marketing - positioning and segmentation - the snack food market in australia
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Ashleigh Robinson21783
MKT100 Individual Assessment Task
‘Positioning and Segmentation’
The Smith’s Snackfood Company
Ashleigh Robinson – 21783
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Table of Contents
Table of Contents
TABLE OF CONTENTS.............................................................................................................................. 2
EXECUTIVE SUMMARY........................................................................................................................... 3
COMPANY PROFILE.................................................................................................................................. 4A BRIEF HISTORY OF SMITH’S SNACKFOOD COMPANY....................................................................................4SMITH’S TODAY...............................................................................................................................................................5
MARKET SEGMENTATION.....................................................................................................................7PARTY SNACKERS...........................................................................................................................................................8INDISCRIMINANT SNACKERS........................................................................................................................................8ECONOMICAL SNACKERS..............................................................................................................................................8NUTRITIONAL SNACKERS.............................................................................................................................................9WEIGHT WATCHERS.......................................................................................................................................................9GUILTY SNACKERS...................................................................................................................................................... 10
PERCEPTUAL MAPS................................................................................................................................ 10SMITHS CHIPS PERCEPTUAL MAP ..........................................................................................................................11SAKATA RICE CRACKERS PERCEPTUAL MAP.....................................................................................................12NOBBY’S NUTS PERCEPTUAL MAP........................................................................................................................13
COMPETITIVE ADVANTAGE.............................................................................................................. 14PRODUCT: SMITH’S CRINKLE CUT CHIPS.............................................................................................................14POSITIONING STATEMENT ..........................................................................................................................................15
CONSUMER PROFILE............................................................................................................................. 16
VALUE PROPOSITION............................................................................................................................ 18
REFERENCES............................................................................................................................................. 19
APPENDICES............................................................................................................................................... 20
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Executive Summary
This report provides an analysis of positioning and segmentation in regards to the snack food
market within Australia. It will specifically focus on The Smith’s Snackfood Company, which
currently operates within the Australian snack food market. Some topics that will be covered in
this report include;
- A brief company profile and description of the Smith’s Snackfood Company’s product range
including; Smith’s Chips, Doritos, Twisties, Burger Rings, Parker’s Pretzels, Nobby’s Nuts,
Cheetos Cheese and Bacon Balls, Tasty Toobs, Cool Pak Popcorn, Red Rock Deli, Grain
Waves and Sakata Rice Crackers.
- A detailed segmentation of the snack food industry into six categories of snackers; party
snackers, indiscriminant snackers, economical snackers, nutritional snakers, weight watchers
and guilty snackers.
- A number of product specific positioning matrices including; Smith’s Crinkle Cut Chips,
Sakata Rice Crackers and Nobby’s Nuts.
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- A detailed explanation of the competitive advantages The Smith’s Snackfood Company holds
over its major competitors, as well as specific competitive advantages and a positioning
statement for the individual product of Smith’s Crinkle Cut Chips.
- A specific personal profile of a potential consumer for the individual product of Smith’s
Crinkle Cut Chips
- An in depth value proposition and brief for an advertising agency promoting Smith’s Crinkle
Cut Chips and the specific features and benefits of this particular product, which include;
flavour, the use of local produce, product differentiation and convenience as well as the ability
for cross promotion.
Company Profile
A Brief History of Smith’s Snackfood Company
Francis Leigh Smith originally founded Smith’s Potato Crisps Ltd. in the United Kingdom after
World War 1. Throughout the Great Depression, Smith moved to Australia with his associate,
George Ensor, to expand his business, and the first Smith’s chips were manufactured within
Australia in 1931.
Over the years, there had been number of ownership changes and a number of new products were
added to the original Smith’s potato chip including; Twisties, Parkers Pretzels, Burger Rings and
Nobbys’s Nuts (Smith’s, 2011a, para. 5). Finally in August of 1998, PepsiCo Inc. purchased the
Smith’s Snackfood Company.
(Please refer to appendices 1, 2 and 3).
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Smith’s Today
The ‘Smith’s Snackfood Company’ (Smith’s) is a subsidiary of PepsiCo Inc. It is the snack food
operating division within Australia and as stated by PepsiCo, it is considered to be Australia’s
leading snack food company. (PepsiCo, 2012, para. 1).
