International Entry
Identify a target market in the UK Adapt the product to fit target market
preferences Design a supply chain that accounts for
production and distribution Implement a communications strategy to
reach target market and induce trial of product
Segmenting the Market 20—29 age group
Metropolitan University students Young professionals, single Need for convenient and inexpensive food option
Parents Metropolitan & Suburban Middle to Upper class Young children—Age distribution between 5—14: 7,581,000 Age distribution between 25—39: 12,915,000 Influenced by children
60+ age group Retired Need for convenient food options
Target Market 20—29 Age Group
Age distribution: 7,599,000 people
Single, working professionals
Students attending universities
Fast-paced lifestyle Seeking convenient,
inexpensive alternatives to eating out and cooking
Very brand conscious – developed at an early age
The “Student Pound” ≈ £14 billion annually = $26,864,766,335
43% of 18 – 24 year olds experience a form of higher education
Spend a good deal of time… At pubs and bars At the cinema In restaurants (mostly fast
food) Participating in sports
Target Market
VALS 2 Category Experiencers
Young and compulsive Excited about new products that will give them the
edge, or new experience they desire
Target Market
PRIZM Segments Young Influencials
Traditionally referred to as “yuppies” Middleburbs, college graduates, young professionals
Up and Comers City centers, more mature, athletic activities, and night
life Boomtown Singles
2nd city, young working class, high value on functional and convenient things in their lives
Adapting Uncrustables to the Market
Modifying product to meet consumers preferences in the UK Replace current peanut butter & jelly and grilled
cheese filling with the combined ingredients: pizza sauce, cheese and pepperoni 60% of frozen pizza sales—cheese and pepperoni
Replace white bread with thin layer of pizza dough
Pizza is one of the nation’s top 10 most frequently consumed foods.
Marketing Objectives Expected Sales (dollars and units):
Frozen pizza sales US—2004: $2,782,254,592 Uncrustables sales US—2004: $27,500,000
Ratio 10.12 / 1
To account for first-year product introduction in a new market, estimated sales will be 2% of UK frozen pizza sales
Frozen pizza sales in the UK—2004: $645,478,720.95 $645,478,720.95 (.02) = $12,909,574.42 Estimated retail price = $3.44 per unit Total units sold = 3,752,783
Marketing Objectives
Extent of Market Penetration Population of Target Market = 7,599,000 Objective is to induce trial and repeated purchase
in 15% of target market. 7,599,000 (0.15) = 1,139,850 consumers
In order to reach expected sales value, each of the 1,139,850 consumers will have to spend approximately $10 on the product in 1 year
Brand Equity & Positioning Creating a strategic alliance with
Goodfella’s Pizza, produced by Green Isle Foods and owned by Northern Food Plc
Goodfella’s is the leading frozen pizza brand in the UK—owning 23% of the market. 2004 sales--$148,472,836.31 Average price range per unit—
£1.94—£2.99 ($3.69—$5.69)
Positioned as a quality pizza, made with the finest ingredients and designed to create a fresh-baked pizza experience in your own home.
Brand Equity and Positioning
Partnership Agreement Green Isle Foods responsible for producing
product in Naas facility Smucker’s responsible for contracting distribution
and storage Specific marketing team responsible for the co-
branding of product Coordinate strategy consistent with Goodfella’s and
Smucker’s image and reputation
Brand Equity & Positioning
Top competitors: Chicago Town Pizza—owned by Schwan’s (US)
2004 sales--$109,435,758 Dr. Oetker Pizza—family owned enterprise (GR)
2004 sales--$53,852,413.24
Positioned against the competition—Goodfella’s Stuffed Pizza Pocket are an affordable, convenient, on- the-go, single serving of that great pizza taste that you expect from Goodfella’s.
