Harvard Business School

Professor: Katalin Nadasi Ph.D., M.B.A.

2012. 03. 25.

Name: Adam Madacsi - HRYRTQProduct and Brand Strategies Case Study 2012.03.25.

Saxonville Sausage Company Case Study

I. Background Information – What is the current situation?

I./1. The Company and the Portfolio

Saxonville Sausage Company is a 70 years old private family owned firm, headquartered in

Saxonville, Ohio, with revenues of approximately $1.5 billion in 2005. Their product portfolio stands

by pork sausage products, predominantly fresh, not frozen ones. Saxonville’s primary product line is

their bratwurst product, which preforms 70% of the company’s revenues. Other important product

line of the portfolio is the breakfast sausage (both links and patties) that consists of 20% of the

revenues. Last but not least the portfolio’s third element is the small Italian sausage line, named

Vivio, which accounted for only 5%. Store-brand products make up the additional 5% of total

revenues.

I./2. Market share and position of the product lines

On the one hand the current situation reflects a struggling market nationwide in the US (0%

volume increase) with no growth predicted in short term. On the other hand following the nationwide

market trend Saxonville's sales in bratwurst category have been flat also. Unfortunately the breakfast

sausage line has been steadily underperforming the market causing a double-digit revenue decline.

However, the Italian sausage was the only one category showing growth across producers in

the retail sausage market, having an annual growth rate of 9% in 2004 and 15% in 2005. The only

one area where they have been consistently increasing their sales is the Vivio Italian sausage product

line. However, this product has just a small distribution network reaching just 16% of the national

supermarkets, primarily concentrated just in one area (NY, Boston, New Jersey). The aim is to

expand the product and the brand nationwide developing a repositioned national product with a

huge national distribution network under the name Vivio or as a new brand.

I./3. The Italian Opportunity – Background of the Italian Sausage Business

Saxonville hired a new marketing director, Ann Banks to "make her mark" and launch a

national Italian sausage brand, which will be launched to market in order to achieve profit

objectives for the next fiscal year. They need a well-thought-out and successful positioning plan to

create the Italian sausage brand to national category leader and match up core values in the “hearts

and minds” of consumers with the attributes of product portfolio to meet their specific needs.

There are two main product and branding strategic goals for the company. Primary they have

to choose the best positioning strategy in order to create a strong, lucrative and valuable connection

between the brand and customer’s core values. They must bring into existence a distinctive

indentity that would stand out the competition and acquire the top of mind place in customer’s mind.

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Name: Adam Madacsi - HRYRTQProduct and Brand Strategies Case Study 2012.03.25.

The brand management team determined the four best positioning strategy: Family Connection,

Clever Cooking, Confidence, Appreciation, Quick and Easy, Tradition (Exhibit 9) Secondly they

have to create a brand name that can be easily adopted by the consumers and appeals to the

expanded market. The main question is regarding the second strategic goal is whether should

Saxonville keep the Vivio brand or should change to a different one? The brand identificaters,

mainly the package style is also an important strategic aspect.

According to the case study there are also several constraints and obstacles regarding to the

reposition and market launch of the new brand. First of all they should carefully consider the

positioning process of the Italian sausage line to avoid cannibalization in other Saxonville’s brands.

Timing is a very important obstacle as well. Taking into consideration the following years profit

aims, the action plan and dates of the launch should be carefully thought out; according to Banks

“each tactic has to be realized by the slated date for the brand’s national launch early in 2007”.

Before the launch, they have to take into consideration the national advertising campaign and

promotions to differentiate the brand from competitors. The freshness is another important

constraint; they need to establish a distribution network to launch and deliver fresh products. Other

significant fact that since 2004, brats and breakfast categories across all sausage producers have been

flat nationwide, and there is a change in consumer tastes and preferences and cooking habits; their

lifestyle becomes more and more hectic. Moreover the senior management has a lack of marketing

and positioning orientation as well.

