Is dog food an attractive category?
Dog food is an attractive category on the basis of revenue. In 2004 alone, American consumers spent $8.2 billion in sales. From a global perspective, the estimated revenue for dog food has breached the $23 billion dollar mark. The attractiveness of the dog food category is manifested through the intense competitive nature of the various stakeholders. The attractiveness of the dog food category was made evident in the amount of money spent on advertising. In 2004 alone, dog food producers spent more than $190 million for TV commercial and Print Ads. The best assurance that dog food is an attractive theory can be seen in the entry of major players into the said industry. These major players are listed as follows: 1) Mars; 2) Nestle; 3) Procter & Gamble; 4) Colgate; and 5) Del Monte.
How will you segment the product category in three different ways?
Analysts can use the segmentation technique to separate different types of dog food. As a result, the product can be segmented in three different ways. The first way to segment it is to label the category low-priced products. The second segment is the mainstream type of dog food product. In this particular segment, dog food products have better quality with a slightly higher costs. The third and final phase of the segmentation is to label the category of dog food as segment is part of the premium brands. In this particular segmentation some of the more popular premium brands in the industry are listed as follows: 1) Purina Pro Plan; 2) Hill’s Science; 3) Iams; and 4) Beneful.
Who are the influencers when it comes to dog food purchase?
There are three major influencers of brand purchase. The first major source of influence when it comes to the choice of dog food is the female members of the household. It must be made clear that the primary caretakers of pets in the family are the female members of the said family. Data gleaned from studies revealed that at least 75 percent of dog owners are women. The second major influencers are the dog breeders. A significant number of dog owners acquire puppies from their breeders. The breeders are important sources of information with regards to the art and science of taking care of dogs. The third major influencers are the veterinarians. When it comes to external influence the breeders and veterinarians play a major role in deciding the type of dog food to acquire.
How things have changed?
In the beginning, when dogs were still puppies, the dog owner relies heavily on the wisdom and experience of breeders. However, as dog owners advance in years, they tend to spend more time with veterinarians. As a result, veterinarians play a major role when it comes to the type of dog food the family will purchase for the dog.
Is there is a High Level or Low Level Type of Brand Loyalty in the Industry?
It has to be pointed out that when it comes to the dog food industry, there is a high-level of loyalty towards a particular brand. This assertion is supported by the fact that dogs prefer only one type of dog food.
What are the Implications for the Pedigree brand?
Certain dogs prefer a certain type of dog food. Thus, it is harder for pedigree to persuade dog owners to switch to another type of dog food. Greater implications abound, especially if one considers the positioning of Pedigree with regards to other brands. If a certain dog owner believes in dog food high in dietary fiber, then, Pedigree will have a hard time persuading that particular owner to try a dog food that was designed to contain more meat. It will be a challenge because most dogs experience digestive problems when there is a major change in the diet.
How does the Company manages the brand based on financial statements?
Pedigree attempts to increase revenue by focusing on mainstream and premium types of dog food that are readily accessibly by the general public. Pedigree focuses on mainstream market by lowering the profit margin. As a result, a significant number of people purchased dog food that were under the mainstream segment. However, the company figured out a way to increase revenue. In this particular process, Pedigree invested in the development of the company’s premium brand for dog food. The premium segment of the business compels Pedigree to sell high-priced dog food, however, the company was able to make more money because the profit margin is much higher compared to low-price and mainstream products.
What is the current position of the Pedigree brand?
The company positions itself as the producer of quality dog food that utilizes meat as its main ingredient. They also stated that this strategy works because the idea to create this type of product was the end result of recommendations made by breeders. Thus, consumers were persuaded to buy Pedigree products because the “quality meat” content of the dog food was seen as a competitive advantage over others.
What are the issues linked to the positioning of the Pedigree brand?
There are certain issues with regards to positioning adopted by Pedigree. If dog owners perceive that eating too much meat harms their health, then, they believe that the same thing can be said of their dogs. It is therefore prudent to develop alternative products. It is no longer acceptable to develop products without considering the needs of others.
What are the options moving forward?
Pedigree must focus on the premium brands because of the high profit margin. At the same time, the company must focus in the development of products with lower meat content and high in vegetables or dietary fiber.
What are the Pros and Cons with regards to this strategy?
The positive aspect of focusing on premium brands is the chance to increase the profit margins. However, the negative consequence is the tendency to lose market share when it comes to the mainstream products. The positive side of creating healthier products is the chance to increase market share. However, the negative side is the impact of high levels of loyalty when it comes dog food brands. In other words, the company will have a hard time persuading prospective customers to switch to a different type of dog food.
What do you recommend and why?
It is also important that Pedigree considers the power of social media. The company must learn to leverage the power of social media. They must develop various social media channels in order to connect with different type of dog owners. The younger generation are plugged into their mobile devices and mobile phones. Pedigree must develop social media tools that enable the company to interact with customers. It is through the use of social media that the company can have access to immediate feedback. The company can glean valuable insights from the comments made by the customers. The company must also develop strategies so that social media platforms picks up the major attributes of Pedigree products.