressed the importance of convenience when it comes to food bars. Only 6% of the people found convenience not to be important whereas more than half found it to be very or extremely important. Figure 5: Ingredient Importance Survey Results show that 31% of those surveyed felt ingredients were moderately important and 53% felt ingredients were very important or extremely important.
Figure 5: Ingredient Importance Survey Results
How important is convenience when choosing this type of product?
Financials
With an estimated two million individual units sold per month, the financial outlook for Muddy Buddy bar sales is substantial. It is estimated that first year sales will be 24 million units sold. Revenue will be $35.7 million with expenses at $16.0 million. Profits are estimated to be $17.3 million in the first year of sales. Breakeven analysis shows that price per unit must be no less than $.78 per bar. Muddy Buddy bars will be sold at an average price of $1.49 per bar. Although coupons, samples, discounts and bulk packaging will be offered, the profit margin in the first year is estimated at 49%. Marketing costs will consist of marketing managers, sales staff, sales promotions and discounts and advertising costs. Variable costs will account for $.555 per bar. Of this, $.062 accounts for marketing sales expense and promotional expense. Fixed costs are budgeted at $3,106,500 in Year 1 and include $2.4 million in paid advertising costs. Flooding the market with television and magazine advertising will be essential to facilitate Muddy Buddy bar awareness.
Break-even Analysis
Figure 6: Breakeven Analysis by Price and Cost per Unit, demonstrate two approaches to estimated breakeven calculations. Breakeven analysis by price includes a price breakdown for fixed versus variable costing. The number of units sold in the first month, quarter and year are broken down to show that pricing must be targeted above $.78 per unit to generate a profit. By setting profit to zero, unit price can be determined based on units sold of 2.0 million per month.
A secondary analysis shows a minimum of 3,322,460 units must be sold in Year 1 to cover variable and fixed costs. Unit sales for Year 2 and Year 3 must be a minimum of 2,948,824 and 3,243,706 respectively to cover variable and fixed costs.
Figure 6: Breakeven Analysis by Price and by Cost per Unit
Figure 7: Break even analysis chart, shows the point at which numbers of units sold, 1.2 million, total revenue equals total costs. Fixed costs are relatively low indicating strong correlation between variable and total costs.
Figure 7: Break Even Analysis Chart
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Sales Forecast
Sales forecasts, as shown below in Figure 8: Sales Forecasts, for the first year represent fluctuations in each of the first four quarters as exposure and acceptance of the product affects the market. Initially, due to consumer curiosity, it is expected that sales will be strong. Sales are projected to show a substantial increase as consumers become aware of the product and are motivated by its price and taste. As the Muddy Buddy bar product gains recognition and word-of-mouth advertising takes place, sales will continue to rise. As consumer target groups such as college students and single fathers are lured into the food bar industry and food bar enthusiasts loyal to current brands sample Muddy Buddy bars, sales and recognition will increase.
Figure 8: Sales Forecast
Expense Forecast
Figure 9, Figure 10, and Figure 11, show costing analysis by period for each month, quarter and year end. The figures show expected unit sales, price per unit, variable production and marketing costs and fixed production and marketing costs. Marketing costs include costs associated with in-house marketing representatives, sales promotions and giveaways, and paid advertising costs. Variable costs go up and down in equal proportion to unit sales.
Figure 9: Costing Analysis – Year 1
Figure 10: Costing Analysis – Year 2
Figure 11: Costing Analysis – Year 3
Figure 12, Figure 13, and Figure 14, show income before taxes for the first three years of production and profit margin percentages based on anticipated revenue and costs associated with production and marketing.
Figure 12: Contribution Margin per Period – Year 1
Figure 13: Contribution Margin per Period – Year 2
Figure 14: Contribution Margin per Period – Year 3
Controls
The marketing budget will be monitored by factoring in marketing managers, sales staff, sales promotions and discounts and advertising costs. Marketing costs are estimated at 24% of the total budget. The marketing budget is broken down to 62% advertising, 28% staff and manager compensations, and 10.4% promotions and discounts. Each sales representative will complete an expense report detailing what was done and costs associated after all sales efforts. To meet initial sales goals, the market will be flooded with extensive advertising to get the Muddy Buddy name expanded in the market. The marketing director will perform monthly and quarterly analysis to ensure marketing costs stay within budget.