Product & Branding Decisions
Brand Name Goodfella’s Stuffed Pizza Pocket
Product Decisions Important factors:
Convenience Taste Price Cooking method Portion size
Core Product Decisions
Stuffed Pizza Pocket 6 inch diameter
Round in shape (like a small baked pie)
Thin layer of pizza dough stuffed with pepperoni, mozzarella and provolone cheese, Goodfella’s specialty sauce and sprinkled with parsley
Packaging Decisions
Packaging Materials for Stuffed Pizza Pocket Cardboard box 1 stuffed pizza pocket wrapped in plastic
Package Design Rectangular box
Size takes into consideration small freezers in the UK
Package Colors Primarily red, white and green—consistent with
Italian cuisine
Labeling Decisions
Content Brand Name Visual of Stuffed Pizza
Pocket Nutritional Information Ingredient List Preparation Instructions
Shelf Life Storage Conditions Contact information for
Green Isle Foods Place of Origin Bar Code
Distribution Decisions
Manufacture of Product Green Isle Foods—wholly owned subsidiary of
Northern Foods plc One of the UK’s largest food manufacturers
Produce frozen convenience foods for the Irish and UK retail markets
Distribution Decisions
Green Isle Foods operates facilities in Ireland State-of-the-art manufacturing technology in plants Described as a “specialist in food conversion /
assembly, with manufacturing capability as its core competence.”
Flagship facility for pizza is the plant in Naas, Co. Kildare Recently expanded under a £25 million investment project
—incorporated the most advanced baking, topping and packaging technology.
Distribution Decisions
Distribution of Product McBurney Refrigeration Ltd
Full range of refrigeration haulage Depots in Dublin and Liverpool Cold storage and chilled food distribution center on a
12 acre site in Liverpool to service increasing food import traffic from Ireland
Distribution Costs Trucking from production facility in Naas to port in Dublin
(17 miles) $2.11 per mile (17 miles) x 2 for refrigeration = $71.74 Round trip = $143.48 per truck Each truck can hold 10,000 lbs
One box = 0.8 lbs Each truck can transport 12,500 boxes Need to transport 308,430 boxes per month 308,430/12,500 = 25 trucks per month
25 trucks x $143.48 = $3,587 month x 12 = $43,044 $43,044 + 34% markup = $57,679 per year
Source: Freight Transport Association of UK
Distribution Decisions
Distribution of Product Dublin Port Company
“The Gateway between Ireland and the World” Principal port in the Republic of Ireland Positioned at the hub of national road and rail network Has terminals and facilities to the highest industry
standards
Distribution Decisions
Distribution of Product Derek Horner Agencies Ltd.
Customs clearance is performed in-house Full port agency services Containers provided to suit all types of cargo
Temperature controlled containers 1 sailing weekly from Dublin to Liverpool
Distribution Costs
Ferry from Dublin to Liverpool 6 trucks per week holding 60,000 lbs of product Shipping 60,000 lbs = $22,800
Includes refrigeration and markup $22,800 x 52 weeks per year = $1,185,600 per
year
Retail Distribution Regions
Shipping to 12 regions throughout the UK
Each region maintains 100 trucks, which operate through a centralized warehouse equipped with frozen storage facilities
Trucks then disperse to assigned retail outlets using a “just-in-time” inventory system
Distribution Decisions
Retail Outlets within UK regions Tesco—10 depots supply to 779 stores Somerfield—15 depots supply to 1,275 stores Sainsbury—12 chilled depots supply to 498 stores ASDA—19 depots supply to 258 stores Safeway—18 depots supply to 481 stores
Distribution Costs
Trucking from Liverpool to regions, then regions to retail outlets 1,200 trucks total Cost per truck = $1,564 $1,564 x 1,200 trucks = $1,876,800 per year
Storage costs throughout the 12 regions $10,000 per warehouse in each region x 12
regions = $120,000 (markup and refrigeration included) per year
Total Costs—per unit Production costs: 15% of $2.50 retail price (US) = $0.38 Truck from Naas to Dublin: $0.02 Ferry from Dublin to Liverpool: $0.32 Trucking throughout UK: $0.50 Storage in UK: $0.03 Total cost per unit: $1.25
50% markup Total revenue: $1.87
60% markup $1.12 Retail before tax $2.99
15% markup $0.45 Retail after VAT $3.44 =
£1.80
Promotional Budget
Profit per unit = $0.62 Total profit = $2,326,725 Northern Foods receives 55% of the profits
35% of profits go towards compensation for production costs which are 30% of the total costs
Payment for use of Goodfella’s brand name = 20% of profits
Northern Foods profits = $1,279,699 Smucker’s profits: $1,047,026
Promotions Decisions
Communication Objectives: Create awareness of the Goodfella’s Stuffed
Pizza Pocket among 25% of the population between the age of 20—29, specifically those in need of a convenient, affordable and quality product within one year.