II. The Research methodology and the Results

To find the right positioning method for the product, the company conducted a four-step

marketing research. Theoretically the companies use qualitative techniques first to get opinions and

insights about a certain issue, which followed by qualitative and representative surveys to prove the

developed concepts. In this case the process is similar; they conducted three qualitative researches

to get insights and to surface ideas, develop positioning concepts. Validating these ideas through a

broader population a fourth quantitative round (a monadic test1) was conducted. The four-step

process is the following:

1 Monadic product tests: It is the presentation of a single product (or concept) for evaluation. Only one product (or concept) is presented and an evaluation is requested, with no other specific product comparisons. This method allowed each product (or concept) to be tested independently, minimizing the interaction between different products (or concepts). [own definition, following Malhotra 2009]

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Name: Adam Madacsi - HRYRTQProduct and Brand Strategies Case Study 2012.03.25.

After the presentation of the actual research methodology I am trying to formulate an

appropriate research design2 with necessary and important demographic, behavioral (attitudes) and

lifestyle variables. The aim is to measure consumer awareness of the Italian sausage, monitor their

satisfaction and attitudes associated with the product and track product usage and diagnose

problems as they occur and to gather all possible information to redefine the position and the brand

concept of this foodstuff. First of all the characteristics of the target group should be determined:

Variable categories Appropriate characteristics, componentsDemographic - men and women aged between 30 and 50 (primary female head-of-household)

- residence: citizens nationwide in the USA- has children, family part or full-time worker- medium and high-rollers (primary ESOMAR: A,B,C1), household income

Behavioral - frequency of dinner preparation, loves to cook, or cook meals for his/her family- buys regularly in supermarkets, buys special foods as well- Vivio loyalists or competitor’s brand loyalist, loyal to other brands of Saxonville- price-sensitivity,- attitude1: buys mainly not prepackaged, frozen food, but fresh ones- attitude2: wants to cook easily but substantial and delicious meals

Lifestyle - housewife family role- life stage: mothers with children or father, who cooks (30-50y)- or anybody who cooks often, and likes to cook special meals

The emphasis is mainly on women, and families. It is important also to explore who is the

concrete buyer and who is the initiator in the purchase process. There are two main target group

stages: firstly mothers (families), who wants to cook appealing meals for the entire family (easy and

substantial dinner, family happiness, satisfaction). On the other hand anybody who wants to cook

something special in an easy way. According to the theory of market research an exploratory

research should be conducted first providing insights and comprehension of the situation.

Exploratory research in the form of secondary data analysis of the mature market could be effective

performing studies, data about the market, consumer’s attitudes and competitive products.

2 In this paragraph I am going to adopt the theoretical background of market research of Malhotra 2009.

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quali-

tative

research

with target customersto understand their behaiviours and needsseq

uantial round of

customer

sessions

develop appropiate languagegain reactions to different positioning ideas, concepts

Actual concept

s

refine all gathered information into conceptsconsumers prioritize and imporve these concepts

Monadic

& quanti-

tative

testing

testing, evaluating position concepts get purchase intent scores, testing generates

Name: Adam Madacsi - HRYRTQProduct and Brand Strategies Case Study 2012.03.25.

Exploratory qualitative research involving focus groups should also carry out in order to determine

the needs and desires of the consumers, the level of satisfaction with the current product and

insights about the new positioning and branding concept. The next step should be a brainstorming

to collect ideas and determine concepts in terms of the next stage of the research and in terms of the

positioning and branding techniques, which could be appropriate and should be tested. On the other

hand, a conclusive research should be conducted (e.g. a survey, which represents the whole target

market or a monadic test) to draw conclusions: the results of the descriptive study can be

generalized to the entire population. Finally a casual research form; a test marketing should be carry

out to observe and test the consumer’s attitude and purchase intent in reality.

Furthermore, here are the main results of the conducted focus group research:

1) There are 3 groups of consumers (heavy, medium and light users)2) Heavy users purchase Vivio at least once a week during fall and winter and once every two

week during spring and summer (primary for evening dinner meals)3) It is a product, which makes life easier husbands and children enjoy this food4) most respondents have positive emotions, passion in connection with Vivio5) Easy to make, “meal-maker”, rather an ingredient food (!)6) Loyalists and competitors users considered (intent value of the product): high quality, good

color, above-average ratio of solids and fats, great taste and texture7) Brand name issues: need a more Italian name (like Primo), Vivio was just the 7 th, the

opinions about using the company’s name for brand name was controversial

The result of the independent evaluation of the earlier developed positioning concepts using

monadic test shows that the “Family connection” (52 votes altogether: 37 first, 15 second and 15

third votes) and the “Clever cooking” (49 votes altogether: 14 first, 35 second and 12 third votes)

models are the most appropriate position targets. After the concept testing a quanitative research

was conducted testing the two “winner” concepts representatively. The result shows that 81% of

respondents would definitely or probably buys the product with a positioning focused on “Family

