MARKETING CHALLENGE The marketing challenge that Sarah Gremont is faced with is maximizing the listing productivity of the

garlic and herb division of Toppits Foods Ltd (Toppits ! and increasing awareness of the product" This goal will be attainable by either# expanding the distribution channels! identifying a cheaper supplier! or altering the current promotional strategy" $lthough sales of the garlic and herb cubes (G%& are increasing! relative profitability is staying stagnant" Gremont needs to identify a marketing plan that will increase overall profitability! or risk being de'listed by grocery stores"

CORPORATE CAPABILITIES & IMPLICATIONS Toppits Foods Ltd (Toppits is an aged company dating back to ()**" +t is a family run business that has expanded from fresh food offerings to the product in ,uestion- frozen garlic and herb cubes" Gremont has been working at Toppits for seven years! and has held various positions in the company! implying that she has a keen understanding of how Toppits operates" %aving had sales of ./0 million in /110! Toppits is fairly profitable" +t can also be inferred that Toppits is a small to medium sized company" $s such! resources of the company are relatively limited" Toppits seems to have a large product variety (ranging from seafood to frozen spices ! meaning that their operations and human resources would fit an organization that can operate many different branches within one company" Toppits marketing of the G%& has been rather unsuccessful as they have been unable to increase consumer awareness or profitability" Gremont2s marketing plan must operate within a ./11!111 budget! which has been allotted by Toppits" This means that the marketing of the G%& needs to be effective! and use its resources to reach a large crowd! even if it means using few variations of promotion mediums! at a higher cost"

INDUSTRY ANALYSIS & IMPLICATIONS The grocery industry! with which Toppits operates in! is not largely affected by current economic situations" 3eople of all income levels! and of all ages (assuming adults ()4 must purchase their groceries! as food stuffs are one of the few necessities of life" 5ven if the economy slows down! people will still buy groceries" +f the economy sees positive growth! and income levels rise! people will continue to purchase groceries! while diversifying their 6grocery lists7 potentially trying out new goods" $lso! the grocery industry is not really seasonally sensitive"" $s the population in &anada continues to grow! the grocery industry will grow with it" $lthough there is positive growth with in this segment! the grocery industry is becoming more competitive as consumers look for higher ,uality goods! which are environmentally friendly and are free of preservatives and the like" 5ntering the market at this time of increasing consumer awareness of health risks associated with chemical enhancers in food! products must be of the highest ,uality" 8ecause the freshness! and natural ingredients of the G%&! being in the market now will work to our advantage" There are risks associated to our +srael supplier! as the current state of affairs is fairly unstable in +srael! as tensions between Lebanon! 3alestine and +srael as rising" This could possibly affect shipment of goods"(

COMPETITIVE ANALYSIS & IMPLICATIONS 9ur direct competitors include# traditional herbs! Gourmet &anada! :c&ormick2s ;&lubhouse Spices2 and <erlea =ars" Traditional herbs have been in the market place for many years! and en>oy a large percent of household penetration" They have a huge advantage over other competitors because they have become staple in everyday cooking! and consumers trust the
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freshness of this product" The main issue they face is that their product rots within a few days of being purchased" Gourmet &anada has produced a tub like holder containing garlic and herb varieties! as well as dairy derivatives" They have limited their potential clientele as their product contains preservatives! so they cannot sell themselves as being all natural! and having dairy derivatives will cause people who are allergic to dairy products to stay clear of their product" :c&ormick has a large distribution network! and is a well'established brand- however! their products are of low ,uality" <erlea is a small! family owned business! with little production! and limited distribution network" Their products also contain preservatives" +ndirect competitors are home grown herbs! which accounts for a very small segment of the market! and are difficult to maintain" Toppits has a competitive edge over its competitors as it boasts all'natural ingredients! no preservatives! and can last fresh for up to two yearsG These points should be Toppits main selling points! and should be heavily advertised" $lso comparisons between the freshness of Toppits products versus its competitors should occur! to prove that what they are advertising is true" Toppits already has a good distribution network! but it needs to find a way to make G%& more visible! and stand a part from its competition" The competition might react by finding ;healthier2 supplies! and try to market themselves as being as healthy as Toppits2 products"

