First In Show Pet Foods, Inc.

Mansi Srivastava
2019BLP029
BACKGROUND AND PROBLEM DEFINITION
First in show pet food, Inc. is a major producer of dog food for show-dog kennels in the U.S.
They are known for supplying unique dog food for show dogs called Show Circuit. They are
in middle of launching new brand of dog food named Show Circuit in Boston. The product is
organic and consists of 85% fresh meat, remaining 15% of highest quality fortified cereal and
no additives or preservatives. The marketing firm will be providing a detailed proposal to the
company’s executive. The intention of meeting is to know how to position their product and
also figuring out which introductory plan Show Circuit’s launch.

MARKET AND INDUSTRY ANALYSIS

The dog food industry has $10 billion market with huge untapped market. The dog owned
population is approximately 65 million in U.S. The dog food can be categorized into three
major categories being (i) Dry (65%) (ii) Canned (15%) and (iii) Treats (20%). There is no
frozen category currently in dog food, which gives Show Circuit edge and huge untapped
potential. There are about 50 manufacturers and 350 products in U.S. There 5 major
companies in dog food who accounts for 75% of market share. Boston has around 43.2
million (Exhibit 1) of potential market size for dog food industry. The food is sold through
supermarkets (36%) and large retail outlets (64%). This is price sensitive market but as pet
owners consider their pets as family and spends around $20 billion on healthcare and
wellness. The target customer for Show Circuit could be married or single between ages of
21-54 with income greater than $25,000. The industry also spends 2% of sales on
advertisement.

EVALUATION OF ALTERNATIVE COURSES OF ACTION

The marketing firm has come up with two introductory plans to launch Show Circuit in
Boston:

Introductory Plan A: Invest $500,000 for marketing and advertising. In doing so company
has to sell around 381,295 (Exhibit 3) cases of Show Circuit to achieve breakeven point. For
15% profit margin, the breakeven sales will be $4,869,173 (Exhibit 3), which gives us 11.2%
(Exhibit 3) of the total market share of Boston.

Introductory Plan B: Invest $700,000 for marketing and advertising. In doing so company
has to sell around 525,179 (Exhibit 3) cases of Show Circuit to achieve breakeven point. For
15% profit margin, the breakeven sales will be $6,706,535 (Exhibit 3), which gives us 15.5%
(Exhibit 3) of the total market share of Boston.

CONCLUSIONS AND RECOMMENDATIONS

 According to me First in Show Pet Foods, Inc. should go for introductory plan A as it
has lowered breakeven to achieve and is less risky when compared with $700,000
budget.

Exhibit 1:
First In Show Pet Foods, Inc. Mansi Srivastava
2019BLP029
Dog food sold in U.S in 2009 $10 Billion

Dog’s population in Boston ~1.2% of 10 billion

First In Show Pet Foods plans to sell through supermarkets.

Percentage of sales through supermarkets 36%

Market Size = Total dog food sales X Dog’s population in Boston X Percentage of sales
through supermarkets

= 10000000000 X 1.2 X 0.36

= 43.2 Million

Exhibit 2:

Variable Cost $7.87/case

Profit Margin for manufacturer 15%

Manufacturing Price $9.26

Profit Margin $1.39

Broker’s Commission 7%

Broker’s Price $9.96

Supermarket’s Margin 22%

Selling Price $12.77

Exhibit 3:

Items Plan A Plan B

Budget 500000 700000
Slotting Fee 30000 30000
Total Fixed Cost 530000 730000
Profit Margin (Exhibit 2) 1.39 1.39
Break Even 381295 525180
Selling Price (Exhibit 2) 12.77 12.77
Break-even by Dollar Value 4869137 6706547