Implementation
Implementation will be conducted by a team of five marketing managers under the supervision of the marketing director. Each marketing manager will have one to three personnel assisting with certain aspects of the implementation process. The five managers will be responsible for business development, corporate marketing, marketing communication, market research and product marketing.
General Mills will utilize experienced marketing implementation practices from its existing product lines to insure the success of the Muddy Buddy bar line. Implementation will focus on Muddy Buddy branding and product awareness to make certain that Muddy Buddy projects the image needed to prevent getting lost among its competitors.
Due to current saturation in the market place, Muddy Buddy will focus its efforts on promoting itself as a gluten free, convenience, and healthy food bar. Each division of the marketing organization will focus on differentiation and product awareness.
Business development will focus its efforts on new market development and strategy. These tasks will include conducting follow up survey and target market response to Muddy Buddy bar. Corporate marketing will focus on public relations and branding insuring that Muddy Buddy bars maintain the desired image and relationship within its market. Marketing communication will manage and control advertising efforts including paid advertising and promotional advertising. Within this division will include web and graphic design image and representation. The marketing research department will work closely with business development to insure the development and analysis is properly tracked and managed.
And lastly, product marketing will involve product development and attention to different flavors and Muddy Buddy bar combinations. Flavors will be introduced and promoted in relation to seasons and climates. Flavor combinations such as peppermint or cinnamon will be introduced for the winter or December holidays and refreshing fruit flavors will be developed for spring and summer holidays.
Marketing Organization
Contingency Planning
The primary challenge for Muddy Buddy bars is entering a market already saturated. A secondary challenge is obtaining the Celiac Sprue certification in order to advertise our product as gluten free with the CSA seal. Although certification will not be difficult, it will require specific steps. Muddy Buddy bar overall strategy is based on the distinction associated with its gluten free and organic ingredients. A first step will be to apply for and obtain certification. The requirement for certification includes an ingredient review, documentation of ingredient specifications, celiac and allergen check lists, a facilities review, an inspection of the packaging materials and testing (Celiac Sprue Association, 2013). Celiac certification requires multiple levels of inspection and can be obtained after each level is achieved. Maintaining certification requires annual testing and is subject to random audits (Anderson, About.com, 2012). The time involved with obtaining certification is based on meeting each level of inspection. General Mills will be motivated to expedite this process as it is motivated to enter the market with a gluten-free product. If barriers prevent this, General Mills will reconsider its entry into the market. Without distinction, Muddy Buddy bar will be another cereal bar in a highly competitive industry.
References
Anderson, J. (2012, January 9). About.com. Retrieved October 20, 2013, from Certified Gluten-free Products: http://celiacdisease.about.com/od/glutenfreefoodshoppin1/a/Certified-Gluten-Free-Products.htm
Aubrey, A. (2006, September 04). NPR. Retrieved November 1, 2013, from A Better Breakfast Can Boost a Child’s Brainpower: http://www.npr.org/templates/story/story.php?storyId=5738848
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Burfield, T. (2013, August 27). Produce Retailer. Retrieved October 20, 2013, from Convenience, cstomization lead packaging trends: http://www.produceretailer.com/produce-retailer-news/Convenience-customization-lead-packaging-trends-221321631.html
CBS News Staff. (2012, July 31). CBS.Com. Retrieved October 15, 2013, from Gluten-free diet fad: Are celiac disease rates actually rising?: http://www.cbsnews.com/8301-504763_162-57483789-10391704/gluten-free-diet-fad-are-celiac-disease-rates-actually-rising/
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Appendix
Survey Questions and Results
Addendum A
1)How physically active is your lifestyle?
Very Active –
Moderately Active –
Somewhat Active –
Inactive –
Total –
Average Rating –
22.73%
33.33%
37.88%
6.06%
15
22
25
4
66
2.27
2)What age group are you in?
50+ –
35-49 –
20-34 –
1-19 –
Total –
Average Rating –
25.37%
32.84%
35.82%
5.97%
17
22
24
4
67
2.22
3)How often do you eat cereal bars?