CUSTOMER ANALYSIS & IMPLICATIONS The potential clientele would be adults who are capable of cooking! and going grocery shopping" These consumers need a product that can help reduce the time spent in the kitchen! but which still has all the natural ingredients and flavour that they are looking for to spice up their meals" The product also has to be affordable so that people of almost all income brackets can afford to by the G%&" The market can be divided as such- people between the ages of /0'0H (who account

for H0I of the population and students ages ()'/0 (who account for (@I of the population " 8oth groups are looking for high ,uality goods that are affordable" Since the potential target market is so is large and because life2s tendency is to become more fast'paced! the number of consumers who would be looking for an alternative to crushing garlic is huge" 3eople between the ages of /0'0H should be the target market! simply because of their sheer number! and their ability to add specialized products! such as the G%& to their shopping lists"

TARGET MARKET The chosen target market are &anadians between the ages of /0'0H who have limited time! and usually cook food at home" $bout H0I of the population is accounted for between the ages of /0'0H" The target market will be predominantly women! although men should still be included" They tend to have little time and patience to stand in the kitchen chopping up onions! while crushing garlic! all while trying to handle their children! >ob! and life" They want a product that looks attractive! and is of the highest ,uality" &urrent social trends are moving towards healthier products that are all natural! and contain no preservatives" The target market also wants a product that is environmentally friendly" They would also tend to care about what they cook because they are using spices! which usually are only used to make bland food tasty and enticing" The large ma>ority would not want to spend anymore on the G%& then they would have on traditional herbs so price is a definite influence on their purchases" This is the most suitable target market as they are the largest portion of the market! and tend to be the consumers who have developed a taste for food! a knack for cooking! and tend to have a family to feed"

PRODUCT

Toppits is offering an alternative to traditional garlic and herb varieties" The product is called ;garlic and herb cubes2" They are frozen cubes of garlic and herbs that are placed in trays similar to ice trays" 5ach tray contains /1 cubes" The product is produced in +srael! where it is ensured that the produce used to create the garlic and herb cubes are of the highest ,uality" That is why it is crucial that Toppits sticks with the current +sraeli producer instead of moving to an alternate supplier from &hina" The product helps to cut down the amount of time spent in the kitchen! as it allows the consumer to stop spending time chopping! dicing! cutting! and crushing garlic and herb alternative" +nstead the consumer can >ust place the garlic and herb cubes in to the meals they are creating! saving time and strain" $ll the products are natural and fresh" Bone of their products contain preservatives or the like" $lso the product stays fresh for up to two years" The target market will see the product as a great alternative to the traditional herbs that hold a large percent of the market" They will see the garlic and herb cubes as a ,uick and fresh alternative to spending time preparing traditional herbs for meals" 8ecause this product is fresh and all natural! it truly stands apart from its competitors" $ll other competitors contain preservatives! and have a shorter life span" 8ecause there is an increasing trend to be health'conscious! consumers will move away from products that contain preservatives! and more towards products that are fresh and natural! >ust like the garlic and herb cubes" $lso the case that the G%& is held in is (11I recyclable/! meeting the new standards of environment'friendly products! as the consumer trends towards purchasing ;greener products2" Lastly! garlic seems to have preventative affects on cancerJ" +n /11)! an estimated (@@H11 people with in the target market will be diagnosed with

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cancerH" 8ecause of the high percentage of the target market that has! or will contract cancer! a product that can help prevent cancer will be regarded very positively by the target market" This means that the G%& are meeting the wants and needs of the consumer! because it is fresh! affordable and efficient"