The Smith’s Snackfood Company has a reasonably large product range of which fall under four of
the five product categories of salty or savory snacks including: salty snacks, crackers, nut snacks
and popcorn – the product range can be seen detailed below in Table 1, which is located on the
following page.
Further, Smith’s is manufactured all over Australia with manufacturing sites and distribution
centers located in New South Wales, Western Australia, South Australia and Queensland.
(Please refer to appendices 4).
Table 1 – Summary of Smith’s Snackfood Company Brands
Smith’s Chips
(Crinkle Cut and Thin Cut)
Doritos Corn Chips
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Twisties Burger Rings
Parker’s Pretzels Nobby’s Nuts
Cheetos Cheese and Bacon Balls Tasty Toobs
Cool Pak Popcorn Red Rock Deli
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Grain Waves Sakata Rice Crackers
Market Segmentation
Market segmentation can be described as “…a process by which a market is divided into relatively
similar, meaningful and identifiable segments or groups.” (MKTG, 2009, p69).
Further, as stated by Long (2012, p1), within the snack food market, consumers will fall into six
identifiable groups: (1) Party Snackers; (2) Indiscriminant Snackers; (3) Economical Snackers; (4)
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Nutritional Snackers; (5) Weight Watchers; and (6) Guilty Snackers. These segments are further
detailed below.
Party Snackers
Party Snackers can be described as middle-aged consumers, between the ages of 40 to 60 years
old. Their psychographic characteristics can include being very sociable and outgoing. Some
benefits sought include snacks that is easy to serve to guests when holding functions and parties as
well as a snack that compliments a variety of beverages and tastes excellent. Further, this particular
market can be segmented into a medium or average user group, as they only snack occasionally.
Items from Smith’s which fall under this market segment include: Nobby’s Nuts and Parker’s
Pretzels.
Indiscriminant Snackers
Indiscriminate Snackers can usually be described as teenagers, from the ages of 15 to 19 years old.
Their psychographic characteristics can include being self-indulgent and pleasure seeking. The
main benefits sought include a snack that tastes good and satisfies their hunger cravings. This
market can be segmented into a high or heavy user group, as they tend to snack often.
Items from Smith’s which fall under this market include: Doritos, Cheetos Cheese and Bacon
Balls, Twisties, Tasty Toobs and Burger Rings.
Economical Snackers
Economical Snackers can be described as large families, usually with 5 or more members as well
as single parent families, due to the fact that they only have one source of income. Their
psychographic characteristics can be described as confident, educated and price-orientated - being
aware of available discounts and competition prices. The main benefits sought include a snack that
has good value for money, as well as one that is priced reasonably low. This market can be
segmented into a medium or average user group.
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Items from Smith’s which fall under this specific market include: Smith’s Chips (Crinkle Cut and
Thin Cut) as these products are reasonably low priced, with regular specials as well as being
included in value packs to provide value for money for consumers and potential customers.
Nutritional Snackers
Nutritional Snackers can be described as educated parents, usually with a family consisting of
young children. Some psychographic characteristics include being self-assured, in control and
knowledgeable. The main benefits sought include a nutritional and natural snack, with low
artificial colouring and substitutes for flavouring. This market can be segmented into a low or light
user group.
Items from Smith’s that fall into this segmented market include; Grain Waves and Sakata Rice
Crackers.
Weight Watchers
Weight Watchers can usually be described as young males and females, usually of a single marital
status. Their psychographic characteristics can include; being adventurous, as well as someone
who loves the outdoors and is into health and fitness. Some of the benefits sought from snack
products include; a snack that has low calories and provides energy. This market can be segmented
into a low or light user group.
The item from Smith’s that falls under this segmented market is the Sakata Rice Crackers. The
reason Sakata rice crackers have been included within both the nutritional snackers and weight
watchers segments is that they are known to be 100% natural – with no artificial flavours, colours,
preservatives and no added MSG. These benefits would appeal to both individuals who are
interested in nutrition and eating healthy, as well as those who are watching their weight and being
fit.
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Guilty Snackers
Guilty Snackers can be described as consisting mainly of females with no specific age limit. Their
psychographic characteristics can include loneliness, as well as a sense of worry or anxiety. Some
benefits sought from this market include; a snack that tastes good, one that is quick and easy as
well as relatively low in calories. Further, it can be common for this segment to use snacks to
create a personal space, a way to take a minute for themselves away from the burden of daily life.