Daily –
2 to 3 times per week –
Less than 1 time per week –
Never –
Total –
Average Rating –
0%
12.12%
42.42%
45.45%
0
8
28
30
66
3.33
4)Have you ever heard of Muddy Buddy’s? Yes
33.33%
22
No
66.67%
44
Total
66
5)Have you made Muddy Buddy’s for a party or an event in the past? Yes
14.93%
10
No
85.07%
57
Total
67
6)Would you be interested in a Muddy Buddy cereal bar? Yes
60%
39
No
40%
26
Total
65
7)If our new product were available today, how likely would you be to recommend it to others? Extremely likely
3.13%
2
Very likely
7.81%
5
Moderately likely
34.38%
22
Slightly likely
21.88%
14
Not at all likely
32.81%
21
Total
64
8)What would make you more likely to use our new product? Nada- I am guessing it is a cereal bar and I don’t eat those. A sample of what it tastes like. More information about what exactly a Muddy Buddy is made of. Eat it If the product was low in sugar and high in protein, I would be inclined to buy it. High Usrda nutrition values with appropriate cals Knowing what it is Diet related If it had high protein healthy ingredients- i.e. no high fructose corn syrup. high protein content I do not know what this product is. I assume a cereal bar, but not enough info given. If it was inexpensive Maybe if I had tried it, I’d be more open to trying new products or recommending it. To know the ingredients don’t include mud. Knowing more about the product (ingredients, uses, benefits, etc.) Nothing Nothing More info on product Good taste and a healthy product Flavor, price and convenience If it tastes good and is good for me. If I knew more information about it. Simple ingredients, organic & whole ingredients, gluten? Dairy? Sugar and soy free? Better name Knowing more about it and tasting it. Also knowing what is in it If it was good and someone recommended Knowing what it is exactly made of and taste. Good taste Taste Test Price Giveaways, samples. High in protein less carbs im not quite sure what your new product is… By tasting it Making it inexpensive, so that I would actually buy it. Free sample Being able to eat early in the morning which I know is important although I am never hungry then. avoiding processed foods-but if it had low sugar and more protein it’s a possibility Send out free sample in newspaper Just am not a big cereal bar eater Healthy bars If I tried it and really liked it, I would likely use it. attractive packaging If organic, non gmo ingredients used. If I like it… More advertising If I knew it tasted good non GMO.. nutritional info Muddy buddies are too sweet. It’s like a dessert. Have you ever had Muddy Buddies for breakfast? More Information healthy Good taste and texture Knowing the nutrition content, especially the protein and carbs/sugar levels. Gluten free ingredients healthy snack/low calorie 9)What do you like most about competing products currently available from other companies? Overall answers include: convenience, price, and organic ingredients: including gluten, dairy, sugar, and soy free? 10How important is convenience when choosing this type of product? Extremely important
26.87%
18
Very important
25.37%
17
Moderately important
31.34%
21
Slightly important
10.45%
7
Not at all important
5.97%
4
Total
67
Final Learning Outcome
I have learned many things this semester. I hope you enjoy reading the outcome of what I have learned.
- When I think of the type of knowledge I had before I started on this journey I did not know the meaning of most of the marketing terminology. I would feel comfortable having a conversation about product positioning and marketing mix. I used to have a job at a Mikasa dishes outlet as a merchandising assistant. I would build huge promotional displays of products that were going on sale. This was such a fun job. I would was able to use creativity to showcase merchandise and dress it up to be attractive, eye catching displays. The one thing I never took note of was the schematics that were given by the corporate office. I lacked the knowledge to understand what they really meant. I knew it was items they wanted to include in the display. But the schematics were actually product placement and promotional signage that they had designed to encourage the consumer to purchase the products they wanted to sell. The corporate office had developed a sales plan that included packaging that was attractive, informative and durable. The placement in the store was designated to be directly in the consumers path from the front door to the rear of the store where the registers were located. The promotional signage was bright colored, eye catching and easily understood and the price was fair for the merchandise being offered.
- I went black Friday shopping and was in Target in Santa Cruz. As I was wading through the mess of people, I was taking note of the signage, the sales the items they were wanting to sell. I was there buying a Canon Rebel that I have been dying to buy for quite dome time and the advertised sale was just what I had been waiting for. As I’m standing in line with people waiting to buy ipads and TV’s the sales associate asks me which item I am waiting for. So I tell him the Cannon Rebel deal he says “oh that is a steal, good thing you are in line we only have five of those in stock, I will hold one with your name on it at the counter.” It was after he walked away I said “lost leader, door buster” it was marketing class influencing me! I don’t usually think in marketing terms but now recognize marketing principles without trying.
