Brand Extension Marketing Plan Essay

1. Executive Summary The following marketing plan forms the basis for the introduction of an innovative new product by Snyder’s-Lance Inc. This analysis allows me to outline the best strategies to follow for the achievement of the company’s strategic goals. â€Å"Pretzel Abobodas† will be marketed as a unique flavored pretzel that targets the Hispanic consumer, while striving to reinforce the company’s focus on wanting to penetrate the Hispanic market. The marketing strategies will hopefully enable our company to reach a market size of an estimated 2,000,000 Hispanic Consumers (targeted) with forecasted sales growth prospects of 5% over the next 3 years ($450,000 profits), while satisfying the needs if the unserved market of consumers. Success will be reflected by a sizeable capture of market shares within this market, while strategically positioning the company as a market leader in the salty snacks segments of the industry. Company Description Snyder’s-Lance manufactures and markets snack foods throughout the United States and internationally. The Company’s products include pretzels, sandwich crackers, potato chips, cookies, tortilla chips, restaurant style crackers, nuts and other snacks. Snyder’s-Lance has manufacturing facilities in North Carolina, Pennsylvania, Iowa, Indiana, Georgia, Arizona, Massachusetts, Texas, Florida, Ohio, and Ontario, Canada. Products are sold under the Snyder’s of Hanover, Lance, Krunchers!, Cape Cod, Jays, Grande, Tom’s, EatSmart Naturals, Archway, O-Ke-Doke, Padrinos, and Stella D’oro brand names along with a number of private label and third party brands. Products are distributed widely through grocery and mass merchandisers, convenience stores, club stores, food service outlets and other channels. Pretzel Abobodas will bring an entirely unique salty snack experience to its consumers. It will present itself as a healthier snacking alternative to consumers while providing the great taste of authentic Abobodas, which is a top Hispanic flavor preference. The strategic role of Pretzel Abobodas is centered on three objectives: * To be the market leader in innovative product introductions and successful product launches * To strengthen and satisfy the needs of Hispanic consumers and families * To become the market leader in the functional salty snacks category with increased market shares Situational Analysis The U.S. Hispanic population is the largest minority segment and is growing at a dramatic rate towards ethnic plurality, which has already occurred in the most populous states and is beginning to occur among the U.S. baby population. The future U.S. economy will depend on Hispanics by virtue of demographic change and the social and cultural shifts expected to accompany their continued growth. Hispanics exhibit distinct product consumption patterns and are not buying in ways that are the same as the total market. In forecasts of future consumption growth, the Hispanic share is significantly greater than that of non-Hispanics. The evidence for the distinctiveness and sustainability of Hispanic culture is convincing and implies a future American culture with a strong Hispanic flavor preference. Snyder’s Of Hanover Pretzels provide a healthy snacking option for consumers. There are many varieties and flavors of pretzels across the U.S. market but there have been no flavors produce d for the Hispanic Market. 2.1 Market Summary My target customer group is the Hispanic Market. The Snyder’s of Hanover Brand is a nationally recognized brand among American Households. Snyder’s Pretzels dominate market share and the numbers continue to grow. While the numbers do continue to grow, the Hispanic Market has some great potential because we have not been able to penetrate the market enough to move the needle on share. Our brands have just really started to appear in the Houston Hispanic Market in stores such as Fiesta, and Food Town. Although we do have a little bit of presence in these markets, there is not a single item flavor wise that is targeted for this market. 2.1.1 Market Demographics Geographic The geographic target area that I am choosing is the Houston Hispanic Market Area, San Antonio Area, Corpus Christi, and a few more highly populated Hispanic areas. Demographic The demographic profile of my target market is going to be Hispanic Family Households with children 18 years and under Behavioral Factors * Hispanics constitute one of the fastest-growing racial/ethnic groups in the United States * Family Gathers are traditional for birthday, holidays, weekends, etc. * Hispanics, African Americans and Asians consume more beer than any other race which is a great tie in with pretzels 2.1.2 Market Needs The product will cater to both Physiological needs (nutritional value) and Social needs (perception of a social, healthy snack) and strive to provide the following benefits to Hispanic Consumers: * Healthy Snacking