This market can be segmented into a high or heavy user group.
Some items from Smith’s that fall under this segmented market include Red Rock Deli chips and
Cool Pak Popcorn.
Perceptual Maps
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Smith’s Chips Perceptual Map
Explanation:
As can be seen in the Perceptual Map featured above, Smith’s Crinkle Cut Chips have a number of
different competitors within the marketplace, which can include; Pringles, Samboy, Thins, The
Natural Chip Company and Coles Simply Less. Smith’s can be considered to be a more classic and
original flavour than some of its other competitors. Further, the majority of other competitors
including Thins, Samboy and Pringles can be viewed as more synthetic due to the fact that Smith’s
Chips are cooked using healthy sunflower oil and have 75% less saturated fat compared to other
chips cooked in 100% palmolein oil.
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Sakata Rice Crackers Perceptual Map
Explanation:
As can be seen in the Perceptual Map featured above, Sakata Rice Crackers has a wide range of
competitors within the market place including: Fantastic Crackers, Peckish Rice Crackers, Coles
Brand Crackers and Vita Wheat Rice Crackers. As can be seen in the perceptual map above, the
Sakata Rice Crackers have the most visual appeal compared to some of their other competitors,
which is achieved through the use of bright and attractive colours. Further, Sakata also has the
lowest amount of calories, with only 397 calories per 100g.
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Nobby’s Nuts Perceptual Map
Explanation:
As can be seen in the perceptual map above, there are a number of competitors within the snack
food market that compete with Nobby’s Nuts. Some of these competitors include; Coles Salted
Peanuts, Maja’s Bhuja Mixed Nuts, Mother Earth Cashews and the Gourmet Nut Co. Flavour
Escapes. As can be seen above, Nobby’s Nuts are considered available to a mass market, unlike
some of its other competitors that are very much targeted toward a niche market, such as Maja’s
Bhuja Mixed Nuts. Further, Nobby’s Nuts are the second least expensive option available to
consumers, only after Cole’s generic brand peanuts.
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Competitive Advantage
Competitive advantage is defined as “…the ability of one organisation to outperform other
organisations because it produces desired goods or services more efficiently and effectively than
its competitors”. (Waddell, Jones & George, 2011, p21).
The Smith’s Snackfood Company is considered one of Australia’s largest snack food companies,
which is a competitive advantage in itself in relation to other smaller competitors within the snack
food market. Being such a large industry player within this market, Smith’s has the benefit of high
brand awareness and consumer loyalty. Further, being such a large company poses a threat to new
entrants within the snack food market, which is due largely to Smith’s product differentiation
strategies, forward integration that is used to provide greater economies of scale, as well as
efficiency and effectiveness of production and wide distribution channels.
Product: Smith’s Crinkle Cut Chips
Smith’s crinkle cut chips are an extremely well known and recognised product, which has been
branded as “the original and the best” within Australia for over 80 years. They have a number of
competitive advantages over their main competitors, which consist largely of brands such as Thins,
Samboy, and Pringles.
Firstly, Smith’s chips are cooked in sunflower oil, an oil which is naturally less is saturated fat and
contains 75% less saturated fat than other competitors chips which may be cooked in 100%
palmolein oil. This offers consumers a healthy alternative to some of its other competitors within
the market for snack foods.
Further, Smith’s is a very large company and in turn has a substantial amount of resources that
they can allocate and invest into various promotions and advertising, which helps to secure and
develop their brand within a fiercely competitive market. One example of a Smith’s Chips
consumer promotion is the “Do us a Flavour” campaign, where consumers had the chance to enter
a competition to create a new flavour for Smith’s Crinkle Cut Chips. Further, one other successful
consumer promotion was the “Track-A-Pack” campaign, where Smith’s teamed up with Sony
Music to offer consumers an incentive in the form of a free music download with every purchase.
In addition, one example of Smith’s successful advertising is the “48 Hour” campaign. This
promotes the fact that Smith’s chips travel from the farm to the packet in 48 hours.
(Please refer to Appendices 5, 6 and 7)
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Positioning Statement
Smith’s Crinkle Cut Chips are a snack food product that aims to provide a great tasting and value
for money snack through locally provided ingredients and produce, to delight and exceed
customers expectations, Australia wide.