- There are many changes happening in marketing due to economic changes. When I go shopping I see more “buy one get one free” deals on name brand items. This tells me that companies are trying to keep consumers buying the name brand instead of the knock off house brand item. I also know that as a consumer with less cash to spend I am looking at coupons before I go shopping. I also think twice about larger purchases I may have bought impulsively before. I go online and research who has a better deal.
- I know that with many people having DVR that commercial advertising which is costly, may be seen buy a smaller audience than before. I think that many businesses have started marketing their products on social network sites because that is where their target audience can be captured. I feel that word of mouth advertising is something I trust more than print ads or TV commercials. I would rather hear the truth about a product from someone I trust then and ad that is not personal.
- Marketing is interdependent from other parts of the company because the entire company is one global entity. All the parts of the company have to function together to be innovative, strong and competitive. The marketing department of company needs to interact with the public relations department to understand what customer feedback is being received and what image they want portrayed. The marketing department needs to be connected to the accounting department to know the financial budget of marketing campaign as well as the sales force to hear feedback and understand if the marketing campaign is successful. In order for a company to be viable the company needs to have a cohesive flow and remain connected in all aspects.
- Marketing plays a role in organizations and society because developing products satisfies the needs of consumers, and encourages companies to create products that will meet consumer demands.
Marketing creates a competitive environment that helps lower product prices. Developing product distribution systems that offer access to products to a large number of customers in many geographic regions.
Marketing offers techniques that have the ability to convey messages that change societal behavior in positive ways.
- Current marketing strategies consist of sales strategies or convincing the consumer that they have a need to purchase your product or service. Marketing strategies should consist of target marketing or knowing what the intended market you are selling to, so that you can advertise your product towards that audience. Market segmentation should be used as a tool to increase company profitability. Developing a marketing concept and implementation of it will include the promotion and product mix with the 4 p’s. The marketing strategy should include the type of marketing, online, print ad, TV ads, coupons, etc.
- Marketing decisions are made several ways. Marketing teams or development teams strategize concepts, ideas and promotions. Sometimes these strategies are tested on focus groups, through surveys, samples, taste tests or test sites. All of these will yield feedback from consumers that can be valuable in product development and can help marketers decide what the best avenue is to capture the desired audience.
- There are many aspects of marketing that ethical behavior needs to be part of. When a product is being manufactured, the treatment of the employees needs to be ethical and have labor laws that are strictly followed. I know that companies like West marine do impromptu tours of plants manufacturing goods for sale in their stores. They have a contractual obligation with manufacturers that if they find substandard working conditions or mistreatment of employees contract will be voided with no legal obligation.
- I think this is important to consumers that buy these products. I also think there is a global obligation to marketers to promote and advertise ethically. When false or deceptive advertising happens it not only angers the consumer it reflects poorly on the company selling the product and the maker of the product. Not only does this break down the customer value relationship it may even drive the consumer to buy a different product from your competitor.
Future Plans With My New Knowledge
I think I can apply the principles I learned in this class to several situations in my life. I have been thinking about the aspects of personal selling since reading about it since it relates to what I currently do.
I apply SWOT analysis to everyday problems that arise in my life. I feel that looking at each aspect of the SWOT analysis allows me to utilize critical thinking on an issue rather then emotional decision making.
I have thought many times about creating a business but have not really thought in depth about what it takes. Having done the planning assignment I realize there are many aspects that I did not consider and need to think through and research.
Post Challenge
I spent the last semester learning all about marketing. My biggest challenge at the beginning of the semester was trying to learn the terms and understand how they all come together to create the market. I did not understand what went into bringing a product to the marketplace before this semester.
I think completing my market planning project was probably the biggest challenge of the semester. Getting four people on the same page, completing a project at once while dealing with different personalities was a large challenge. I found the easiest way to overcome this was be agreeable, try to complete projects in a timely manner and don’t allow negativity to influence productivity.
While completing the market planning assignment I learned to consider many different areas when thinking about creating and marketing a product. I have done SWOT analysis on several different companies already in existence but not on a product in the development stages. I found this challenging and exciting at the same time.
siobhan c. scott 