Alternative for Parties and family gatherings. * Price * Top Brand Product * Items that will last stretch in the household * Great tasting product 2.1.3 Market Trends The current trends include a shift away from junk foods, a growing interest in healthier/beneficial products, and the trend for personalization through customization or seeking in a wide introduction of flavors. Trends that will influence how customers will perceive our product include: * The importance to the customer- The phrase â€Å"customer-centric† has never been more important than it is today. With the arrival of the â€Å"information age†, consumers world-wide know what is available, what everyone else is buying and how to find it online at the lowest cost. With this power has come the ability to shape markets, and define the products that they want. Manufacturers no longer have the power to define a market in their own closed space. The phrase â€Å"build it and they will come† no longer applies – you must know what the customer wants in advance if you want any chance of survival. And once you have delivered what the customer wants, your product and your customer support must both be perfect, because in this age, word-of-mouth doesn’t just reach family and friends, it reaches the world. Place the customer first. Listen to them before you build your product and they’ll tell you what to make. Listen to them after they buy your product and they’ll tell you how to keep them as repeat customers (and brand advocates). * The globalization of brands, and the ability of consumer demand to occur on a world-wide scale, is tipping the balance of power * The globalization of the message†¦Today, that world is gone. With the rise of the Internet and a population that increasingly views world travel as just another part of life, messages and brand images no longer stay where you put them. Instead, they go viral. They get picked up on YouTube. They’re seen by travelers. They’re found on the Internet (occasionally in a blog with a title like â€Å"the 10 worst marketing translations†). They are everywhere. Moving forward, the â€Å"message† that a corporation presents must be global in nature, or at the least, local and regional messages must be cultivated in such a way as to work on a global scale. From a business perspective, this isn’t a bad thing at all. In fact, get creative with your international message and perhaps you’ll get lucky and it will go viral. * The Power of the â€Å"Same†-Not only can you buy the same thing anywhere, people have grown to expect the same thing everywhere! While we still pride ourselves in finding that unique place or product, the reality is that the world is becoming one giant franchise. The â€Å"bland effect† (the ability to eat at a McDonald’s or Burger King in just about every country in the world) has moved into most major industries, from automotive to online, and shows no signs of slowing. 2.1.4 Market Growth The U.S. Hispanic population is the largest minority segment and is growing at a dramatic rate towards ethnic plurality, which has already occurred in the most populous states and is beginning to occur among the U.S. baby population. Hispanics already account for an important share of consumer expenditures and given their youth, educational advances, and increasing spending capacity, Hispanics are fast becoming preeminent drivers of growth and likely trend setters in the marketplace. Marketers will need to understand the what, where, how and why of their role in tomorrow’s consumption space. In forecasts of future consumption growth, the Hispanic share is significantly greater than that of non-Hispanics. The evidence for the distinctiveness and sustainability of Hispanic culture is convincing and implies a future American culture with a strong Hispanic flavor. 2.2 SWOT Analysis The following SWOT analysis summarizes the key strengths and weaknesses that Snyder’s-Lance faces, as well as the opportunities and threats to be considered. 2.2.1 Strengths -Snyder’s Pretzels are nationally recognized and consumed brands -Snyder’s Pretzels hold the largest share in the U.S. in its category -Snyder’s Pretzels are becoming the healthy snacking option among children and adults 2.2.2 Weaknesses -Snyder’s Pretzels are not sought after in the Hispanic Community -Snyder’s Pretzels have not produced any Hispanic or Regional Flavors -The Flavor Preference that I will be producing is not a global product so it will be hard for Hispanics to adopt this product 2.2.3 Opportunities -Product Flavor is not in any market -Test market areas are pretty complex -Niche Market item 2.2.4 Threats -The Bigger Salty Snack Companies will try to introduce the same product at a lower cost, different packaging (Predatory Pricing could take place) -There is no brand equity in this product -Lack of Immediate Competition for comparison 2.3 Competition The competition is few and far in between. There are a lot of salty snack companies that produce Pretzels, but they are not the main brand. Also, the other Pretzel companies are not DSD companies, meaning they send product straight to store ware houses. Frito Lay is the largest Salty Snack Company in the World. Rold Gold is their pretzel brand, but not their main brand. They do not hold the amount of market share that Snyder’s Brand. Their main brands are Lays, Doritos and Tostitos. The other company is UTZ. UTZ is a pretzel company that distributes products via warehouses. They make and sell pretzels, but they do not have a flavored pretzel line. There are many more company that product pretzels but they do not offer the full variety and are not nationally recognized for this product. 