We hope to stimulate trial among 15% of target population.
Promotions Decisions
Overall Message Stuffed Pizza Pocket is an affordable, easy to
prepare and consume product for those on-the-go and time-constrained members of the target market.
Purpose of the product—make the daily hassles of cooking less of a burden for the target market. Allows them to focus their energies elsewhere. The size and quantity of the product make it a reasonable substitute for a traditional meal.
Promotional Decisions
Creative Strategy Deliver clear, compelling message
Emphasize what is important to target market This age group cares about saving money
Consistent message The Big Idea
“Keeps you and your wallet stuffed”
Media Vehicles
Outdoor Advertising—91% of promotional budget
$952,794 Objective: Create awareness and stimulate
interest in product among the target market Reach and Impact Increases product credibility Strategically placed in high traffic areas and easily
viewed Creative and memorable
Media Vehicles
Outdoor Advertising Billboards
Contract with ClearChannel Billboards Purchase campaign type “National Cover A” which allows
for 100 billboards throughout the UK The budget will not allow for continual display of
billboards throughout the one year period Billboards will appear at the introduction of the product to
create awareness and will reappear throughout the year to serve as a reminder to the target market
Billboard expenditure: $688,745
Media Vehicles
Outdoor Advertising Ambient Media Expenditure: $264,049 Viacom Media offers general site packages for
Tube display
Media Vehicles
Sales Promotions—9% of promotional budget Objective—to engage and motivate potential
buyers Supplementing advertising and facilitating
personal selling—promotional giveaways Goodfella’s and Smucker’s brand reps distribute t-
shirts at local pubs/bars in each region 12,000 t-shirts x $0.33 ea. = $3,960 per month Annual cost: $47,520
Generate buzz and word-of-mouth Sales promotion expenditures: $47,520
Media Vehicles
Public Relations Objective—to promote a positive image, generate publicity
and foster goodwill Promotion on Green Isle Foods website
Promotes that product is available and relatively inexpensive method of communication
Other Examples—media coverage, hosting special events and sponsoring charitable campaigns
Disadvantages—cost, lack of control
Not feasible at this time beyond website publicity
Media Vehicles
Direct Marketing Objective—this form of advertising is aimed
directly at target consumers, usually in their homes, attempt to get them to take action
Examples—catalogs, coupon mailers and letters are common forms of direct marketing
Not an effective approach to reaching target Not feasible at this time
Media Vehicles
Event Sponsorship Objective—opportunity to reach niche market,
create awareness and enhance image Relatively new product and Insufficient funds Not feasible at this time
Media Vehicles
Advertising Any paid form of media communication
Television—high absolute cost, high production cost, short message life
Radio—low attention getting, audio only Print
Magazines—long lead time for placement, visual only Newspapers—poor reproduction quality, selective reader exposure
Disadvantages—cost, lack of feedback Not feasible at this time—will pursue options upon growth
of product
Summary
Target market—20-29 years old Strategic alliance with Goodfella’s Pizza (Northern
Foods plc) Stuffed Pizza Pocket – “Keeps you and your wallet stuffed”
Produced in Ireland and distributed throughout 12 UK regions
Product promoted through outdoor advertising, ambient media and sales promotions
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