Breeder’s Own Pet Foods Case Analysis

Breeder’s Own Pet Foods Case Analysis

Background and Problem Definition

Breeder’s Own Pet Foods, Inc. is a major producer of dog food for show dogs. The company is planning to test the product in the Boston market, with hopes of launching nationally too. Breeder’s Own has to evaluate the results and come up with a meaningful marketing strategy in order to decide whether or not it should proceed with a national launch.  

Market and Industry Analysis

Sales of dog food will total about $14 billion in 2011 at manufacturers price. There are 50 dog food manufactures and 350 dog food brands in the United States. Industry leaders such as Nestlé Purina PetCare, Iams, Hill’s Pet Nutrition, MasterFoods USA, and Del Monte Foods account for 75% of US dog food sales. Positive trends in the industry indicate that there has been an increase in growth in premium and superpremium dog food sales and a growing emphasis for all-natural, no preservative products. There are three distinct categories of dog food: dry, canned, and treats. 95% of dog owners feed their dog dry food throughout the course of the year, 1 in 3 dog owners feed their dog canned food, and 80% dog owners feed dog treats. Research on US dog owners indicate that 1 in 10 dog owners buy frozen or refrigerated dog food, another 15% say they are interested but have not bought, and 75% have expressed no interest in buying frozen dog food. The missed opportunity with interested consumer is lack of availability and convenience.

Breeder’s Mix dog food offers an organic, no preservative product. It contains federally inspected beef by-products, beef, liver, and chicken. Although majority of dog owners buy dry food, organic dog food sales grew 64% last year. The organic dog food market is small, but consumers are willing to pay premium prices for organic dog foods. The target market should be singles and married between the ages of 21 and 54 with incomes greater than $50,000 since this market is 63% more likely to invest in their pets’ health.

Alternative Courses of Action

• Alternative A: Accept $500,000 Marketing Proposal: Accepting this plan could potentially generate $25,000,000 in sales (See Exhibit A). Breeder’s Own would need a break-even dollar amount of $695,980 and a break-even unit of 253, 082 (See Exhibit B). Net income after advertising spend would be $516,679 (See Exhibit C).
• Alternative B: Accept $700,000 Marketing Proposal: Accepting this plan could potentially generate $35,000,000 in sales (See Exhibit D). Breeder’s Own would need a break-even dollar amount of $958,615 and a break-even unit of 348,578 (See Exhibit E). Net income after advertising spend would be $316,679 (See Exhibit F).
• Alternative C: Reject Marketing Proposal: Rejecting the proposal will eliminate advertising cost. However, it will postpone the launch of the product since time and money will be spent in coming up with a new marketing plan.

Conclusions and Recommendations

My recommendation is to accept the $500,000 marketing plan. Like mentioned above, dog owners are becoming more willing to invest in their dogs due to growing acceptance of pets as family members. The suggested retail price for a pound of Breeder’s Own is $2.75 to beat the industry average of $2.23 (See Exhibit G). Currently, 10% of dog owners purchase frozen dog food. However, research indicates that another 15% of dog owners are interested in the product. Breeder's Mix will appeal to this segment, and has potential to persuade these individuals to purchase frozen dog food.