Marketing Situation Analysis Report 061414 PDF
Transcript of Marketing Situation Analysis Report 061414 PDF
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Marketing Situation
Analysis ReportZach Hupy
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Background
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History
• The PetSafe Brand was started in 1991
• Originally started selling radio fences to contain dogs, attempting to
compete with Invisible Fence Brand (at the time a different company)
• In 1991, Invisible Fence sold the transmitter portion of their system for
$450. The unit contained $13 worth of electrical components
• PetSafe wanted to offer a similar product for a better value than Invisible
Fence. In doing so, they eventually beat Invisible Fence in sales and bought
them
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History Continued
• Financial goal for PetSafe was to sell 100 radio fences in
the first month. Actually sold 3,000 in the first month
• Sold $1,000,000 worth of radio fences in the first 6 months
• Founder Randy Boyd is still the CEO today
• Currently, Radio Systems Corporation (parent) is worth
upwards of $360M
• Radio Systems Mission Statement: “To be the most trusted
brand in the pet industry”
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Radio System’s Distinct Brands
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Industry Data2009 2010 2011 2012 2013
Sales $ 14.09 B $ 14.67 B $ 15.29 B $ 15.87 B $ 16.28 B
Profits $ 2.76 B $ 2.55 B $ 2.84 B $ 2.97 B $ 2.96 B
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2009 2010 2011 2012 2013
Pet Industry Profit and Sales (in billions)
Sales Profits
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Brand Data2012 2013
Sales $ 277.4 M $ 301.6 M
Profits $ 129.0 M $ 162.9 M
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2012 2013
PetSafe Profit and Sales (in millions)
Sales Profits
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Macro-environmental Factors
• ECMA (Electronic Collar Manufacturer’s Association) is a
world-standard in regulations on electrical outputs for collars
• ECMA restrictions on electrical power outputs for static
correction collars have been put in place to limit the stimulation
for the pet
• PetSafe has dedicated themselves to make sure that all their
products meet these ECMA standards, as well as adjusting their
products for international environments
• All PetSafe’s products also meet FCC regulations for radio
signals in the US as well as a number of regulations in each
country where they are used
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Market Share
68.2%
21.4%
2.6%
7.8%
PERCENT MARKET SHARE (TRAINING COLLARS)
PetSafe Dogtra Tritronics Other
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Product
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Product Life Cycle• The Pet Industry is in the mature age of its life cycle (According to IBIS Report for
March 2014)
• According to APPA, the tipping point of the industry happened in 2005-2006 when pets began to be rewarded and punished in human terms.
• This tipping point sparked a boom that has created a significant increase in new pet products and innovations leading up to 2014
• However, the forecast indicates that the number of new products released will decline from 2014 until 2019
2004 2006 2008 2010 2012 2014 2016 2018 2020
Pet Product Life Cycle
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Types of Products
• Currently, PetSafe has a wide variety of products, indicating a differentiated target marketing strategy
• PetSafe currently produces remote dog training collars, radio control fences, pet-proofing aids, kennels, water fountains, feeders, pet doors, litter boxes, dog collars and harnesses, toys, treats, as well as several other types of products
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Product Strategy
• PetSafe’s marketing strategy uses superior innovation which positions them to offer greater value to the consumer in several product categories
• Because of PetSafe’s dedication to new innovation (including over 40 patents) and customer service, PetSafe has remained a leader in electronic pet production for nearly 20 years
• Although PetSafe changed their slogan several years ago from “Happy Pets, Happy Owners” to “Protect. Teach. Love.” , both slogans provide the same message to consumers, who in turn have become loyal customers
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Price
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Price Range, Objective, and Strategy
• PetSafe is a higher-end product company that typically maintains a constant price level for each of its segments
• PetSafe then employs product line filling to fully offer products to all prospective buyers in the specific target market
• The price range of PetSafe’s products is between $3 and $600
• Training Collars range from $40-$200; Radio Fences range from $160-$600; Dog Doors range from $13-$250
