Saxonville Case Study
Case Analysis: Saxonville Sausage Company Han Zhao MBA 671 1. Briefly describe the current situation as you see it. Saxonville’s main source of revenue are their bratwurst and breakfast sausage, which together account for 90% of its total revenue. For the past few years, both of these product categories had 0% volume increase nationwide and were not expected to have any growth in the short term. Whereas the Vivio--Italian sausage category was showing growth of 9% annual growth rate, at the time Vivio was only available in only 16% of the nation’s large supermarkets. The Vice President of Marketing would like Vivio to be developed into a national product which would in turn help the company achieve their profitable objectives for the coming year. With declining revenues in the breakfast sausage category and stagnant growth in brats, Saxonville needs their investment in the Italian sausage line to take off in order to stay financially sound. Saxonville worried about the positioning of Vivio brand. The company needs to increase the awareness, customer base, and sales with their Italian Sausage products. It hopes to have Vivio drift into the hearts and minds of consumers and wants to make every customer feel as if the sausage was made specifically with them in mind. However, the company was unsure of the way they were positioning their product and before launching a new marketing strategy to a possibly new market they needed to do some very essential researches and analysis for target consumers. What is the ideal name for Italian sausage? Currently, Saxonville’s brand name is strong overall, and people evoke high quality when speak Saxonville’s Italian products. Although, Saxonville has well-established business, when it comes to Italian sausage, the company’s weakness is its poor standing of Italian sausage because of a more “German heritage”. Vivio now can only generate 5% of the total revenue, but it has great opportunities build a stronger brand name within Italian sausage sector and bring more profit to the company. Researches are needed for a better positioning and a distinctive identity of Vivio’s brand. 2. Evaluate the research method(s) the company utilized. Their objective of research is to find a new concept to apply to Italian sausage-Vivio and appeal to a wider market, so that to develop a solid core values for the brand. The research methodology is designed as a four-step process. The first step is a round of qualitative research with target customers to understand their behaviors and needs. The second step is a sequential round of consumer sessions, where the researchers used the language they have heard to develop and then gain reactions to different positioning ideas. In the third round they refined all the new
Question 1: What is the current situation?
Saxonville Sausage is a privately held 70 year old company that in 2005 hadapproximately 1.5 billion dollars in revenue from a variety of its fresh pork sausages. 70% of these products were bratwurst, 20% were breakfast sausages, 5% were an Italian sausage namedVivio, and store brand product accounted for the remaining 5%. Industry wide, bratwurst and breakfast sausage had stagnant growth, however Saxonville, due to poor performance with breakfast sausage, had a double digit decline in revenues which resulted in being ranked 6 out of 8 in market share for the industry. However, in spite of stagnant growth by the industry theItalian sausage market had a growth of 9% in 2004 and 15% in 2005. At the time Vivio was onlyavailable in 16% of the nation’s large supermarkets. Senior management was happy with thegrowth Vivio was receiving due to the national demand increasing but did not want to risk positioning the brand and cannibalizing the sales of their other products. Some felt it was anuntapped market in a rising market so Ann Banks was hired as the new product marketingdirector to come up with a market strategy to launch a new national Italian sausage brand so thatthe company could achieve its profit objects for the coming year.
Question 2a: How was the research methodology determined?
Before starting, Banks knew that eventually she would like to have quantitative finding to back up any of the research that she had done. However, she also knew that quantitative researchis often limited in its ability to accomplish some research objectives in launching a new product.For example, to develop a useful and valid survey a deep understanding of the concepts beingmeasured must first be discovered. Banks also knew that she would need to convince senior management that her research was valid by using numbers. To overcome this dilemma she optedto initially use a qualitative approach to develop her understanding of the situation and then back up her findings with a quantitative research study. Banks had been hired for her expertise increating a product that relates to the core values of a the target consumer. Once Banks was ableto identified who her target consumer was she could then use a descriptive research approach tolocate consumers values and pin them to a product. Picking a qualitative research approach wasthe only suitable solution to her problem.
Question 2b: Develop a research design and explain what behaviors, demographics, andlifestyle components you deem important and why.
Banks research design was very effective in getting her team to understand the possiblecore values of Saxonville’s target audience but lacked some of the necessary quantitativeresearch to completely confirm what route should be taken. Structuring a study by doingqualitative research first is sometimes necessary in the development of a proper quantitativeresearch design. However, most complaints with taking a qualitative research approach is that theresearch cannot be attached to numbers and analyzed with statistics, and that the findings areresearcher-dependent and subject to human error. This problem is attempted to be eliminated bythe quantitative research supporting the findings of key concepts derived from the qualitativeresearch. Other complaints of Banks’ study is that focus groups are to homogenous and that theKevin Tame 2/5/2010
Saxonville Sausage Case