SWOT ANALYSIS STRENGTHS

JAVIER ARIAS - 000025055

SWOT ANALYSIS STRENGTHS

BREEDER’S OWN PET FOODS, INC

- it’s super premium quality.
- Its location next to people’s food in supermarket makes them notice immediately the brand. - All organic without any kind of preservatives/additives.
- It’s recommended by professionals.
WEAKNESSES
- High costs to produce.
- The product requires freezer space and throwing time. - Low margin for retailers.
- Limited distribution resources.
OPPORTUNITIES
- Frozen dog food dollar volume increased by 133% from 2008 to 2010. - Tap the market potential of a complete frozen dog food in Boston.
- Capitalize on growing popularity of organic dog food.
- Growth in premium and super premium dog food sales.
- Increased dog ownership within the U.S.
- Pets increasingly perceived as family members.
- Successful Boston market launch lays ground work per national launch. - Limited competition.
THREATS
- 5 major competitors ( nestle Purina petcome, iams, hill’s pet nutrition, master food USA and del Monte foods) accounts for 75% of the market share.
- Lack of consumer appeal for frozen dog food.
- Dog owners are in most cases price sensitive.
- It’s difficult to persuade retailers for providing freezer space.
STATEMENT OF THE PROBLEM
How to launch show circuit brand dog food into the Boston market and to do so, decide whether to accept or reject the proposed marketing plan developed by marketing momentum unlimited.
DEVELOPMENT OF ALTERNATIVES
- Accept $500.000 marketing proposal. - Accept $700.000 marketing proposal. - Reject the marketing proposal.
EVALUATION OF ALTERNATIVES
It has two main benefits which are: The company will be able to launch the product as scheduled, therefore this could be serve as a basis for national launch in the future.

On the other hand, if we assume that total spending for advertising in the dog food industry is about 2% of sales, then $500.000/2%= $25.000.000 sales, this would be the sales potential of advertising.
FC= $530.000 (advertising +slotting fees), manufacturer SP= $1.95

VC= VC per bag + 7% sales commission = 7,87/12+1.95*.07=.7965

Contribution margin ratio=(sales-VC)/sales= (1.95/.7965)=.5915

Breakeven/ sales= FC/CMR= 530.000/.5915=896.027,04

Market share needed= $BE/total Boston Dog Food sales

Total Boston Dog Food sales= Total money spent on frozen dog food = 14.000.000.000*1,2%= 168.000.000

896.027,04/168.000.000= 0.53%

Market share needed= $BE/ Total Boston Supermarket sales

Total Boston Supermarket sales= 168 millions Total Boston + 5.36% spent in supermarkets= 60.480.000

896.027,04/60.480.000=1.48%

BE as % of market potential= $BE/$ Market potential

168 millions total Boston + 5.1% estimated mkt share for frozen dog food= 1.680.000

= 896.027,04/1.680.000= 53.33%

BE/units= FC / (USP –VVC)= 530.000/(1.95-.7965) = 459.472 units

The previous data suggests the following

• To make BE sales Breeder’s mix will need to obtain a 0.53% of market share of total dog food sales in Boston.
• To BE sales, Breeder’s mix will need to obtain 1.48% of market share.
• Breeder’s mix must sell 459.472 units to achieve BE.
• Breeder’s mix must have 53.33% of market potential to reach BE in sales.

It is recommended to take option 1 with the additional 30.000 slotting fee to make it 530.000. Also, they would achieve the return of sales.

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