• PetSafe’s Price Objective: Offer a higher quality product, and the product reliability and consistency will justify the higher price
• PetSafe’s Price Strategy: Although PetSafe prices are higher than some competitors, those who experience the brand will become loyal customers due to the product quality
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Price Competition and Marketplace Environment
PetSafe PetSmart PetCo
Little Dog Elite Trainer $179.95 $164.99 $159.95
Stay + Play Wireless Fence $339.95 $300.99 $341.10
Electronic Passport Door $229.95 $199.99 N/A
DrinkWell Multi-Tier Fountain $59.99 $69.99 $42.99
• All the prices listed in the table above were online prices. Therefore, the online
market is extremely competitive with discounted pricing and changes in inventory
• The marketplace environment is also extremely competitive. On top of the well
known producers, there are also store-specific brands that attempt to duplicate the
products of the industry-leader, PetSafe
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Place
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Locations and Channel Structure Diagram• PetSafe does not have retail or wholesale outlets. They do however have 7 offices world wide
and sell to more than 10,000 stores
• PetSafe employs multiple marketing channels. They use both P-C and P-R-C channel structure and it is typically the retailer who is the channel captain
• This indicates that the channel structure uses an administered VMS
• PetSafe (and Radio Systems) use a third party distribution strategy to get their products from the manufacturing line to the customer. They are typically warehoused in the US prior to being shipped to customers.
• U.S. and World Headquarters: Knoxville, TN
Raw Materials: Plastic, Circuit
Boards, Electronics
Product Development
Product Manufacturing and Assembly
Marketing
Pet Product Stores:
PetSmartPetCo
Online and Catalog Sales:
PetSafe.net
Customer Feedback
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Promotion
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Positioning Statement, Promotion Objective,
and Target Market
• Positioning Statement: To pet owners who want a quality product for their loved one, PetSafe is a product company that gives simple and effective solutions to their pets’ specific needs
• Positioning Objective: PetSafe’s objective is to use multiple mediums of communication to capture several differentiated target markets to provide the maximum amount of value to each segment
• The primary target market for the pet product industry are males and females between the ages of 25 and 45 and are typically financially stable
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Promotion Strategy and Tools Used
• Strategy focuses on customer satisfaction and customer service, fitting in
line with PetSafe’s Mission Statement, “To be the most trusted brand in the
pet industry”
• PetSafe promotes their brand by hosting an annual contest “Bark for Your
Park” in which cities in the US compete for a $100,000 grand prize to build a
dog park in their area
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Positioning Map (Training Collars)
Low Quality
Low Price High Price
High Quality
Dogtra
Dog Widgets
PetSafe
Esky
AGPtek
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What would you do differently?
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Things I would adjust• Product
• Product definition at times has been murky. A better defined product would make for a
smoother new product development process. This can be achieved through a customer-based
marketing strategy. By performing studies PRIOR to product creation and getting
consumer feedback, marketers can better inform engineers of the product requirements
• Product returns being close to 5% company-wide is simply too high. Consider hiring an
additional quality control employee to work along the assembly line full-time. Also consider
creating quality requirements for the manufacturers to make product. If the manufacturers
do not meet PetSafe’s standards, they do not make PetSafe products
• Place
• PetSafe products are currently sold in many retailers, both in stores and online. However, all
of their manufacturers are in China, with a Chinese-lead design team. I think the CDC
needs a full time American-trained overseer to ensure products stay on schedule for delivery
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Things I would adjust
• Price
• Having worked at Radio Systems, I feel qualified to say they work from a cost-based
pricing mentality. Switching to a more value-based pricing mentality would be better
for the company in the long run to create a loyal customer base
• Promotion
• Historically, PetSafe has not done much advertising. They are beginning to include
advertising in their marketing mix, but they still need to make a more concentrated
effort to advertise in high-touchpoint media. Possible media include television,
promotional events at pet stores, and even discounting on their online marketplace