2.4 Product Offering When you grab a handful of pretzels, you’re getting a snack that comes with fiber, iron, zinc and folate. And besides these nutrients, pretzels are low in fat. Hold up, though; this snack can come at the price of too much salt, because some brands of pretzels have nearly a day’s supply of sodium in one serving. Like most foods, the pros and cons vary from one product to the next. Low Fat Pretzels are one of best snacks when it comes to fat content. A 100-gram serving of hard pretzels, or about 16 pretzels depending on their size, has just three grams of total fat and no cholesterol. A significant amount of the fat — 88 percent — consists of healthy unsaturated fats that help lower cholesterol. (See Reference 1) The same portion of potato chips has 36 grams and tortilla chips have 23 grams of fat. Fiber Enjoying a snack of hard pretzels adds to your daily fiber intake. A 100-gram serving has three grams of fiber. That may not sound like much, but it’s eight percent of the recommended daily intake for men and 12 percent for women. Potato and tortilla chips have a little more fiber — four to five grams — but if you choose whole wheat pretzels, the amount goes up to eight grams. Calories Pretzels have fewer calories than potato or tortilla chips; but like many snacks, they’re not exactly low in calories. You’ll get 380 calories from a 100-gram serving of hard pretzels. (See Reference 4) The same serving of potato chips has 542 calories. Tortilla chips range from 489 to 514, depending on flavorings. Minerals Hard pretzels have seven to 10 percent of the daily intake of seven minerals, but they’re especially high in iron and zinc. (See Reference 9) In addition to carrying oxygen through the blood, iron provides short-term storage of oxygen in your muscles so that you have enough to meet the demands of increased activity. (See Reference 2) Zinc has many roles, from metabolism to the production of DNA and new cells. You also need zinc to support the immune system’s ability to fight bacteria. (See Reference 3) A 100-gram serving of hard pretzels gives men 62 percent of their daily intake of iron and 13 percent of zinc. Women get 28 percent of their daily iron and 18 percent of zinc. 2.5 Keys to Success There are many keys to the successful launch and implementation of this brand extension. Below are several critical success factors that we must leverage to be successful. * The product must meet a market’s needs better than the competition and customer alternatives (my product strategy has to be right) * The product must be taken to market through high-volume, competitive routes to market (I need a viable, volume go-to-market strategy and ability to execute in a way that drives sales growth fast) * The product must be rock-solid, high-quality and actually deliver the value promised so customers actually get the benefits they’re seeking (and that we’re selling to them). This is critical and must actually be verified with early customer testing and validation (and the product doesn’t ship until it’s actually ready, regardless of the â€Å"schedule†). * The pre-launch market conditioning must create enough awareness and â€Å"buzz† with both prospective customers and sales channels that this new product is coming to enable the product to gain enough early mindshare and traction that leads to both actual â€Å"proof† and â€Å"social proof† that the product is ready for the market. To grow beyond the initial launch, the product must be proven to meet mainstream customer needs (mainstream customers are notoriously risk-averse, so they want to see other companies like them have already taken the risk and proven the product in their environment before using it). * The go-to-market engine must buy into the product early and allocate resources to it (e.g., sales force for directly sold product, resellers/affiliates for indirect sales must choose to invest) †¦ and sales absolutely must have early success at selling the product. If the product isn’t really ready for prime time – it’s dead (the sales force probably won’t touch it again for a long time, if ever, and bad news travels fast). And get this, because it’s super-critical. If the product doesn’t convert better than what the reseller/affiliate is already selling today, it’s also dead (they won’t waste any more of their precious time on your new thingy, and will go right back to selling what already works for them and makes them the most money today). Sales people are â€Å"coin operated† and their behavior and decision-making responds directly to what makes them the most money the quickest. 