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Consumer Profile
The main market segment that Smith’s Crinkle Cut Chips fall under is the Economical Snackers.
Please see detailed below the personal profile of a potential customer within this specific segment.
This is Tricia Jones. She is 42-years-old and works hard as a full-time legal executive assistant in
Sydney CBD. She earns an annual income of $50,000.00. Tricia lives with her husband and three
children in Hornsby. This is a well-educated, middle socio-economic household. Her children are
all young boys, aged 5, 9 and 13. Tricia spends a large portion of her income on her three children,
mainly on items such as clothes, sporting equipment and groceries. A smaller portion of her
income is put into savings, which is put towards travel to keep-in-touch and visit her family that
lives overseas. Tricia’s interests include spending quality time with her husband and children;
going to parks, playing video games, watching TV and movies as well as playing sports such as
tennis and going bowling together. Tricia and her family mostly eat at home, they only go out for
dinner once or twice a month.
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With three children and a husband, Tricia is a bargain-hunter when it comes to the family
shopping, and specifically in regards to her weekly food and grocery shopping. Tricia and her
family tend to eat a lot of packaged foods – convenience is important in this family! She loves
good value for money and is always looking for discounts and value packets – to get more for her
money.
Smith’s Chips specifically provide value and benefits that meet the specific target market and
needs of Economical Snackers such as Trish Jones. They regularly provide discounts on their
products, as well as have a range of value packs available for purchase.
(Please refer to Appendices 8 and 9).
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Value Proposition
Smith’s Crinkle Cut Chips provide consumers with a number of features and benefits that can be
used to provide an advertising campaign with the aims of increasing brand awareness and loyalty
as well as increasing sales and overall profits.
Some of the outstanding elements of this product include;
- Flavour:
Smith’s Chips are known as the “original and the best” and have been for over 80 years. Further,
the crinkle cut chips comes in a range of different flavours to suit different consumer tastes and
preferences. These include; original, salt and vinegar, chicken, cheese and onion, as well as
barbeque.
- The Use of Local Produce:
Smith’s Chips are cooked with raw products including corn and wheat flour. The products are
sourced locally from within Australia (Smith’s, 2011b, para. 3), which in turn promotes buying
within the community and helps farmers to build the local economy.
- Product Differentiation and Convenience :
Smith’s has partnered with Visy, an Australian cardboard company, and have introduced an
innovation and sustainable alternative to the regular packets for the Smith’s chips range. (Bean
Media, 2012, p4). This alternative not only offers a point of difference compared to other
competitive products in the snack food market, but it also offers consumers value for money,
product protection and convenience - as it is easy to handle with handles to carry and an easy
access window to retrieve products.
(Please refer to appendices 10).
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- Ability for Cross Promotion:
As previously mentioned, Smith’s is a subsidiary of PepsiCo Inc. This allows for the opportunity
for cross promotion, with items from PepsiCo such as Pepsi, the soft drink. This is a form of
marketing promotion with has already occurred in the UK, with one of Smith’s products, Doritos,
and PepsiCo’s product of Pepsi – and is something which can be considered within Australia to
help increase sales of Smith’s Crinkle Cut Chips and overall profit. Further as stated by Indra
Nooyi, the current Chairman and Chief Executive Officer of PepsiCo Inc. “…we benefit from the
opportunity to cross-merchandise and promote our products. But in emerging markets, in
particular, our Snacks business benefits massively from the scale of our Beverage business…”
(Guru Focus, 2012, para. 8).
(Please refer to appendices 11).
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References
Bean Media (2012). Profile: Continuously Competitive. Visy & Smiths – working together to chip away at climate change. Retrieved November 20th from: http://www.beanmedia.com.au/profiles/The%20Smiths%20Snackfood%20Company.pdf
Guru Focus (2012). PepsiCo: Management Stands Behind “Power of One”. Retrieved November 23rd 2012 from: http://www.gurufocus.com/news/161266/pepsico-management-stands-behind-power-of-one
Lamb, W.C. , Hair, J.F. , McDaniel, C. , Summers, J. & Gardiner, M. (2009). MKTG. (1st Asia Pacific Ed). Australia: Cengage Learning Australia Pty Ltd.