PLACEMENT The current distribution of the garlic and herb cubes is from the producer to retailer (Toppits through to distributors who sell the G%& to grocery stores" $nother chain that is followed is from the producer to Toppits to warehouses" &urrently grocery stores are Toppits main stream of distribution! as Toppits only distributes the G%& to one warehouse" Since traditional grocery stores are seeing growth of only one percent from /110! Toppits needs to expand in to more warehouses" Aarehouse stores annual growth in /110 was / percent! but because it is a warehouse! products are sold in bulk! meaning that when consumers purchase the G%&! they will be buying a pack of J trays at a time instead of ( tray" $lso! there is a growing trend that the target market is making less and less trips to every distribution channel except warehouses! to buy their groceries" The statistics are inferring that there is a growing consumer movement towards purchasing goods at warehouses" 8y increasing Toppits distribution into warehouses! and keeping Toppits current grocery distribution! potential sales will grow (because the movement towards purchasing goods at warehouses! and because goods are bought in bulk meaning overall profitability will increase"

PRICING
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The price to the end consumer of the grocery chain is .H"0@" Please see exhibit 1 for an overview of pricing. Aholesale pricing through the warehouse chain has been ad>usted to .J"11 per tray as opposed to ./"@@ to increase Toppit2s profit margin" $lthough the warehouses are being charged more per tray! they will be earning a greater profit margin per tray as a result of the price increase" $lso by increasing the price! the breakeven point is significantly lowered! allowing for a profit to be generated" Please see exhibit 2 for a sensitivity overview. These prices are placed right in the middle of Toppit2s competition! as :c&ormick2s most similar product is priced at .0"K*0 and <erlea =ars most similar product is priced at ./"K* 0" $lso when purchasing the G%&! the target market will take in to account that they no longer need to buy traditional garlic and spices! which can be priced anywhere from .1"** to .0"**0! meaning that the G%& are a great deal" They are time'efficient are affordable" $lso! by setting these price levels! the consumer2s perception of the G%& will be one of ,uality (because it is not cheap and affordability (because it is not the most expensive of it2s kind "

PROMOTION +t is Sara Gremont2s challenge to increase consumer awareness of the G%& as it currently has very limited exposure" First! the G%& should no longer be placed in the specialty freezer! as it2s misplacement has reduced exposure of the G%&! because it is placed in inconvenient areas" $lso! because the G%& are not placed amongst its competitors! consumers will be unaware of what the G%& offers! and how it is better than its competition" The G%& should then be placed in the grocery store or warehouse freezers! amongst it2s competition so that is easily accessible! which is what consumers are looking for" +n store sampling should continue! as it increases consumer
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awareness of the G%&2s natural and flavorful taste" Sampling on certain TN shows such as 2J1 minute meals2! ;The +ron &hef7 and ;5meril2 should be pursued" These shows boast famous TN personalities! who focus on ,uick and flavorful meals" The target market is amongst the largest audience of shows such as these! as they en>oy watching different ways to cook! and if the TN personalities are seen with the G%&! it will persuade consumers to purchase the product" $dvertisements on television shows such as %GTN! and The Food Betwork will occur four days a week! for a period of /H weeks" $lso radio ads will occur three times a week for a period of /H weeks" $verage sales growth was about J1I during the advertisement period in the previous year! so it is clear that advertisements are amongst the most effective promotional methods" Please see exhibit 3 for a breakdown of costs related to promotions. 3romotional coupons should be advertised in the grocery and warehouse stores2 flyer" &oupons will increase the target market2s interest in the product as it promotes the product at a cheaper price" $ new packaging will be created highlighting the G%&2s all'natural ingredients! no preservatives! cancer preventative properties" Please see exhibit 4 for an example of the new packaging. These properties are key to increasing the G%&2s popularity and awareness! as current social trends are moving towards products that are healthy and environment friendly" Lastly food festivals! freezer placement and website design will not be pursued in the budget as they are no longer relevant"

Exhibit 1- Pric br !"#$%& !&# br !" ' & ($r !ch #i)trib*ti$& $+ti$& T$++it) S ,,i&Pric /"@@ .J"11 ./"J* VC .("** .("** .("** UC .1"@K .("1( .1"H1 RSP .H"@0 .J"@1 /"** Pr$(it M!r-i& /0I JJ"0I (@"KI Br !" ' & K(*H1J HK)/@H (JJ0/(@