3.1 Mission The objective is to introduce the Pretzels Abobodas to the Hispanic Community. There has not been a pretzel introduced to this niche market of consumers. It is my hope that this is will be the number #1 household penetrated pretzel in its category. 3.2 Marketing Objectives Ultimately the marketing objective for this initiative is to penetrate Hispanic consumers with a healthy snacking alternative with their flavor of preference in which they can serve during their family gatherings and make it a part of their daily consumption. The objectives of the marketing plan are strategically centered around 3 criteria: to create a strong consumer awareness towards a completely new flavored pretzel product to establish a wide brand recognition through the capture of market shares in the functional salty snack category, and to become the top market leader in that particular segment within the forecasted sales figures * Increase sales by 5% during the next fiscal year of this item being in the market * Improve product awareness for both the core and line extension brands * Brand Management: This new item should be recognized nationally after its successful launch in the Texas Hispanic Markets 3.4 Target Markets My target customer group obviously is the Hispanic Market. The Snyder’s of Hanover Brand is a nationally recognized brand among American Households. Snyder’s Pretzels dominate market share and the numbers continue to grow. While the numbers do continue to grow, the Hispanic Market has some great potential because we have not been able to penetrate the market enough to move the needle on share. Our brands have just really started to appear in the Houston Hispanic Market in stores such as Fiesta, and Food Town. Although we do have a little bit of presence in these markets, there is not a single item flavor wise that is targeted for this market Geographic’s: The geographic target area that I am choosing is the Houston Hispanic Market Area, San Antonio Area, Corpus Christi, and a few more highly populated Hispanic areas. Demographics: The demographic profile of my target market is going to be Hispanic Family Households with children 18 years and under Psychographics: Hispanics are very brand loyal and they use nationally advertised brands Hispanic families are close knit Familia includes parents, children, and extended family†¦the father is the head of the family and the mother is responsible for the home Individuals have a moral responsibility to take care of family members experiencing health issues, financial problem unemployment and other life issues Behavior: Hispanics constitute one of the fastest-growing racial/ethnic groups in the United States Family Gathers are traditional for birthday, holidays, weekends, etc Hispanics, African Americans and Asians consume more beer than any other race with is a great tie in with pretzels 3.5 Positioning Snyders of Hanover Pretzels is the #1 Pretzel in the category. This new flavor extension, the Pretzel Abobodas, provides a Healthy Snacking Alternative for Parties and family gatherings in the Hispanic Community. This product has price leadership in the market, making it very affordable to consumers, and a product that will last/stretch in any household. There are many varieties and flavors of pretzels across the U.S. market but there have been no flavors produced for the Hispanic Market. The most distinguishing feature for this new product is that it will provide Hispanics with one of their #1 flavor preferences on a pretzel which is the Abobodas seasoning. 3.7 Marketing Mix/Program The competition is few and far in between. There are a lot of salty snack companies that produce Pretzels, but they are not the main brand. Also, the other Pretzel companies are not DSD companies, meaning they send product straight to store ware houses. Frito Lay is the largest Salty Snack Company in the World. Rold Gold is their pretzel brand, but not their main brand. They do not hold the amount of market share that Snyder’s Brand. Their main brands are Lays, Doritos and Tostitos. The other company is UTZ. UTZ is a pretzel company that distributes products via warehouses. They make and sell pretzels, but they do not have a flavored pretzel line. There are many more company that product pretzels but they do not offer the full variety and are not nationally recognized for this product. The #1 thing that gives the Pretzel Abobodas more value than the competition is the fact that there are no other companies offering or producing this product or advertising to this niche market of consumers. Price To determine pricing for this niche product, I will follow a very detailed process which is shown below. 