Connection” and 72% if the company would use the “Clever Cooking” concept. On the other hand

41% would definitely buys the product with “Clever Cooking” concept and just 23% with “Family

Connection”. 4% would definitely not buys in case of the “Family Connection” position model, and

only 2% in the case of “Clever Cooking” concept.

III. The development of positioning territory ideas

The selected two positioning territories are “Quick and easy” and “Clever cooking”.

According to the focus group research users reported that they feel they always have a quick meal in

the house if there is Italian sausage. This information shows that the quick preparation is a

perceived and intended value of this product. It is perceived as an ingredient food as well,

customers can cook pasta, sauce, soups etc. from this. But these abilities are not a unique selling

point on the market, “quick and easy” is not a distinctive characteristic and can interpreted in a

negative way as well (“fast food, unhealthy food”) which could be significantly harmful to the brand.

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Name: Adam Madacsi - HRYRTQProduct and Brand Strategies Case Study 2012.03.25.

In my point of view using this positioning tactic and integrate it to the concept of “Creative

Cooking” should be appropriate. Using the adjectives “quick, easy, creative” together creates the

concept of “Clever Cooking”, which has more perceived value and unique message on the market in

order to differentiate the product against the competitors. I this case the operational or cognitive

advantages would be combined with affective attitudes, which creates a stronger and more effective

brand and product perception and customer awareness. The concept development in this case should

focus on characteristics like “delicious and quick way to express creativity” and “always some new

family approved fresh meals in minutes with Vivio.”

IV. Recommendations and additional tactics

I recommend applying the “Clever Cooking” positioning concept. As the case points out, both

position “Clever Cooking” and “Family Connection” are viable options according to qualitative and

quantitative testing. But “Clever Cooking” has got better purchase intent ratio in case of “definitely

buy and definitely not buy”, almost twice as many respondents said they definitely would buy the

product based on the “Clever Cooking” than the “Family Connection” position. Moreover there is a

good chance that the respondents’ familiarity with exiting brands’ “authentic Italian heritage” may

have biased their opinion toward Family Connection. Furthermore, this position threatens to

cannibalize Saxonville’s other products and could fail to differentiate itself from other brands. In my

opinion “Clever Cooking” is more versatile, lasting and what is the most important, more

distinctive. At the same time, this concept is easier or cheaper to communicate to the target group.

Accompany the product launch using this concept the company should firstly format a position

statement: “With Italian Sausage, you will have always great ideas for creative and delicious dishes

in minutes your whole family will enjoy.” or “all they will know is they love it!” or “Easy, Fast,

Creative – just enjoy!”. Furthermore, I recommend continuing using the brand name Vivio. With

this strategic move the company can retain the current profitable customers, loyalists and quality

image and they can expand the distribution in other regions in the same time. Developing and

applying a new brand name causes a lot costs as well, retaining the original name will spare money

to the company. There is still plenty of work to be done; the company must demonstrate innovation

and quality within the product. There are numerous companies that exclusively sell Italian Sausage

to the market. Saxonville have to compete against consumer known companies for the same target

market, therefore a creative potential positioning concept is necessary, emphasize creativity, easy

and fast cooking and freshness as a unique selling point. The first step is developing a strong food

marketing campaign with advertisements, articles, promotions, store advertising, shelf placement and

sampling to increase customer awareness: “make a creative buzz” to achieve high ratio of customer

recognition and recall.

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Name: Adam Madacsi - HRYRTQProduct and Brand Strategies Case Study 2012.03.25.

List of Reference:

1. Kate Moore – Saxonville Sausage Company, Harvard Business School Publishing 2007

2. Naresh K. Malhotra – Marketing Research, an Applied Orientation, Pearson 2009

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