Gr$c r. Di)trib*ti$& /+ r tr!.0 1!r h$*) Di)trib*ti$& /+ r tr!.0 1!,2!rt Di)trib*ti$& /+ r tr!.0

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Exhibit 54 Pr$2$ti$&!, c$)t br !"#$%& I&iti!ti' S!2+,i&/I&-)t$r !&# TV-)h$%0 M!-!7i& ) T , 'i)i$& !#' rti) 2 &t) Act*!, .@)!1)1 .J@!111 (J(1OHO/H 4 (()1O 89/H M .HK!1H1 (/*1OJO/H M ./1))1 ./1!111 .)111 A))*2+ti$&)6 Ex+,!&!ti$&) Left over budget to be spent on in store sampling and appearance on TN shows Same . as previous year H ads per week for /H weeks on %GTN and Food Betwork J ads per week for /H weeks on &%P: F: Same . as previous year Same . as freezer placement! as products will be stored in grocery freezers instead of specialty freezers

R!#i$ P!c"!-i&Sh ,( P,!c 2 &t

TOTAL

./11!111

Exhibit 84 N % +!c"!-i&-

GARLIC & HERB CUBES

100% NATURAL NO PRESERVATIVES

PREVENTS CANCER

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E:ECUTIVE SUMMARY Sara Gremont! vice'president of 8rand Strategy and 8usiness <evelopment at Toppits Foods Ltd (Toppits needs a marketing plan that will increase the profitability of Toppits2 garlic and herb cube business! while also increasing consumer awareness of the product" The garlic and herb cube business is run as a profit'centre for Toppits! and so it has to show increased profits over previous years" $lso! Gremont faces having the product being de'listed by retailers if sales do not improve" The success of this product is contingent upon identifying a new marketing strategy that will increase the profitability of the herb and cube business! while also increasing consumer awareness of the product" Toppits should focus on consumers between the ages of /0'0H" They are the largest group in &anada! representing approximately H0I of the population" Society is moving towards purchasing products that are healthier! ;greener2! and more efficient! and this target market is no exception" They want a product that is competitively priced! and is of the highest ,uality" They will be willing to pay a small premium over other goods to have produce that is all natural" To achieve their goals of increasing profitability and consumer awareness of the garlic and herb cubes! while keeping within the target market2s wants and needs! Toppits will need to follow these recommendations# o 5xpand distribution in to more warehouses! while keeping current grocery store distribution channels o +ncrease the wholesale price for the warehouse distribution o 3lace the garlic and herb cubes amongst it2s competitors within the grocery and warehouse stores2 freezers o &reate a new package for the product o 3ursue new more aggressive methods of promotion 5xpanding Toppits2 distribution in to warehouses is crucial! as more and more of the target market is moving towards purchasing the goods at warehouses" Aarehouses are seeing a greater annual growth than groceries! and consumers spend more per trip to a warehouse! than to a grocery store (because goods are bought in bulk " $lso because the warehouse distribution chain has less ;middle'men2! Toppits will be able to increase their wholesale price! while still ensuring that the QS3 is still affordable! and fits with the target markets spending ability" This also means that profitability per good sold increases" Toppits2 has been struggling with trying to find an effective way to promote the garlic and herb cubes" They must first ensure that their products are placed amongst the competition in the grocery and warehouse stores2 freezers! instead of in their specialty ;Toppits7 freezers" Secondly a design for the packaging needs to be implemented that will highlight the cubes2 all natural! no preservative! cancer preventative and recyclable ,ualities" +t is these ,ualities that truly set the cubes apart from their competitors" They are also ,ualities that will influence the target market to purchase the cubes! as they are the ,ualities that are the most important to them" These new implementations will have to be promoted through aggressive promotions through different mediums such as TN! radio! coupons and in store sampling" These recommendations will help Toppits2 reach their goals as they ensure awareness of the product will reach the target market! loud and clear" This marketing strategy highlights the garlic and herb cubes2 advantage over its competitors in an effective manner! by giving the target market what it wants from ,uality produce goods" The increase in wholesale prices will ensure a profit! as will the expansion in to warehouses"

MARKETING MANAGEMENT REPORT BUSINESS 133;

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