1. Review research and development costs, unit costs for manufacturing and shipping, and advertising costs to determine the overall cost to produce and sell the new product. Determine a bottom line sales price needed to break even in the marketplace from this information. 2. Review market analysis and trend reports, target market profiles, customer surveys, and past performance reports on other company products to determine the value of your product in the marketplace. Unique products, products that satisfy consumer needs, or those that make significant changes to work processes or in the lives of consumer are considered the most valuable. 3. Research your competition in target marketplaces to determine if your product meets, exceeds or falls below available products. Visit competitor websites and stores, and read reviews of competitor products to determine how your product measures up and how it may be received by consumers. 4. Create a price range using all the manufacturing, marketing, consumer and competition information available. Include a bottom line sales price and a ceiling price, which is the most you can sell the new product for and realistically generate consistent profits. Create mid-range pricing based on competition and market saturation. 5. Set a price for your new product. Review pricing options, market interest and how much you want to earn from sales to determine a price. To determine what the Pretzel Abododas is worth, I will focus on the following areas below: 1. Cost: Focus on current and future costs (vs. historical ones). 2. Sensitivity to price: Every buyer’s priorities change, based on unlimited factors. I will have to be ready to adjust quickly. 3. Competitors: I will pay attention to competitors’ pricing strategies, but I will not follow too closely. They may be â€Å"winging it,† and I might get burned. 4. Product Lifecycle: The price(s) of myofferings will often change throughout the product/service lifecycle. To set the product apart from the competition, I will do the following: * Reinforce your brand. If the Pretzel Abododas is on the market and there is no reinforcement, it will become stagnant and lose ground. It is important continue to build this brand by communicating with the market regularly.   Consistent communication will ensure that this new brand extension appeals to consumers on an emotional level, and increase their awareness of it. * Position your brand: Positioning is all about putting your brand in the right place, in the market, so that it gains the attraction of the right audience. I will decide the best position after careful analysis of the market and competitors. * Integrate community interest in your brand: This can be a great tool to help spread word about the brand. On one level, the brand must establish a link with the local community. By including their interests, they will be attracted to the brand, and help to tell others about it. * Create an online Brand Community. Social media sites such as Facebook and Twitter, will move the brand into the global sphere. The creation of an online brand community, will raise brand awareness, as people tell the story of the brand and propel visibility to a global audience. Whether they exist on the local or online level, community members are committed to the brand, and can prove instrumental in increasing awareness, and moving the brand forward. * Special Promotions – Attract customers by giving away free items. There is no greater pull for consumers than getting something for nothing. It will improve the status of the brand in their eyes, and with the right promotions, I will be able to gain valuable attention for the brand Place This niche item is all about where it is placed. I plan to distribute this new item via the Snyder’s-Lance Inc Independent Operator Direct Store Delivery System. Since this product is a brand extension, a new line for this item will be carried in all warehouses in this specific market. Snyder’s-Lance will take responsibility for distribution in the areas where we have Independent Operators, such as Houston, San Antonio, and Corpus. In the more rural areas, we will outsource to an outside distributor. References Kahn, B.E. and T.A. Louie, â€Å"Effects of Retraction of Price Promotion on Brand Choice Behavior for Variety Seeking and Last-purchase-loyal Consumers,†Journal of Marketing Research, Vol. 27, August, pp. 279-289, 1990. Minor, Micheal, â€Å"Comparing the Hispanic and Non-Hispanic Markets: How Different Are They?† Journal of Services Marketing, Vol. 6, No. 2, pp. 29-32 1992. U.S Census Bureau, Census 2000. Retrieved December 4, 2012. Webster, Cynthia, â€Å"Attitudes towards Marketing Practices: The Effects of Ethnic Identification,† Journal of Applied Business Research, Vol. 7, No. 2, pp. 107-116, 1991.