Long (2012). MKT100 Individual Assessment Task 2012. Retrieved November 2nd 2012 from http://lms.icms.edu.au/mod/resource/view.php?id=27770
PepsiCo (2012). The Smith’s Snackfood Company – Brands. Retrieved November 3rd 2012, from http://www.pepsico.com.au/brands/Smith’s/
Smith’s (2011). The Smith’s Story. Retrieved November 4th 2012 fromhttp://www.Smith’s.com.au/index.php/Smith’s_history (a.)
Smith’s (2011). Performance With Purpose. Retrieved November 10th from http://www.Smith’s.com.au/index.php/performance_with_purpose (b.)
Waddell D., Jones, G.R. & George, J. (2011). Contemporary Management. (2nd Ed). Australia: McGraw-Hill Australia Pty Ltd.
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Appendices
1 .
1946 Smith’s truck - ‘helping to feed the nation’Source: (Commercial Motor, 2008, para. 1)
Commercial Motor (2008). Albion helps to feed the nation. Retrieved November 3rd 2012 from http://www.commercialmotor.com/big-lorry-blog/albion-helps-to-feed-the-natio
2.
Advertising booklet issued by Smith’s (1935).Source: (Flickr, 2010, para. 1)
Flickr (2010). Holiday Tours of Scotland by Car – advertising booklet issues by Smith’s Potato Crisps, c1935. Retrieved November 4th 2012 from http://www.flickr.com/photos/36844288@N00/4356332954/in/pool-vintage_advertising/
3.
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Smith’s Potato Crisps Advert (1935)Source: (Flickr, 2012, para. 1)
Flickr (2012). Smith’s Potato Crisps – advert, c1935. Retrieved November 4th 2012 from:
http://www.flickr.com/photos/36844288@N00/4355587055/in/pool-vintage_advertising/
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4.
Location of Smith’s and Sakata manufacturing sites and distribution centers within AustraliaSource: (Smith’s, 2012, p4)
The Smith’s Snackfood Company and Sakata Rice Snacks Australia: Australian Packaging Covenant Action Plan. (2011 – 2015). Location of Smith’s and Sakata Operations within Australia.Retrieved November 4th 2012 from http://www.Smith’s.com.au/app/webroot/downloads/ActionPlan.pdf
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5.
Smith’s “Do us a Flavour” CompetitionSource: (Absoluteleigh, 2009, para. 1)
Absoluteleigh (2009). New Smith’s Chips Flavours. Retrieved November 23rd 2012 from http://absoluteleigh.com.au/new-Smith’s-chips-flavours/
6.
Smith’s Customer Promotion – Track-a-PackSource: (Brands Bands Fans, 2012, para. 1)
Brands Bands Fans (2010). Download Bandit. Retrieved November 24th 2012 from http://www.brandsbandsfans.com/archives/1608
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7.
Smith’s “48 hour” Advertising CampaignSource: (POPAI, 2012, para. 1)
POPAI (2012). Smith’s 48 Hour Pre Packed Unit. Retrieved November 23rd 2012 from http://www.popai.com.au/awards/2010/details.aspx?GUID=1eec9969-cddb-49f3-ae46-67a1abac3d1c
8.
Smith’s – Value for Money 6 PacksSource: (Product Revier, 2012, para. 1)
Product Review. (2012). Smith’s Crinkle Cut Potato Multipack Chip Reviews. Retrieved November 22nd 2012 from http://www.productreview.com.au/p/smith-s-crinkle-cut-potato-multipack.html
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9.
Smith’s Chips – Special DiscountsSource: (ibuyforless, 2012, para. 1)
ibuy4less (2012). Smith’s Chips. Retrieved November 24th from http://www.ibuy4less.com.au/publics/productDetails.aspx?id=59421
10.
Smith’s – Example of Product DifferentiationSource: (Woolworths, 2012, para. 1)
Woolworths (2012). Smith’s Chips Multi Packs Crinkle Cut Variety. Retrieved November 24th from: http://www2.woolworthsonline.com.au/Shop/ProductDetails?Stockcode=245856&name=Smith’s-chips-multi-packs-crinkle-cut-variety
11.
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Cross Promotion Example – Doritos and Pepsi Source: (Encounter Magazine, 2012, para. 10)
Encounter Magazine. (2012). How to maximize sales when you’re puckish for profits. Retrieved November 25th 2012 from http://www.encountermagazine.co.uk/uncategorized/maximise-sales-peckish-profits
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